The U.S. Only Pretends to Have Free Markets

https://www.theatlantic.com/ideas/archive/2019/10/europe-not-america-home-free-market/600859/

by alistairSH • 7 years ago

78 8 7 years ago

An unfavorable review: https://marginalrevolution.com/marginalrevolution/2019/07/th...

As usual I didn't buy the book, but previewing it on Amazon it seems long on pontificating and short on references. There are a few numbers but the analysis goes like "Look at these numbers. Something is terribly wrong. It must be market failure!".

I subscribe more to the failed government theory, there is just nobody in any of these fields who cares about economic efficiency as they are too busy fighting to get campaign funding.

carlsborg• 7 years ago

That review mentions output restriction 15 times in total, the implied argument being that monopolies and cartels restrict output at some point of the demand curve and there is no output restriction these are not real monopolies.

Imho this is not a useful argument without also offering the marginal cost curve for that industry. Ie maybe for airlines technology driven efficiencies allows marginal revenue to exceed marginal cost at scale? From elsewhere “A monopolist can determine its profit-maximizing price and quantity by analyzing the marginal revenue and marginal costs of producing an extra unit. If the marginal revenue exceeds the marginal cost, then the firm should produce the extra unit.”

ZeroGravitas• 7 years ago

That's a strangely mixed review, and the same probably applies to your comment.

He seems to agree that regulations are preventing competition and should be removed, yet simultaneously argues that there's no evidence of companies output being affected and so we shouldn't have stronger anti-trust action.

It seems paradoxical to hold both these opinions at once.

Particularly if corporations are paying politicians to enact (or at least not repeal) those laws.

How can foreign airlines entering the market improve matters if the domestic airlines are already being directed by the invisible hand of the market to deliver the best service possible?

supercanuck• 7 years ago

I didn't buy, read, or put forth any effort whatsoever, but let me pontificate on why you're wrong.

-Everybody on the internet

mikhailfranco• 7 years ago

More support from a special report in The Economist:

https://www.economist.com/special-report/2018/11/15/across-t...

https://www.economist.com/graphic-detail/2018/11/20/competit...

https://www.economist.com/leaders/2018/07/26/like-america-br...

https://www.economist.com/graphic-detail/2016/03/24/corporat...

gyuserbti• 7 years ago

This extends everywhere, including licensing laws and so forth.

danzig13• 7 years ago

In some industries, licensing rules directly exclude new competitors; in other cases, regulations are complex enough that only the largest companies can afford to comply.

Not really a regulation but sales tax is a nightmare. We really need a consistent federal standard.

Ancalagon• 7 years ago

I still find the licensing requirement for hair-cutters to be absurd and hilarious. You need a license and very expensive schooling to _cut hair_.

The U.S. Only Pretends to Have Free Markets

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