Consumers regularly counter act companies. Brands are so valuable that companies fight to protect them. The best examples of monopolies are almost exclusively backed by government regulation.
For the examples you site about companies too big to fail: firstly no company is too big to fail. Secondly, those industries would be more competitive without regulation, subsidies, the SEC, and the FCC.
Finally, it makes your whole comment hold less weight when you single out Rupert Murdoch while commenting on an open forum on the internet. Communication and broadcasting tools have never been more competitive and free.
> Consumers regularly counter act companies. Brands are so valuable that companies fight to protect them.
There are many kinds of businesses that exploit faults in the public and market, yet don't even have any relationship with branding. Companies have better resources and access to more information about the areas they function in than the public does (whether as individuals or groups), and many businesses don't market to the public at all, even if they deal with the public. Debt collection firms, for example, have all of these features.
The public does have a mechanism to counteract the actions of companies, and that's representative government and regulation. It's obviously imperfect, but it is the mechanism the public has.
Because the FCC auctions off portions of the wireless spectrum, and various municipalities control where you can build cell towers, and so a hypothetical telecom startup devoted to the cheaper text message rates must jump through a lot of bureaucratic red tape just to setup the basic infrastructure. Most startups won't bother while there's low-hanging fruit in the unregulated Internet market.
I'm not sure I buy the whole "truly free markets will save us all" argument, but the particular text-messaging argument has a very simple explanation in terms of government monopolies and the cozy relationship between entrenched players and the government.
Again, I'm not certain that free markets are the answer. It may be that telecom is fated to suck, and the regulated alternative sucks less than the complete laissez-faire one. But I am fairly certain that telecom sucks at least in part because of regulation.
What if the consumer dies of a bad pharmaceutical purchased on the free market before getting to change vendors? What if his house wiring (done without codes or regulations) burns him and his home in his sleep before he gets to send out the correction signal to the market?
My point about brands was that this kind of thing is VERY bad for the companies at fault and they work hard to avoid it. Another point about regulation is that is actually doesn't solve much. Not only do people die from drugs both from failures in testing despite regulation, but they also die from NOT taking drugs because of delays in the regulator process.
Most business take pride in what they make. Most people look for that, and look for recommendations from peers. That system is remarkably effective.
Most business take pride in what they make..
And some didn't/don't:
By the 1930s, muckraking journalists, consumer protection organizations, and federal regulators began mounting a campaign for stronger regulatory authority by publicizing a list of injurious products which had been ruled permissible under the 1906 law, including radioactive beverages, cosmetics which caused blindness, and worthless "cures" for diabetes and tuberculosis. The resulting proposed law was unable to get through the Congress of the United States for five years, but was rapidly enacted into law following the public outcry over the 1937 Elixir Sulfanilamide tragedy, in which over 100 people died after using a drug formulated with a toxic, untested solvent. The only way that the FDA could even seize the product was due to a misbranding problem: an "Elixir" was defined as a medication dissolved in ethanol, not the diethylene glycol used in the Elixir Sulfanilamide.
Medicine and media today are very different. Also, stories like this get lots of attention. They skew perception about instances of events like this. Regulation's side effect is often inaction or inactivity. You don't really hear much about that.
Many real elixirs are killing people right now, by not getting on the market fast enough to save lives because of the lengthy FDA approval process. You don't hear about that.
I would not argue the effectiveness of that system, but can you honestly say we should not regulate who can fly an airplane or drive a car, practice heart surgery or design bridges and buildings? Do you think an unfettered market with no regulation of these things is a good idea?
After a bit of thought, most calls for regulation are unfounded.
I would start by emphasizing that things that can kill lots of people should be regulated. Cars and planes and buildings fall in that category. But how?
An airline should be forced to get insurance for the risk of bad pilots. That might be enough to align incentives and protect people from risk. It is a slightly irrelevant issue as laws will be passed within our lifetimes that mandate a human must _not_ fly a commercial airplane. Only robots.
Driving is similar, but much easier, so more people can do it. It's harder from a robotics front, but will also be solved soon. I've worked on robot cars.
Heart surgery is where it gets interesting. By mandating a certain level of quality, you essentially place a price floor above the market price on medical care. That means a lot of people don't get it. Would you rather have a shoddy operation or none at all? As desperate times often demonstrate (e.g. delivering a baby outside a hospital by necessity), people want shoddy care over none at all.
So licensing doctors is bad. Private accreditation is enough. I will trust a doctor that has received a credential or accreditation from an institution I trust. I certainly trust Harvard more than I trust the AMA or HHS.
You should read Capitalism and Freedom by the way. Milton Friedman is an excellent author. He makes this issue crystal clear.
The free market would eventually fix all these problems, albeit after a period of suffering and very likely, many deaths. Industry standards and associations would crop up after a string of failures, and consumers would eventually move towards firms that are endorsed by the industry standard bodies. eg. chartered accountants.
Regulations are just there to try and avoid the transition period of pain (and death).
Industry standards and associations would crop up after a string of failures, and consumers would eventually move towards firms that are endorsed by the industry standard bodies. eg. chartered accountants
For the examples you site about companies too big to fail: firstly no company is too big to fail. Secondly, those industries would be more competitive without regulation, subsidies, the SEC, and the FCC.
Finally, it makes your whole comment hold less weight when you single out Rupert Murdoch while commenting on an open forum on the internet. Communication and broadcasting tools have never been more competitive and free.