Subject:
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Re: Libertarianism again.
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Sat, 4 Sep 1999 08:33:46 GMT
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Viewed:
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1870 times
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Larry Pieniazek <lar@voyager.net> wrote
> Simon, don't argue from authority. • ..
> Heck, just about everything in the classic Samuelson text has been
> shown to be untrue, along with the rest of Keysnian economics.
Larry, heed thyself. Or is simple contradiction permitted?
> But if you insist, name a natural monopoly and the barriers to entry and
> I'll show why it's not really natural, but a government imposed,
> monopoly instead. Or better yet, I'll lead YOU through the process and
> you can discover the hand of government for yourself.
The telephone system, specifically the local loop. For the purposes of
argument it will be easier if we restrict this to pre-1980 so as to
exclude the various wireless and voice-over-IP options that make it a
less tenable monopoly right now.
Now, from a pure perspective the government is not required, correct?
So "the company" simply has to negotiate with the various landowners
involved to gain the right to place cables, then wire each phone into
a local exchange, which connects to the companies larger system. To
make this a saleable product it is necessary to connect in some way
to a substantial number of other telephones, both those belonging to
"the company", and any others that may exist.
The cost of this (financial and chronologial) is such that a new player
in the market will need to be very rich, as well as popular. To prevent
this new player "the company" can trivially write contracts with any
or all of its clients which forbid them to grant access for cabling
to its competition. As the player with existing customers there will
need to be interconnection arrangements, and the new player will be
at a substantial disadvantage in those negotiations. In practice it
seems to be about a 5:1 disadvantage, if the relative fees are any
guide. Indeed, until after the new player has a substantial number
of customers the only sensible course for the company is to refuse
to interconnect at all.
Can you explain how this situation does not lead to a monopoly?
> not pushing anything. Merely answering questions and deflating
> misconceptions. I could care less what anyone else does or thinks as
> long as they leave me alone.
Larry, I suspect you of misstating the situation. You seem to believe
that anyone who disagrees with you is misinformed or has missthought.
Combining that with your apparent need to correct those so afflicted
does not sit well with your professed lack of care.
Moz
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Message is in Reply To:
 | | Re: Libertarianism again.
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| <FHDLGC.AAv@lugnet.com> <37CD2061.1A04C593@voyager.net> <FHDzL4.2L5@lugnet.com> Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit (...) of SOME economic theories. Just not the ones that actually work. Keynsian economics is (...) (25 years ago, 1-Sep-99, to lugnet.off-topic.debate)
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