Economics Discussion Thread

[Taihei Tengoku]

Most economic collusion is vertical (within the firm against others) rather than horizontal (between different firms against part of their own). This is what caused the rot of the US automobile industry in the middle 20th century.

[Orostan]

Strong anti trust laws don't matter unless they're enforced. The USA supposedly has anti trust laws yet allows near monopolies in many industries. Class collaboration is also impossible, the worker and the Capitalist have different opposing interests. It will always be the Capitalist Class that take a power in any sort of "class collaborationist" society. You will not be changing the way capitalism operates with your "reforms".

Ah the old commie talking points "class collaboration will never work" (well Class struggle almost always ends with the murder of the capitalist)

That's a purely materialist way of looking at things that only applies to people whose motivations are purely materialist. Even today there are trade associations in which the worker and the capitalist both work together for their shared interest in the advancement of the industry and the success of the business.

The Capitalist's goal is to pay the worker as little as he can (at the cost of production of the worker's labor), and to spend the least possible amount on employee benefits, which reduces his cost of production and also can allow him to maximize profits. The worker wants to be paid fairly for his work, and does not care about the Capitalist's profit margins most of the time. It is in the worker's rational class interest to unionize and demand more of his surplus value, while it is in the Capitalist's interest to destroy this union by almost any means necessary. Class Struggle will exist as long as there are classes with differing interests in society.

Class Struggle will 'end' with the destruction of one class. As the Capitalist class needs the Working Class, the Proletariat, to work the means of production the capitalists own the Capitalist class cannot eliminate the Working Class. The Working Class does not need the Capitalist class, and therefore the working class can eliminate the Capitalist class while the Capitalist class can only suppress the working class.

With regards to your second point, if we have a business where the Capitalist and the workers work to grow and expand the business, the workers will not see any benefit of this other than their continued employment. While rapid expansion of businesses may mean a shortened supply of labor and a higher demand for labor, therefore bringing higher wages, here the reserve army of labor shows itself. Because at a certain point labor will become so expensive as to eclipse the price of mechanization, the Capitalist will buy a machine at that point which may render 10 or 20 men unemployed by making it possible for one man to do the same amount of labor in the same time as those 10 or 20 other men. The Capitalist benefits vastly more than the worker from this arrangement.

So in summary, I believe that your view of Capitalism is idealistic and can never exist in reality.

[Orostan]

Most economic collusion is vertical (within the firm against others) rather than horizontal (between different firms against part of their own). This is what caused the rot of the US automobile industry in the middle 20th century.

How do you explain telecom companies colluding to form monopolies over certain areas? How do you explain wage fixing by multiple corporations at the same time?

[Taihei Tengoku]

Most economic collusion is vertical (within the firm against others) rather than horizontal (between different firms against part of their own). This is what caused the rot of the US automobile industry in the middle 20th century.

How do you explain telecom companies colluding to form monopolies over certain areas? How do you explain wage fixing by multiple corporations at the same time?

The word "most." Listing exceptions doesn't make them not exceptions. Telecom used to be an actual monopoly backed by the state, no less, and an example of vertical collusion-AT&T against all other telecoms rather than all telecoms against their workers.

[Orostan]

How do you explain telecom companies colluding to form monopolies over certain areas? How do you explain wage fixing by multiple corporations at the same time?

The word "most." Listing exceptions doesn't make them not exceptions. Telecom used to be an actual monopoly backed by the state, no less, and an example of vertical collusion-AT&T against all other telecoms rather than all telecoms against their workers.

Here's an example of multiple companies colluding against their workers:
http://variety.com/2017/biz/news/disney ... 201975084/

Telecom monopolies are often allowed to exist by the state. The state could break up telecom companies into smaller companies but they choose not to because of the telecom lobby. For example, Bill Clinton passed the Telecom act which allowed the centralization of 90% of American Media into 6 companies. It's not the state that backs monopolies, it's the monopolies which back the state often times. In fact, here's another list of companies colluding with each other rather than competing:

https://en.wikipedia.org/wiki/Collusion#Examples

[Taihei Tengoku]

Listing exceptions doesn't make them not exceptions.

[Northern Davincia]

Whatever you say, fam. Capitalism dindu nothin' wrong.

That is true.

[Orostan]

Listing exceptions doesn't make them not exceptions.

It's not exceptions to a rule. It is the rule. Business take the path of most profitability and I'm trying to tell you that it's more profitable often times for a business to collude than to compete with other business.

[Taihei Tengoku]

It's not exceptions to a rule. It is the rule. Business take the path of most profitability and I'm trying to tell you that it's more profitable often times for a business to collude than to compete with other business.

To prove that it is the rule you have to prove that instances of horizontal collusion are more frequent than instances of vertical collusion. Vertical collusion occurs all the time because businesses are both competitive and do not want to feel the effects of competition. Horizontal collusion is, on the other hand, rare and frequently prosecuted while vertical collusion is praised up and down as "protecting our workers" or "preserving domestic industry."

[Orostan]

It's not exceptions to a rule. It is the rule. Business take the path of most profitability and I'm trying to tell you that it's more profitable often times for a business to collude than to compete with other business.

To prove that it is the rule you have to prove that instances of horizontal collusion are more frequent than instances of vertical collusion. Vertical collusion occurs all the time because businesses are both competitive and do not want to feel the effects of competition. Horizontal collusion is, on the other hand, rare and frequently prosecuted while vertical collusion is praised up and down as "protecting our workers" or "preserving domestic industry."

Read my post again. I never said businesses collude with each other more, I said that they take the path of most profitability. And if we assume a free market than it is more profitable for businesses to collude with each other, splitting the market in the case of telecom companies, at least 50% of the time.

[Taihei Tengoku]

And if we assume a free market than it is more profitable for businesses to collude with each other, splitting the market in the case of telecom companies, at least 50% of the time.

? If horizontal collusion was the rule than most firms would be part of a cartel. Most firms are not, therefore,

[Orostan]

And if we assume a free market than it is more profitable for businesses to collude with each other, splitting the market in the case of telecom companies, at least 50% of the time.

? If horizontal collusion was the rule than most firms would be part of a cartel. Most firms are not, therefore,

I NEVER SAID HORIZONTAL COLLUSION WAS THE RULE! I said that the rule was that business take the path of most profitability!

[Taihei Tengoku]

? If horizontal collusion was the rule than most firms would be part of a cartel. Most firms are not, therefore,

I NEVER SAID HORIZONTAL COLLUSION WAS THE RULE! I said that the rule was that business take the path of most profitability!

It's not exceptions to a rule. It is the rule.

[Taihei Tengoku]

Saying "firms take the most profitable actions as a rule" and "horizontal collusion is the most profitable" is saying "horizontal collusion is the rule."

[Orostan]

I NEVER SAID HORIZONTAL COLLUSION WAS THE RULE! I said that the rule was that business take the path of most profitability!

It's not exceptions to a rule. It is the rule.

It's not exceptions to a rule. It is the rule. Business take the path of most profitability and I'm trying to tell you that it's more profitable often times for a business to collude than to compete with other business.

[Orostan]

Saying "firms take the most profitable actions as a rule" and "horizontal collusion is the most profitable" is saying "horizontal collusion is the rule."

I said that "often times" Horizontal collusion happens because it is most profitable at the time.

[Taihei Tengoku]

Saying "firms take the most profitable actions as a rule" and "horizontal collusion is the most profitable" is saying "horizontal collusion is the rule."

I said that "often times" Horizontal collusion happens because it is most profitable at the time.

So you're saying nothing at all.

[Orostan]

I said that "often times" Horizontal collusion happens because it is most profitable at the time.

So you're saying nothing at all.

No, I'm saying that when you said;

Listing exceptions doesn't make them not exceptions.

you were incorrect, because the rule is that businesses take the most profitable path.

[Taihei Tengoku]

Most economic collusion is vertical (within the firm against others) rather than horizontal (between different firms against part of their own).

Just saying horizontal collusion happens "often" means nothing, as vertical collusion happens "oftener."

[Orostan]

Most economic collusion is vertical (within the firm against others) rather than horizontal (between different firms against part of their own).

Just saying horizontal collusion happens "often" means nothing, as vertical collusion happens "oftener."

Prove it. And even so, you stated that vertical collusion was the "rule", which it's not.

[Taihei Tengoku]

Just saying horizontal collusion happens "often" means nothing, as vertical collusion happens "oftener."

Prove it. And even so, you stated that vertical collusion was the "rule", which it's not.

IP laws are vertical collusion
Every trade barrier is vertical collusion
Monopoly privilege is vertical collusion

These outnumber the relatively few instances of price fixing, of which only a subset is wage suppression.

[Orostan]

Prove it. And even so, you stated that vertical collusion was the "rule", which it's not.

IP laws are vertical collusion
Every trade barrier is vertical collusion
Monopoly privilege is vertical collusion

These outnumber the relatively few instances of price fixing, of which only a subset is wage suppression.

You said that vertical collusion is a rule and horizontal collusion is the exception to that rule.

That's incorrect. Do we both agree that the rule is that business will take the path of most profitability, be that vertical or horizontal collusion?

[Taihei Tengoku]

IP laws are vertical collusion
Every trade barrier is vertical collusion
Monopoly privilege is vertical collusion

These outnumber the relatively few instances of price fixing, of which only a subset is wage suppression.

You said that vertical collusion is a rule and horizontal collusion is the exception to that rule.

That's incorrect. Do we both agree that the rule is that business will take the path of most profitability, be that vertical or horizontal collusion?

Do you think I am going to meet your incorrect ideas in a half-wrong middle?

[Orostan]

You said that vertical collusion is a rule and horizontal collusion is the exception to that rule.

That's incorrect. Do we both agree that the rule is that business will take the path of most profitability, be that vertical or horizontal collusion?

Do you think I am going to meet your incorrect ideas in a half-wrong middle?

No, I think that you should admit that when given the choice between collusion with other businesses or competition, a business will choose the most profitable option.

[Taihei Tengoku]

Do you think I am going to meet your incorrect ideas in a half-wrong middle?

No, I think that you should admit that when given the choice between collusion with other businesses or competition, a business will choose the most profitable option.

Which is competition. Vertical collusion is more common than horizontal collusion because it is hard (costly) to coordinate.