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With Obamacare and the rest of the torrential regulations, I worry about the state of competition within the US. One trip to China will show that it is competition (not democracy) which brings prosperity.
If they are so uneconomic, why did various monopolies/cartels/etc grow so spectacularly ~1840+ that they were banned? One might argue government protection, but that did not apply to domestic steel.
The analyses I read assume linear, proportional production and ignore start-up/fixed costs and network effects (Metcalfe). The constantly rising unit cost curves shown by Economics professors apply to very few (any?) goods — average cost falls with increased production until capacity is reached. Even then a 10% shift differential will only add 4% to _marginal_ costs.
(For Tom: depending on how you define it, predatory pricing is actually common — how else do you think companies get in the red? Groceries are a very narrow margin business. MegaMart’s profits would increase rapidly — 300 k$ per store is _easy_. Rather than the (currently illegal) minimum price agreement, Merck would more likely just want a cut of WalMart’s increased margins. Easily negotiated. The DeBeers analysis neglects the other[Canadian] producers.)
Is the Austrian view no-pro-competition law save correcting past protection? (Today’s Internet likely would not exist without the 1982 AT&T breakup.) To the extent that cartel agreements should be enforced in court? What about patents, copyright and bankruptcy — aren’t these also government interferences in the market?