capitalism
Out of context: Reply #25
- Started
- Last post
- 1,312 Responses
- raf0
People tend to think that capitalism leads to monopolies and those need to be dealt with with antitrust laws.
Monopolies are like empires. They cannot last. They either crumble under their own gravity or get swept off their position by new players. For every Goliath there comes a David.This is particularly visible in IT related businesses, new companies emerge from an idea and turn markets upside down.
Look ad Adobe and how Dreamweaver is getting dethroned by likes of Coda and Espresso. It's only a matter of time that new Photoshop will come out of someone's garage.Just look at how Microsoft's IE struggles with open source browsers like Firefox or Webkit.
What happened with monopolies in the old days, before antitrust institutions?
From http://en.wikipedia.org/wiki/U.S…
"J. P. Morgan and Elbert H. Gary founded U.S. Steel in 1901 (incorporated on February 25) by combining the steel operations owned by Andrew Carnegie with Gary's Federal Steel Company and several smaller companies for $492 million. It was capitalized at $1.4 billion, making it the world's first billion-dollar corporation. At one time, U.S. Steel was the largest steel producer and largest corporation in the world. In 1907 it bought one of its largest competitors Tennessee Coal, Iron and Railroad Company which was headquartered in Birmingham, Alabama. This led to the company being listed on the Dow Jones Industrial Average, doing so by taking the place of Tennessee Coal, Iron and Railroad Company. The federal government attempted to use federal antitrust laws to break up U.S. Steel in 1911, but that effort ultimately failed. Time and competitors have, however, accomplished nearly the same thing. In its first full year of operation, U. S. Steel made 67 percent of all the steel produced in the United States. It now produces less than 10 percent.The Corporation, as it was known on Wall Street, always distinguished itself to investors by virtue of its size, rather than for its efficiency or creativeness during its heyday. In 1901, it controlled two-thirds of steel production. Because of heavy debts taken on at the company's formation — Carnegie insisted on being paid in gold bonds for his stake — and fears of antitrust litigation, U. S. Steel moved cautiously. Competitors often innovated faster, especially Bethlehem Steel, run by U. S. Steel's former first president, Charles M. Schwab. U. S. Steel's share of the expanding market slipped to 50 percent by 1911."
Time, competition, innovation – these factors are enough to erode monopolies on a free market.
- Said by a guy who lives in a world with a 40 hour work week. Very brave.TheBlueOne