For 200 years, there have been two schools of thought about what determines the distribution of income – and how the economy functions.
One, emanating from Adam Smith and nineteenth-century liberal economists, focuses on competitive markets. The other, cognizant of how Smith’s brand of liberalism leads to rapid concentration of wealth and income, takes as its starting point unfettered markets’ tendency toward monopoly. It is important to understand both, because our views about government policies and existing inequalities are shaped by which of the two schools of thought one believes provides a better description of reality.
For the nineteenth-century liberals and their latter-day acolytes, because markets are competitive, individuals’ returns are related to their social contributions – their “marginal product,” in the language of economists.
Capitalists are rewarded for saving rather than consuming – for their abstinence, in the words of Nassau Senior, one of my predecessors in the Drummond Professorship of Political Economy at Oxford. Differences in income were then related to their ownership of “assets” – human and financial capital. Scholars of inequality thus focused on the determinants of the distribution of assets, including how they are passed on across generations.
The second school of thought takes as its starting point “power,” including the ability to exercise monopoly control or, in labor markets, to assert authority over workers. Scholars in this area have focused on what gives rise to power, how it is maintained and strengthened, and other features that may prevent markets from being competitive. Work on exploitation arising from asymmetries of information is an important example.
In the West in the post-World War II era, the liberal school of thought has dominated. Yet, as inequality has widened and concerns about it have grown, the competitive school, viewing individual returns in terms of marginal product, has become increasingly unable to explain how the economy works. So, today, the second school of thought is ascendant.
Link to Project Syndicat: Monopoly's New Era
Excerpt:
Economists saw the trend coming long ago. In the pursuit of profits, which was quite normal, companies embarked upon what was at first called Conglomeration. Meaning a company would think beyond the confines of its own single market and branch out into others. Like General Electric that went from generating electricity from steam powered generators to jet-engines.
Just like General Electric, at one time, they went even further. They looked at profit-potential, and if it was good, they tried to buy the company. That trend was heady for a few decades in America, until corporate chieftains began to understand that managing so many companies was a real pain. Like a fire-storm, the trend blazed and inevitably slowed and finally died out.
Only to be replaced by Market Integration. Which is very much the same theory, except that it takes very competitive markets and reduces the competition by Agglomeration. Larger companies buy out their smaller competition, then they take-over even their major competitors.
The market is not a Monopoly, but very certainly an Oligopoly. That is, a market with a limited number of major players and very high entry-costs.
Which inevitably produces "sticky-pricing" and, in effect, no real competition amongst the three, four or five that dominate the market - each with a weary-eye for the dominant company who actually "sets prices". Of course, who pays for those oligopolistic profits?
You and me, and all the other consumers ...
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Link to Project Syndicat: Monopoly's New Era
Excerpt:
Economists saw the trend coming long ago. In the pursuit of profits, which was quite normal, companies embarked upon what was at first called Conglomeration. Meaning a company would think beyond the confines of its own single market and branch out into others. Like General Electric that went from generating electricity from steam powered generators to jet-engines.
Just like General Electric, at one time, they went even further. They looked at profit-potential, and if it was good, they tried to buy the company. That trend was heady for a few decades in America, until corporate chieftains began to understand that managing so many companies was a real pain. Like a fire-storm, the trend blazed and inevitably slowed and finally died out.
Only to be replaced by Market Integration. Which is very much the same theory, except that it takes very competitive markets and reduces the competition by Agglomeration. Larger companies buy out their smaller competition, then they take-over even their major competitors.
The market is not a Monopoly, but very certainly an Oligopoly. That is, a market with a limited number of major players and very high entry-costs.
Which inevitably produces "sticky-pricing" and, in effect, no real competition amongst the three, four or five that dominate the market - each with a weary-eye for the dominant company who actually "sets prices". Of course, who pays for those oligopolistic profits?
You and me, and all the other consumers ...
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As to the numbers in the underlying study, they only look at the concentration in North America, if I saw it correctly. In my sector the US companies are not overly large in comparison to the foreign ones, though, they are more profitable. Were the concentration in the US is large is in "new technologies", where companies like Microsoft etc came from nowhere to fill a new demand. But that has nothing whatever to do with the conventional process of capital accumulation but a lot to do with disruptive technologies, the success of invention and dynamic markets.
*Automotive parts suppliers have consolidated from 30,000 in 1988 to 8000 in 1999 and are projected to consolidate further to 2000 by 2008. The biggest automotive-component suppliers are likely to expand at rates of 20 percent to 30 percent a year over the next five years, largely reflecting acquisitions.
*All five of the top commercial real estate services firms that provide facility management services have been through a level of consolidation.
*Other heavy consolidation industries:
Let us look at this: "Specifically, Microsoft sought to disadvantage the growth of non-Microsoft Internet browsers that developers could have used to compete with the Microsoft operating system monopoly." Did it succeed? So all it means is that we must continue to be watchful and insist that laws are well made and crime is punished.
This portrays the two as almost mutually exclusive; they are not. I am of Smith's viewpoint that competition is good and great, but recognize capitalism's tendency towards consolidation and therefore loss of competition. Unfettered markets are the tool of their own transition from positive contribution to negative.For 200 years, there have been two schools of thought about what determines the distribution of income – and how the economy functions.
One, emanating from Adam Smith and nineteenth-century liberal economists, focuses on competitive markets. The other, cognizant of how Smith’s brand of liberalism leads to rapid concentration of wealth and income, takes as its starting point unfettered markets’ tendency toward monopoly.
Google and Microsoft are examples of Market Dominance in HiTech. Both got very rich from price-gouging, or, if you like, perfectly legal price-fixing. For which the European authorities have just indicted Google. We'll see what happens in Europe, if Uncle Sam is too much of a market-overseer milquetoast to do his duty in the US. (And I cannot imagine why Bing is not doing better; it's a damn fine search-mechanism.)
However, in fact I was thinking of some more traditional markets that are heavily consolidated, more humdrum: US HealthCare, Banking, and Insurance. Some others with the same trends (from here, excerpted):
Aside from stock-market valuations, is the American public better off from too much consolidation ... ?
Blathering again?
Microsoft succeeded because Gary Kildall, the inventor of CP/M, died in a stupid car-crash. Kildall and Gates knew one another well, because they were initially the only two "open system" purveyors of PC Operating Systems. Apple was a closed-system machine.
Both MS-DOS and CP/M were equivalent in most respects, but with the death of Kildall, CP/M did not make the conversion to a more complete operating system for a multi-tasking PC - as IBM conceived its PC. In fact, it was Gates who showed them how to conceive a PC because IBM engineers at the time hadn't the faintest idea. Gates eventually dumped developing operating-systems for IBM when Microsoft did not need them anymore - PC production was growing under multiple different makers.
It wa s a real shame, because at the beginning both operating-systems were roughly equivalent, and had CP/M continued its development it could have been at least as successful as Apple.
Fate can be a vicious mistress ...
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Another thread on this in the same sub-forum?
That the Europeans dislike companies of that type is quite clear. France tried desperately for a while to produce a Google and failure is always unpleasant. Whether the bitter taste is a good consultant for national policies, is another matter.
When most people think internet browser, they do not think Microsoft. So don't go off topic.
Once again, you are showing your ignorance as regards Europe and Europeans.
America has a clear advantage because it is a single language. .....
But even in the traditional markets like telecommunications or radio/tv you will find that the number of competitors is quite large.
That is another thing that is quite cute. You always have an excuse on your lips.
As of April, this was browser usage:
2016
Chrome: 70.4 %
Firefox: 17.5 %
IE: 5.8 %
Safari: 3.7 %
Opera: 1.3 %
Search-engine usage:
Google: 88.7%
Bing: 4.8%
Yahoo: 3.3%
Baidu: 0.73%
PS: If you are using Google inside side of Chrome, know that your Internet behaviour is NOT an unknown. Perhaps not your identity, because anyone investigating will get that from your Web-supplier - and that should not be too difficult either ...
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And to get back to the link, which of those is by Microsoft that used its monopoly power to grab the browser market?
United States v. Microsoft Corporation 253 F.3d 34 (D.C. Cir. 2001) is a U.S. antitrust law case, ultimately settled by the Department of Justice, where Microsoft Corporation was accused of becoming a monopoly and engaging in abusive practices contrary to the 1890 Sherman Antitrust Act sections 1 and 2. It was initiated on May 18, 1998 by the United States Department of Justice (DOJ) and 20 states.
The plaintiffs alleged that Microsoft abused monopoly power on Intel-based personal computers in its handling of operating system and web browser sales. The issue central to the case was whether Microsoft was allowed to bundle its flagship Internet Explorer (IE) web browser software with its Microsoft Windows operating system. Bundling them together is alleged to have been responsible for Microsoft's victory in the browser wars as every Windows user had a copy of Internet Explorer. It was further alleged that this restricted the market for competing web browsers (such as Netscape Navigator or Opera) that were slow to download over a modem or had to be purchased at a store. Underlying these disputes were questions over whether Microsoft altered or manipulated its application programming interfaces (APIs) to favor Internet Explorer over third party web browsers, Microsoft's conduct in forming restrictive licensing agreements with original equipment manufacturers (OEMs), and Microsoft's intent in its course of conduct.
________________________Bill Gates was called "evasive and nonresponsive" by a source present at a session in which Gates was questioned on his deposition. He argued over the definitions of words such as "compete", "concerned", "ask", and "we". Businessweek reported that "early rounds of his deposition show him offering obfuscatory answers and saying 'I don't recall' so many times that even the presiding judge had to chuckle. Many of the technology chief's denials and pleas of ignorance have been directly refuted by prosecutors with snippets of email Gates both sent and received."
Pretty sure microsoft never made money with IE specifically.Microsoft is "IE"! Microsoft employed its monopoly in PCs to dominate the Browser Wars initially.
I am of Smith's viewpoint that competition is good and great, but recognize capitalism's tendency towards consolidation and therefore loss of competition. Unfettered markets are the tool of their own transition from positive contribution to negative. .
Pretty sure microsoft never made money with IE specifically.
Pretty sure microsoft never made money with IE specifically.
If you need something to reach for, the monopoly leverage that microsoft has with professional and educational institutions would be more effectual. No one else can deploy on scale the technology a generation of users grew up on.
Last I read Apple has 47% of the education market, Microsoft has 28% and Google has 25%.
Futuresource claims that Chromebooks accounted for more than 50 percent of U.S. sales for education devices in the third quarter, a jump that comes at the expense of iOS devices (i.e., iPads) and, to a lesser degree, Windows PCs. That's up from 40 percent at the same point last year, and less than one percent back in 2012.
Among the 34 OECD countries, the United States performed below average in mathematics in 2012 and is ranked 27th (this is the best estimate, although the rank could be between 23 and 29 due to sampling and measurement error). Performance in reading and science are both close to the OECD average. The United States ranks 17 in reading, (range of ranks: 14 to 20) and 20 in science (range of ranks: 17 to 25). There has been no significant change in these performances over time.
He is like the Fed Governors...tons of degrees, theories and intelligence and almost totally clueless as to how the world actually works.
MY POINT?
Just one-third of the DoD budget reallocated to the Dept. of Education to improve the system nationwide would go a long, long way because the states cannot do it themselves (apparently).
Of course, perhaps you think preparing your kids for the future is not a national priority? Then, uh, sorry to bother you with such a mundane matter ...
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