Lifeboat Earth

[ussusimiel]

The only reason regulation of capitalism allows wealth to accumulate into the hands of only a few is because...

Not regulating capitalism also allows wealth to accumulate into the hands of the few. Somebody does a good job at something; puts profits into doing it even better; buys out the competition, forming a monopoly, which, without regulation, is entirely permissible; etc.

Agreed, Fist. I understand how crony capitalism funnels money into the hands of certain influential people, but I am unclear as to how less regulation would prevent the cycle you outline above. We have seen how Western companies will move production to other jurisdictions without bringing the ethical practices required in the West with them. Why would they behave any differently in the West if there were no regulations?*

u.

*I've probably mentioned this before, but I worked as groundstaff for a low-cost airline in Ireland for a while. The company would not allow groundstaff be members of a union. Their disregard for the health and safety of their staff was the worst I have ever seen. They made a calculated decision that it was cheaper to fight injury claims and settle rather than provide for the health of their staff. They had a constant stream of staff as low-cost labour in the form of immigrants was readily available. (BTW, these were minimum wage jobs.)

Ireland is a country with a history of strong unions and has plenty of health and safety regulations. However, government enforcement is mainly limited to sectors where there is a high fatality rate e.g. construction. It is actually quite difficult to get killed working at an airport, which means that this company could easily flout standards. It is clear that in this case given a choice between workers health and profits. the company chose profits. Am I wrong to think that this is what would be likely in most situations under capitalism?

[peter]

Gosh - I'm picking up some interesting stuff from Stone [even if it does require taking with a pinch of salt. He is incredulous that America is the only major western democracy that does not regard universal health care as a right rather than as a privelege. He observes that few are aware of how close the USA came to having such a system back in the 1930's when, were it not for the protestations of the American Medical Association [the medical professions governing body] such a system would have been introduced to almost universal approval. Such protestations from the british equivalent [the BMA] were overcome thankfully to the universal bennefit of all; when Bevan was asked how he had formed the NHS even in the face of strong opposition from the consultants his reply was "I stuffed their mouths with gold." [We have been doing the same ever since.]

[SerScot]

Uss,

Crony capitalism is using regulation and government authority to benefit the people in power. If government doesn't have the power to skew the market to benefit those in control how do businesses weather event that cause businesses that are "too big to fail" to fold without the ability to look to government to save them? The failure of these large businesses then frees up capital for other small entrepenures. The cycle continues, rinse and repeat.

[ussusimiel]

Crony capitalism is using regulation and government authority to benefit the people in power. If government doesn't have the power to skew the market to benefit those in control how do businesses weather event that cause businesses that are "too big to fail" to fold without the ability to look to government to save them? The failure of these large businesses then frees up capital for other small entrepenures. The cycle continues, rinse and repeat.

I agree completely about the flaws of crony capitalism, SerScot. As strongly as anyone here I would like, just for once, a politician to arise who understood the meaning of the phrase 'public service'. Alas, it's not going to happen anytime soon

However, much and all as I despise the venality of politicians, there is always a chance that next time, as an electorate, we might get some sense and vote for someone with a whiff of integrity. My fear always is that without regulation we have no such control over business. I do not have the faith in the 'market' that others have. And I think Fist's point about monopolies is well made. Simply put, what happens when a corporation gains such a dominant position in the market that it is effectively a monopoly?

The fear for people like me is that unregulated business will lead to a situation of oligarchy or plutocracy. (One of the strongest criticisms of liberal capitalism is that it risks reconstituting a class-based system.) Like other 'liberals', I see it as essential that a robust case is put for alternatives to neoliberalism. Again, like many others, I find the idea that there is only one possible option available to us disturbing and disconcertingly ideological.

u.

[SerScot]

Uss,

Would AT&T's monopoly have survived the advent of cellular phones?

[ussusimiel]

Would AT&T's monopoly have survived the advent of cellular phones?

I don't know the details of that situation. Certainly a company like Nokia didn't survive the advent of the smartphone. What about a company like Microsoft? How do you think it would have developed without anti-trust laws?

u.

[wayfriend]

If AT&T had a monopoly on phones, it would end up with a monopoly on wireless phones.

Technologically, no one would want the first wireless phone unless they could call a land-line phone. So AT&T would hold all the cards. If it considered wireless to be good, it would eventually acquire wireless technology and build it's own wireless network. No one else would be able to.

Consider how the big oil companies have worked to control the new energies. They use crony capitalism to ensure that they have the advantages, and argue that only big oil has the know-how to deliver energy. In the end they will own wind, solar, fusion, etc.

Monopolies resist change. But if change is inevitable, they fight to own it.

[SerScot]

Wayfriend,

At&t's market monopoly extisted at the sufference of government. Without regulation how would At&t have prevented developers of cell phones from making and marketing their products?

The other monopolies you mention are using government to protect their market positions. If you remove government as a facilitator of monopolies technological innovation makes the earlier technology monopolies obsolete and impossible to sustain.

[Zarathustra]

No one disputes that monopolies are usually bad (though not always). This wisdom is built into capitalism from the very beginning. Adam Smith acknowledged that capitalism would need to be regulated to prevent monopolies, enforce contracts, and generally keeping the market free. Monopolies are no more an indictment of capitalism than malpractice is an indictment of modern medicine. These are the worst-case scenarios of the practice in question, which each has every incentive to avoid. And as SerScot was trying to point out, capitalism has built-in mechanisms (e.g. competition, innovation) that minimize these dangers. WF is correct, too, that monopolies resist change, but that's because they are vulnerable to an innovative competitor. Which is just another way pointing out their weakness, rather than the overblown exaggerations of their strength seen here.

If AT&T had a monopoly on phones, it would end up with a monopoly on wireless phones.

A company having a monopoly with one kind of technology doesn't guarantee that this company will be the same one that produces the next-gen technology, which eventually supplants it. It's like saying that a horse carriage monopoly would have been the only car company. First, they have to invent the damn thing.

Technologically, no one would want the first wireless phone unless they could call a land-line phone.

That's like saying no one would want an email account if they couldn't email a physical mail box. Forms of communication that can only communicate with others who have that same form have appeared many times in the past. You form a network, and then grow it. There are always "first adopters" in any new tech, usually the rich, i.e. people who can afford to spend lots of money on luxuries, even if they have limited use. For example, remember the limited amount of content for those first HDTVs that cost $30,000. Heck, originally I would have bought a cell phone even if it meant I could only speak with my wife. In fact, that's the reason we got one in the first place, not to call everyone we knew who had a landline, but because she was going on a trip without me and wanted to stay in touch. I would have easily bought two for such a purpose. All I needed at that time was a mobile network of two. That's all I cared about. Until then (2001?), I never even considered a cell phone.

Consider how the big oil companies have worked to control the new energies. They use crony capitalism to ensure that they have the advantages, and argue that only big oil has the know-how to deliver energy. In the end they will own wind, solar, fusion, etc.

Do you have some evidence of this? There is plenty of crony capitalism happening on the other side, too. Like Solyndra. If someone could come up with a better, cheaper form of energy, they could put Big Oil out of business. Cell phones are better than landlines. Wind, solar, etc. are not better/cheaper than oil. They can't compete even in a fair market.

There is absolutely nothing about fusion that will give oil companies an advantage in bringining it to market. I'd be as shocked about Big Oil running our fusion ecnomy of the future as I would if Sears had developed into a monopoly for computer operating systems.

But in the end, I really don't care who produces or controls it, as long as it gets developed, no more than I worry about who invented fire or if the Kingsford company dominated the market in charcoal briquettes. When it comes to the fundamental, historical breakthroughs in human progress, I don't care if a few get rich making them a reality for the rest of us. And if they make satisfactory products at a price I'm willing to pay, what other purpose do such criticisms serve other than to identify a political boogie man?

Concern over private sector monopolies would be more believable if the people who complained about them had the same kind of concern over government monopolies ... like universal health care or public school. I'm more concerned with monopolies I'm forced to pay for (with taxes) than monopolies over things I'd don't have to buy.

[wayfriend]

At&t's market monopoly extisted at the sufference of government. Without regulation how would At&t have prevented developers of cell phones from making and marketing their products?

I just said why. Let me make it clearer.

Imagine AT&T has a monopoly on phone service. Your inventing a wireless phone. Imagine selling your phone to someone.

"This is my awesome phone! Buy it!"
"It's neat. Let me call my wife with it."
"Sorry - you can only call other people with wireless phones."
"Umm... who else has a wireless phone?"
"Well, no one yet, you'll be the first. But I'm sure it'll be a hit soon!"
"Pass."
...
To next person: "This is my awesome phone! Buy it!"

Now, you can get SOME products off the ground in that way. However, the infrastructure you'd be required to build before you could have customers would make financing prohibitive.

But you may have deep pockets. You build infrastructure. People start buying wireless phones to talk to other cool people with wireless phones.

... and as soon as AT&T thinks it's viable, they will compete with you. They have tons of cash (monopoly!) already have most of the infrastructure and their phones inter-operate with traditional phones. You cannot compete and you die a slow, horrible death.

It's no coincidence that the first major wireless phone companies were first phone companies.

[SerScot]

Wayfriend,

That might work, or it might mean that the person who invents the cell phone is better able to hold on to his tech and others see it's utility and buy it.

[Zarathustra]

WF: it’s not a coincidence that phone companies capitalized on the first major cell phone systems (not the phones, see below), because they invented those cellular phone systems.

1970: Amos E. Joel, Jr. of Bell Labs invented the "call handoff" system for "cellular mobile communication system" (patent granted 1972). 1971: AT&T submitted a proposal for cellular phone service to the U.S. Federal Communications Commission (FCC).

But the first major cell phone company was Motorola, which invented the cell phone … which makes sense because they started out as a radio company (i.e. wireless communications) that produced the first walkie-talkies.

Motorola was the first company to produce a handheld mobile phone. On 3 April 1973 Martin Cooper, a Motorola engineer and executive, made the first mobile telephone call from handheld subscriber equipment in front of reporters, placing a call to Dr. Joel S. Engel of Bell Labs.[5][6] The prototype handheld phone used by Dr. Martin Cooper weighed 1.1 kg and measured 23 cm long, 13 cm deep and 4.45 cm wide. The prototype offered a talk time of just 30 minutes and took 10 hours to re-charge.[7] Cooper has stated his vision for the handheld device was inspired by Captain James T. Kirk using his Communicator on the television show Star Trek.[8]

John F. Mitchell,[9][10][11] Motorola's chief of portable communication products and Martin Cooper's boss in 1973, played a key role in advancing the development of handheld mobile telephone equipment.

So the first company to produce cell phones—i.e. the first “cell phone company”—wasn’t a phone company in the sense you're using the term. However, they worked with traditional phone companies to overcome the very obstacles you have raised (e.g. whom to call, which network to use). It was a partnership between the hardware inventer and infrastructure companies. So it’s not true that a monopoly squeezed out competition. Multiple companies worked together … the opposite of a monopoly.

After that there was plenty of competition, even globally as Europe and US battled it out for a single standard. Note especially the bolded part:

In the 1990s, the 'second generation' mobile phone systems emerged. Two systems competed for supremacy in the global market: the European developed GSM standard and the U.S. developed CDMA standard. These differed from the previous generation by using digital instead of analog transmission, and also fast out-of-band phone-to-network signaling. The rise in mobile phone usage as a result of 2G was explosive and this era also saw the advent of prepaid mobile phones.

In 1991 the first GSM network (Radiolinja) launched in Finland. In general the frequencies used by 2G systems in Europe were higher than those in America, though with some overlap. For example, the 900 MHz frequency range was used for both 1G and 2G systems in Europe, so the 1G systems were rapidly closed down to make space for the 2G systems. In America the IS-54 standard was deployed in the same band as AMPS and displaced some of the existing analog channels.

In 1993, IBM Simon was introduced. This was possibly the world's first smartphone. It was a mobile phone, pager, fax machine, and PDA all rolled into one. It included a calendar, address book, clock, calculator, notepad, email, and a touchscreen with a QWERTY keyboard.[28] The IBM Simon had a stylus you used to tap the touch screen with. It featured predictive typing that would guess the next characters as you tapped. It had applications, or at least a way to deliver more features by plugging a PCMCIA 1.8 MB memory card into the phone.Cite error: A <ref> tag is missing the closing </ref> (see the help page). In addition, the standardization process focused on requirements more than technology (2 Mbit/s maximum data rate indoors, 384 kbit/s outdoors, for example).

Inevitably this led to many competing standards with different contenders pushing their own technologies, and the vision of a single unified worldwide standard looked far from reality. The standard 2G CDMA networks became 3G compliant with the adoption of Revision A to EV-DO, which made several additions to the protocol while retaining backwards compatibility:

 Introduction of several new forward link data rates that increase the maximum burst rate from 2.45 Mbit/s to 3.1 Mbit/s
 Protocols that would decrease connection establishment time
 Ability for more than one mobile to share the same time slot
 Introduction of QoS flags
All these were put in place to allow for low latency, low bit rate communications such as VoIP.[29]

The first pre-commercial trial network with 3G was launched by NTT DoCoMo in Japan in the Tokyo region in May 2001. NTT DoCoMo launched the first commercial 3G network on 1 October 2001, using the WCDMA technology. In 2002 the first 3G networks on the rival CDMA2000 1xEV-DO technology were launched by SK Telecom and KTF in South Korea, and Monet in the USA. Monet has since gone bankrupt. By the end of 2002, the second WCDMA network was launched in Japan by Vodafone KK (now Softbank). European launches of 3G were in Italy and the UK by the Three/Hutchison group, on WCDMA. 2003 saw a further 8 commercial launches of 3G, six more on WCDMA and two more on the EV-DO standard.

The high connection speeds of 3G technology enabled a transformation in the industry: for the first time, media streaming of radio (and even television) content to 3G handsets became possible,[30] with companies such as RealNetworks[31] and Disney[32] among the early pioneers in this type of offering.

The state we’re at now, with 4G, it’s possible to leave behind phone companies entirely and go through the Internet (via a cable or satellite company, for instance), which can also handle landline phones … completely circumventing even the hardware/infrastructure of traditional phone companies.

One of the main ways in which 4G differed technologically from 3G was in its elimination of circuit switching, instead employing an all-IP network. Thus, 4G ushered in a treatment of voice calls just like any other type of streaming audio media, utilizing packet switching over internet, LAN or WAN networks via VoIP.[34]

Look at all the companies involved in the history of cell phones. Why didn’t a monopoly form with cell phones? Why wasn’t the government required to break one up? I think the answer is obvious: freemarket competition and innovation made it unnecessary.

en.wikipedia.org/wiki/History_of_mobile_phones