Тег: Marketplace

What if a monopoly has a larger economic cushion and can operate at a loss for several years?

How do you plan to fight it? How will small companies, even those with large investors, be able to withstand a giant, and will investors even take such risks by investing money in small companies? Yes, I know the arguments that monopolies cannot arise, but what if it happens anyway, and moreover, I understand that ancap is not planned to be built from scratch, but on an existing market where large producers already exist.

Anonymous question

A monopoly is the desired and most comfortable state for any business. Under the conditions of centralized political power, large businesses are economically motivated to engage in lobbying to ensure a privileged position in the market through regulatory capture. Small businesses are economically motivated to create associations and engage in lobbying through them. In a country with a sufficiently diversified economy, this creates a situation where most entrepreneurs, one way or another, feed politicians, regulations become more complex, exceptions to the rules multiply, and business, having spent a lot of effort acquiring the regulator’s favor, in the best case remains where it started. If strategic industries are singled out in a state, then all is lost: this means the guaranteed infringement of other industries.

And so, according to the problem’s conditions, we have managed to gradually move from this depressing situation to a free market, primarily free from political power. Let’s assume this happened quite quickly, and we inherited a skewed market where some enterprises are disproportionately large, even up to monopolies in certain industries. What does this mean? If they are larger than is economically feasible, it means they produce their goods with higher costs than if they were smaller. At the same time, they have serious reserves and prevent the emergence of small competitors by supplying their goods at a loss. This only means that some small (and therefore more economically efficient than the monopoly monster) entrepreneurs will constantly try to enter this market, thereby creating pressure on the monopolist, preventing it from relaxing and raising prices to a comfortable level. Speculators will stockpile its goods by buying them cheaply, and as soon as the monopolist raises the price, the stockpiles will be sold for a profit, forcing the monopolist to lower the price again. This will continue until the monopolist’s shareholders replace the directors with more sensible ones, because they want stock growth and dividends, not all of this.

The small players, who all this time were simply doing something else where there was no monopoly, will then breathe a sigh of relief and flood the newly opened market. And the consumer, all the time while the goods were sold at a loss, was happy and had no reason to be outraged by the monopolist’s behavior. So why fight a dumping monopolist? He is doing great; this is what socially responsible business looks like under ancap.

Book about ancap – finished the section on the marketlet

I’ve unexpectedly ended up hanging out in Albania, so my posting pace has slipped a bit. On the other hand, dropping out of the usual flow is very conducive to slow-paced creativity, so I relatively quickly finished the two remaining chapters of the market section in my future book: specifically on the market and on capitalism. In the next section, I will finally begin describing ancap—assuming, of course, that I don’t get swept away somewhere again.

A positive feedback loop breeding inequality. Terrifying.

I watched the conversation between Grigory Bazhenov and representatives of the European University on the topic of inequality.

I didn’t do this immediately after the video was released because the topic seemed boring and leftist to me; it is obvious that if inequality is caused by redistribution through plunder (for example, taxes) and coercion (for example, regulations), then one can oppose the consequence, but it would be more useful to eliminate the causes. And if inequality is caused by the fact that people voluntarily give more money to Alice than to Bob, then one can only be happy for Alice and reflect on whether something can be adopted from her practices so that we can get more too. But then I had a bit of free time, took a look, and didn’t regret it.

The part where it was listed that there is income inequality, wealth inequality, and inequality in the number of limbs was not very interesting. I was struck by one specific strong take that I would like to discuss—regarding inequality caused by the difference in time preference.

Its content is approximately as follows. If one economic agent has a lower time preference, and economic agents can lend to each other at interest, then, all other starting conditions being equal, in the long run, he will plunge all economic agents with a higher time preference into debt bondage, with the further prospect of starving to death. This is, obviously, a mathematical model; however, I immediately recalled historical precedents.

Ancient Athens was formed by a union of Ionian tribes settled in Attica, with an initially fairly high level of equality. Over time, however, the stratification between citizens increased, and some gradually fell into debt bondage to others. This led to civil unrest, and as a result of Solon’s reforms, all old debts were forcibly forgiven, land was redistributed, and debt slavery was prohibited. In other words, the market—due to the difference in time preference—led to extremely unpleasant consequences, which were then corrected by purely etatist methods.

The emancipation of the peasants under Alexander II in the Russian Empire provided roughly equal starting conditions for all members of any given peasant community. However, again, the difference in entrepreneurial abilities and time preference over half a century led to stratification from kulaks to hired laborers, with the latter losing their means of production and often finding themselves in credit bondage. Then there was a civil war, followed by a complete redistribution of property and the writing off of old debts.

The question is: what can free-market anarchism oppose this mechanism with under modern technological conditions? Because if we answer “nothing,” it will mean the unviability of the anarchic model—it will inevitably be replaced by something much more leftist, after which, at minimum, property will be redistributed and debts written off, and at maximum, successful entrepreneurs and their heirs will be hanged from lamp posts.

Let’s look at what mechanisms the free market provided to counteract the mentioned effect in the two previous examples.

Becoming landless, selling one’s household members and oneself into debt slavery was not the only possible development for a landowner with a higher time preference or someone less competitive for some other reason in the ancient polis. Furthermore, as such people accumulated, the polis established colonies. There, land-poor colonists received much larger plots than in their homeland, and with them, a new chance for prosperity. This extensive path to solving the problem of inequality led to the colonization of the entire Mediterranean by the Hellenes. Subsequently, a division of labor arose between the colonies and lively trade began. Now, instead of farming a small patch of land, our Athenian could engage in, for example, molding amphorae or sewing sails—this also gave him a new chance for prosperity.

Similarly, becoming a hired laborer was not the only option for an unlucky peasant in the Russian Empire either. He could become a colonist and move to Siberia, or move to the city and become a worker. Under the conditions of a freer market in the USA, urbanization absorbed a huge number of former farmers without any revolutions, and those who remained began to cultivate much larger areas using much more serious equipment, supplied to them thanks to the much higher-paid labor—compared to that of a hired hand—of their former poor neighbors.

So I believe that an anarchic society under a free market will be able to avoid the scenario embedded in the mathematical model with different time preferences but unchanging market conditions. If the emergence of new markets is not legally restricted, then those with a higher time preference will actually strive to take advantage of new opportunities and obtain windfall profits—while those with a lower preference will stay in a reliable but relatively low-margin business, and everyone will be relatively well off. The second factor weakening intertemporal inequality is personal freedom. You are not a member of a community. You are not the property of the head of the family, who can sell you into slavery to pay off a debt. You are self-owned; you have your own time preference, your own inclinations and talents. You won’t perish. In any case, you are not doomed to perish, and let the scary mathematical model not frighten you.

Consumer Serfdom

Currently, many companies, such as Apple, Tesla, and John Deere, design their products so that in the event of a breakdown, the user cannot repair them, even if they know how. For example, a farmer could buy a certain part for a John Deere tractor for $100 and would have no trouble replacing it. However, the software installed on the tractor will prevent such a procedure, and the farmer will either have to pay $5,000 for the manufacturer’s service or install pirated software. In essence, the farmer does not own the tractor but merely takes it on an indefinite lease.
How does libertarianism view such a policy?

themouse1_ from Bulbaland

The examples provided are particular cases of the platform economy. Similarly, an app developer is forced to adapt to the requirements of the company producing the operating system for which the app is developed. Likewise, a hired worker on a plantation in Brazil a century ago was obliged to buy groceries only from the shop run by the plantation owner, and in Soviet Russia, a collective farmer could only redeem his work-days, again, at a specific village store.

In short, these are not entirely market cases. Can such quasi-monopolistic situations arise in a completely free economy? Yes, but they are unstable. The emergence of a profit source significantly higher than the market average leads to others wanting to imitate such success, and soon competition levels the margin: platform owners, competing for the customer, begin to spend more on maintaining their loyalty.

Libertarianism proposes removing politics from the economy. Will this make John Deere more reasonable? Not immediately. Simply put, they will no longer have the ability to sue the farmer for installing pirated software. Therefore, wanting their authorized service to not go completely under, they will lower repair prices. Moreover, some Japanese or Belarusian tractors will start being imported duty-free, so the consumer will have a real choice and will be able to acquire the solution that maximizes their profit from operating the tractor.

Similarly, without the ability to force a worker to eat expensive slop in the factory canteen, without the ability to forbid installing apps from outside the app store on a smartphone, without the ability to punish a kiosk owner for moving under the protection of another security firm—the owners of all these platforms will find that racketeering practices work worse and worse, and they must get used to acting within the framework of fair competition. It’s fine, they’ll get used to it.

A good tractor, what else

How do you feel about being forced to participate in a market economy?

Input data: the team of Barcelona Mayor Ada Colau sent letters to 14 large property owners, threatening to forcibly buy out 194 vacant residential units owned by them if they do not put the apartments on the market.

Anonymous question

Of course, the provided input data is incomplete. Here, for example, is a little more information about rental market regulations in Barcelona, gathered from a quick Google search:

So, look at what is happening. First, the Olympic Games are held in the city; for this occasion, the state pours serious money into increasing the city’s tourist appeal. Tourists flood the city. Demand for short-term rentals spikes. Residents who rent housing themselves begin to grumble: rental prices have risen for them. Locals who are not tied to the tourism market also grumble: noisy tourists are wandering everywhere, and there is no room to move. The government listens to the voters’ opinion and begins to tighten the screws. Time and again, it demotivates property owners from renting to tourists—at high prices and for short terms—and instead demands they rent to locals—cheaply and for the long term.

What do property owners do when they realize that renting to anyone under the current rules is unprofitable? They freeze the business and wait for favorable conditions. Or they rent completely “under the table,” so that officially the housing stands empty. What does the government do? It begins to “force” them to the market, demanding that the housing be listed for long-term rental at regulated rates, threatening otherwise to forcibly buy out their property at prices set by the government itself.

With exactly the same success, one could talk about forcing peasants to the market who, for example, are forbidden from selling what they grew personally at the city market and are instead required to hand it over for pennies to wholesalers appointed from above.

How can I feel about this? Naturally, strongly negative. There is no need to call a state plan a “market”; it only introduces unnecessary confusion.

The Barcelona case shows very well how even a seemingly single benevolent government intervention (investments in infrastructure for the Olympic Games) leads to a market distortion, which causes public discontent and provokes further strengthening of government regulations. So, the best answer to the question of how the state can help you still remains the eternally relevant answer: Laissez faire et laissez passer.

What is a poor, foolish person to do in the market? If he cannot adapt or does not want to.

Haegansn

I don’t know if I’ll disappoint you or if this will simply be feeding a troll, but for the poor and foolish, whether in a market economy or under socialism, there are only two paths: to lean on someone else or to find unskilled work. If they are also lazy, only the first option remains.

Leaning on someone is more profitable in a country with a market economy: there are charitable shelters and soup kitchens, freeganism, crashing on couches, acquaintances who are more or less well-off (there will be more of them in a market economy), or begging. Under socialism, there are fewer options: he who does not work, does not eat, so only acquaintances and crashing on couches remain (even begging is often forbidden under socialism).

Unskilled labor is easier to find under socialism, since the right to work is one of the most important positive rights guaranteed by the socialist system. The utility of such labor for people may well be zero or negative, but that depends on luck. In a free market, unskilled labor will likely be more intensive, but it will also be paid higher.

Finally, there are intermediate regimes, which are the majority. There are regimes like the Russian one, where there is no proper social safety net, but you can hardly make any money in unskilled work. There are social democracies eating away at their liberal inheritance: there, one can live quite well on benefits—however, there are many such poor, foolish, and cunning people there; they form ghettos, and few would like the conditions within them.

I have my own libertarian boxing club; can I publish our article about fighting corporations with you?

Daniil

From what I understand, the main point of the club is as follows: weapons are, of course, cool, but they are rarely managed to be used for self-defense, and safely—even more rarely. Meanwhile, for a libertarian, it is not only useful to know how to defend oneself in a wide variety of situations, but this skill, when applied, also advertises libertarian ideology in its own right.

The proposed article describes how, within the framework of private security production, the world does not revolve solely around private security companies—since this field is very strictly regulated by the state, and therefore such companies, firstly, provide their services at a disproportionately high cost, and secondly, the spectrum of services does not cover all types of demand.

Instead of private security companies, the revival of such a soft and humane means of reasoning with unfriendly counterparties as hiring a team of trained musclemen with powerful fists is proposed. Of course, in most cases, this cannot be seen as an alternative to hiring a professional security firm, but for organizing some libertarian events, such heavy artillery as professional security firms is not required. Yes, actually, hiring trained fighters to guard a hall is either excessive (usually, admonishment and the threat of calling the police are sufficient) or insufficient (if the aggressor is the police themselves).

On the other hand, it’s stylish. After all, a press wall provides no direct benefit either; one can take photos against a bare wall—but people still order them to be printed. Thus, proper ancap security should not be neglected for roughly the same reasons.

The article ends with a call to join the club (which presumably wants to mutate over time into such a fighting corporation) and to subscribe to the channel People of Good Will. I went to take a look at the channel, and there is a curious Code of the Person of Good Will. The Code is imbued with the values of republicanism, which Rodion Belkovich talks about so convincingly, and generally paints a rather attractive image. So read it; it is beneficial for the soul.

Cruel Games

I’ve read about the ideology of non-violence, and a question occurred to me. In some “leftist” European countries, mixed martial arts were banned for a long time—they were considered not a sport, but a spectacle that encourages cruelty. How does Ancap-chan feel about this? On one hand, it is a prohibitive measure, but on the other, it is ideologically correct.

анонимный вопрос

Here we see some confusion between cause and effect. Various violent games do not encourage cruelty; they are simply a manifestation of already existing cruel customs, and to some extent, fashion. The desire to thrill the nerves persists in people, but for the vast majority today, it is important that everything be voluntary and slightly “make-believe.” A disaster movie, rather than the actual burning of Rome. BDSM instead of real torture. Combat sports of varying degrees of brutality instead of judicial duels. Cirque du Soleil instead of a traditional circus with its inevitable lions.

What would happen if a mixed martial arts club or some other kind of harsh hand-to-hand combat gym were opened in every neighborhood? Half would go bankrupt (in the Russian case, they would run to the state to beg for sports development subsidies). Forty percent would tone it down and switch to something like capoeira. The “market-chan” doesn’t need that much brutality. But it needs some. I wrote a rather amusing post about this a long time ago.

Sorry, it’s kind of short today)

The market will sort it out, inshallah

Is there perhaps a card number where a donation can be transferred?

The “Money and Apocalypse” channel (close in spirit)

I took a look at your channel; there are some interesting thoughts, and I subscribed, although in my opinion, there are too many reposts, materials are released too frequently, and the overall content is more about the apocalypse than about money. So, after some time, I might unsubscribe, once I’ve had my fill. It’s a bit strange that an economist and a financier, not unfamiliar with reading materials from Simon Cordonsky and reposting figures of Bitcoin’s annual growth, prefer to request a bank card number for donations, even though it could be done in Bitcoins, whether on-chain or via Lightning. But a potential donor has the right to their own quirks, so I added a form for sending rubles to the donations page.

Of the interesting thoughts in the channel, I’ll mention the last one. The graph of returns on education, which shows a growth in returns in the nineties, followed by a decline in the two-thousands. You and some of your readers suggest that this is due to the decrease in economic freedom, where loyalty replaced competence. Other readers point out that it might be due to the general decay of higher education, because the world has become too fast for long-term study. I haven’t seen a similar graph for, say, the USA; it would be interesting to compare, as rumors suggest they have similar problems there as well. In short, there is something to reflect upon here.

I would also like to note the thought migrating from post to post that the decline in real disposable income of citizens, observed for almost all the “tens” (decades), is not just man-made, but also deliberate. A subject must be poor so that they think about their daily bread, rather than pondering strange non-material questions like changing the regime. Moreover, a low level of wages provides the country with some degree of investment attractiveness, regardless of country risks. This is an interesting conspiratorial consideration that explains the observed facts, but is not substantiated by any leaks of secret instructions or similar things, which are, in fact, the only way to confirm conspiratorial theories.

Forced Protest

The friendly channel Anarchy+ is publishing a multi-part longread about how the presence of a radical wing, ready for violent action, affects the course of protests. Five parts have been released so far, and more are coming. The series explores various subtleties, such as how the effects differ when the radical wing is friendly with the moderate one, and when there is no coordination between them—and so on. Two or three more episodes are expected, which will then be collected into a single post, but I preferred not to wait for the end because an interesting practical example has come along.

The most notable protest of last year was, of course, Belarus. In its aftermath, political scientists either gently lamented that a regime relying on a compact, loyal security core remains stable regardless of the dissatisfaction of the rest of the population—as confirmed by two examples, Venezuela and Belarus—or they expressed indignation toward the protesters, arguing that by taking off their slippers before standing on benches, they demonstrate their complete toothlessness to the regime’s dogs and give a carte blanche for repressions, the severity of which is directly proportional to the size of the demonstrations.

And then I am handed a link to an extremely curious channel, which is used to promote specifically violent actions in Belarus, and in an extremely harsh form. Read it carefully; it is quite young, so you can manage its entire content. In short: the channel intends to launch a full-scale guerrilla war against the regime. The tactics proposed make it clear: the authors of the channel, whoever they may be, know very well how courts work under ancap, and they also perfectly understand that very influence of a radical wing on the protest as a whole.

I have attempted to roughly formulate what these anonymous organizers of decentralized violent protest are guided by:

  1. Today, the overwhelming majority of those dissatisfied with the regime are indeed not ready for an open armed rebellion, but many are extremely irritated by the complete lack of concessions from the regime in response to peaceful actions.
  2. The lack of readiness for open rebellion in some is caused by a principled unwillingness to escalate violence, while in others, it is an unwillingness to bear serious costs.
  3. A person is capable of developing habits and skills. Starting small, they get drawn in, and then can gradually train for serious violence.
  4. Violence must not be heroized. Heroes take off their slippers before standing on benches. Terror is carried out by scum. And society has a demand for the appearance of these loathsome characters who will fight the regime out of the lowest motivations.
  5. For a socialist country, the textbook lowest motivation is money. It is best if servants of the regime are killed by other servants of the regime for the sake of money. But any other lumpen will do.
  6. How much to pay for which actions? Who will pay? Let the “market” decide that; the channel’s job is to describe the business model, which anyone wishing to do so can then adopt.

What can we extract from these materials?

Firstly, keeping in mind that Belarus is something of a testing ground for the Russian regime, one can assume that something similar may await us in the RF, so why not keep a closer eye on the underside of the protest as well, trying it on for size in advance.

Secondly, the channel provides a number of practical tips on anonymization that will also be useful for peaceful agorists.

Thirdly, we see vivid confirmation that market relations work perfectly even when fighting the state, which means the market will survive without the state. Not that this is exactly some discovery, but we’ll add this to the pile of evidence.

Nothing special, just an open registry of targets