The fallacy is assuming that the government will make everything cheap for consumers.
In practice, government regulation of prices just changes the game. Look at any market with rent control: There are numerous meta-games around building or not building new supply, landlords are incentivized to not fix units because they know tenants don’t want to give up their rent control and move, and a new market emerges where people illegally sublet their rent controlled apartments because it becomes attractive to take advantage of the market demand that landlords aren’t allowed to capitalize on.
The other fallacy in all of this is thinking that companies control both supply and demand. For nearly all commodities, there is a price where consumers won’t pay for it. If rents get too high, people move to a different city. If gas gets too expensive they start carpooling and looking for WFH jobs. If eggs are too expensive they eat something else. These choices make people angry as hell, but there’s no denying that these choices exist. Companies can’t push past these limits and force people to buy at any price. They still have to discover that point on the supply and demand curve.
With what money? It takes three months rent up-front to move (first+last month rent and a deposit equal to one month rent) up front. People _need_ a place to live and will spend every last dollar to not be homeless.
All companies are greedy. That's the reason for existence. Your point that monopolies and oligopolies need to be crushed is very valid though. I wish more mergers were rejected in the first place.
Regulating prices is a recipe for disaster though.
That's an assertion, not a statement of fact. Pricing in natural monopolies is a mature subject, and public utilities have been a thing for over 100 years. Also, pricing for medical procedures is regulated in Europe, and it works extremely well.
Setting prices where you could just have a functioning market has historically been well proven to lead to disaster. Look at any communist country. The GDR ended up allowing luxury stores that were not price bound and they were a huge hit for a reason.
It does not work “extremely well” at all, it results in shortages and wait times exactly as you would expect from economics 101. I’m speaking from personal experience having been through it myself but feel free to look up how many Canadians go to the US every year and pay out of pocket for more evidence.
Black and white oversimplification that muddies the water.
You really can't think of two companies with incredibly different levels of "greed"?
There are a lot of rules whose de facto consequence is to prohibit describing the true reason someone is doing something instead of actually prohibiting them from doing it.
1. company decides to push the boundaries of the socially acceptable when it comes to cutting corners (e.g. screwing their customers, or employees, or environment, or debtors)
2. People don't like it, but rationalize this as being a natural consequence of incorporation and the profit motive. Hence while they grumble, there negative impacts to public perception don't actually cost the company as much as you might think
2b. Even if there's a boycott, there will be vocal minority that thinks it's all a bunch of whiny <target audience we're better than>. They'll actively harass or undermine said boycott or backlash, even if in a purely egotistical sense their interests are actually aligned with the boycotters
3. Social norm is reset; we all collectively expect even less from companies. That doesn't however mean the new norm is better or maintained, because as soon as there's some new major conflict between short-term profit and maintaining a decent reputation in public, we go back to step 1 from the new, lower baseline.
Stuff like increasing partisanship, and decreasing incentives for journalist (whether profession, citizen or influencer) to maintain their professional standing (as opposed to targeting clickbate) probably smears those gears nicely.
Many companies have historically clearly paid well over the odds to maintain their reputation, and done well doing so. It's just not true that nihilistic short term greed has always paid; obviously it didn't and still doesn't really. It profitable to do the little, but simultaneously also to do as many cheap things that materially affect public standing as possible.
By promoting the profit motive past a merely utilitarian means to an efficiency-optimizing end into a matter of national identity and point of distinction vs. in particular the USSR, we've shifted our culture beyond what's really rational. We (as a society) don't merely respect and understand the profit motive; we see it as a sign of merit - and significant enough merit that "winning" on that scale excuses a lot of other bad behavior.
There is no such company "Big Potato Cartel". It's four separate companies, grouped together by the author's observation that together their frozen-potato market shares sum to 97%. But your mental image is something like a drug cartel or OPEC. Someone is playing with your emotions.
How many big companies would you expect in a mature market? Four seems pretty normal.
The article includes the accusation that these companies engage in price fixing via an app. It's an interesting claim, possibly worth investigating, but there's nothing substantial in the article to support it. Just a lot of emotional manipulation.
I don't like being emotionally manipulated.
You left out all four companies feeding data to PotatoTrac, all four companies announcing raising their prices by the same amount at exactly the same time, executives shifting which company they work for like it's a merry-go-round, the four companies communicating extensively between each other in a way not even remotely natural for competitors, the companies demanding suppliers not take on other customers, restaurant distributors forcibly bundling fries with other foods so that restaurants have to sell them, and so on.
Oh, and multiple anti-trust lawsuits: https://fortune.com/2024/11/22/potato-cartel-price-fixing-la...
Also left out that other mega-food companies have been caught doing the same thing...
Newsflash: anything can be done badly. Cherry-picking the worst examples proves nothing.
It seems to me that the US and other nations locking these countries out of the global market has been a pretty major factor in their current economic situation. Do you disagree? I'd also posit that it might be the case that an autocratic takeover in each of these nations has negatively impacted them.
Strawmanning like this may make you think you’re clever but it signals to the “average person” that your mind is made up.
I don’t read articles here because my mind is made up but because I like considering different points of view and data. Maybe start with that spirit next time?
You got me. https://thenib.com/mister-gotcha/
Which is what, exactly? The US is per capita richer than almost all EU countries by a huge margin (with a few small exceptions mostly enabled by regulatory arbitrage targeting US money), so forgive me if I don't take your seething commentary about the US economic apparatus very seriously.
https://en.wikipedia.org/wiki/Standard_Oil
Carnegie Steel: Government intervention. The federal government imposed steep tariffs on imported steel, shielding domestic producers like Carnegie from foreign competition. Without those tariffs, cheaper British/German steel would have kept Carnegie’s dominance in check.
Southern Pacific Railroad: Government intervention. The federal government gifted it, through the Pacific Railroad Acts, millions of acres and subsidized loans. This state-sponsored land monopoly let it block competitors from critical routes.
In reality, comparative advantage and specialization dynamics do not uniformly equilibrate on monopoly markets.
The entire food production and provision supply chain has razor-thin margins. If you're hyperfocusing on that industry, it's a sign that your heuristics are pointing you at the wrong things.
What is that natural end state? Natural monopolies are exceedingly rare, almost all monopolies are the result of government intervention.
2) Incumbents buy each other and raise prices
If you only had the second one then as soon as the incumbents tried to raise prices, new businesses would want a piece of it and enter the market, causing prices to fall until it was no longer profitable to enter the market.
I'm sure there are plenty of cases where significant competition is a natural end state, but how common those are in comparison? I'm curious.
After all, the natural inclination of a powerful elite is to protect their interest. It's business 101 to want a moat, and tearing down one set of artifical legal protections that allows for a moat allows on the other hand for the far more extreme quite physically violent moat in the form of a putin-esque kleptocracy.
The argument merely sounds convincing because it's very selectively implying that certain monopolies are created by state power and might be weakened by free market principles without considering what a free market even is (generally a regulated one), nor addressing the fact that other monopolies will arise precisely because because the lack of regulation allows winner-take-all brute force strategies to work.
That doesn't mean Milton's ideas are without merit - but that there is a breaking point; dogmatically hoping for anarchy to avoid harmful centralization of power is problematic because of the dogma; not because it's never a valid approach.
But sure, if you're going to embrace Milton's (intentionally) vague proposition in the way it was likely intended - to provoke thought - then sure; there are state regulations that are in part to blame for some of today's near monopolies - the interaction between intellectual property, incorporation, and state-enforced contract law. As a matter of debate, sure, it'd be interesting to weaken all three and in particular their interactions. I just highly doubt that's very practical, nor would it be very easy to predict the outcome, especially once international power-plays start circumventing even the best of intentions.
If a single company can sell almost 100% of an essential good, they need to atomatically lose the power to set their prices and margins independently. Let them go through a cumbersome govenment approval process for price changes or something to cap margins. Price fixing cartels need to be busted more aggressively.