All "free market" ideals require no/low barriers to entry in order for the market to be "self regulating". Said absence of barriers to entry almost never exists, hence the idea of completely free markets is completely naive - you need regulation.

Markets also cannot account for externalities. If those externalities are something you care about (e.g. the environment you live in) - you need regulation.

Economies of scale abound in most markets, and this tends towards monopolies and regulatory capture. If you don't want monopolies, because you value your freedom as a consumer - you need regulation.

This is very basic economics - I wish it was more widely taught.

It more basic than that, it is what used to be considered common sense. The United States has screwed basic education, effective communications is not even taught - the seed of common sense, and has been producing intellectually crippled wage slaves for that last 40+ years. It's going to require a culture revolution to pull out of this nose civilization-wide dive, and that revolution is not going to happen in the USA.

I have really noticed that over the past year or two. A worrying number of Americans seem to lack even basic knowledge of the world outside America or even have the ability to think seriously about the long term consequences of decisions. That's not saying all Americans are this way - far from it - but it does seem that a critical mass has been reached. Things like Trump are only symptoms of this, and I cannot see any realistic way the situation can be salvaged.

Add to that, few Americans know history beyond the American History (propaganda) they were taught in elementary school and have little to no interest in history at all, and if they do it's battles and war and glory nonsense. Few Americans can even conceive of the concept of their location in history. Far too many 'mericans think the Earth is Biblical's aged to be around 6K years... A critical number of them too, enough to keep abject morons in government offices.

Thoughts and prayers are cranked to 11 in the US but Dunning-Kruger is cranked to 12, cognitive dissonance is at 10.

Rhetorically people express the same fake optimism but are too dumb to realize that's all they are doing.

Is it really basic economics that free market leads to monopolies? I thought this is not something where there is a strong consensus about ; free market advocates will actually argue that this is regulation that leads to monopolies.

I didn't say that free markets lead to monopolies: I qualified that with the need for economies of scale. Those may not exist - but look at most of the markets you interact with in your daily life and try and find the ones that don't.

I'm not aware of how regulation of competitive markets would lead to monopoly. Are you referring to "regulation" in the form of state-endorsed/controlled monopolies? Those usually exist in situations where barriers to entry and economies of scale are so high that the state is simply "getting ahead" of the inevitable monopoly (e.g. national infrastructure).

Of course, corruption could also be what you mean by "regulation" that leads to monopolies, but all of this is predicate on the absence of corruption or cartels. If that's not the case you can throw all your assumption out of the window anyway.

> I'm not aware of how regulation of competitive markets would lead to monopoly

Competitive markets will always tend toward monopoly because that is the state at which the highest profits can be extracted. Regulation can, in some cases, help push it a bit faster in that direction by making barriers to enter the market even more onerous and expensive thus limiting or even eliminating new competitors. This allows the existing large competitors to either continue to knock out or buy up smaller ones, and the few remaining large ones to either merge to a single entity or settle into a state of non-competitive action (effectively collusion) where the market then either is or behaves as a monopoly.

Agreed! That sort of technical regulation needs corresponding market regulation to go with it to prevent monopoly (something we see very little of now).

> I'm not aware of how regulation of competitive markets would lead to monopoly.

It depends what you mean by regulation, right?

Many industries have extremely onerous and costly regulation which creates barriers for new entrants to those markets.

Yes onerous regulation can definitely hurt the competitiveness of a market, it is just another barrier to entry. The regulation would need to be specifically crafted to be a monopoly driver though: Its cost would need to significantly decrease with scale (beyond just the upfront cost that forms the barrier to entry), and outweigh the other economies of scale that might be present.

Yes, there's an entire body of work, starting with Ayn Rand, that vehemently argues that government interference in the economy is what leads to monopolies.

There are entire bodies of work that argue against the heliocentric nature of the solar system - that doesn't make them credible or relevant.

The person you're replying to was using an example to show how there isn't consensus, they weren't saying they agree with Ayn Rand. In fact, given their tone, if I had to make I guess, I'd say they disagree with her take.

I think we've been far too generous in the last decade with whose opinion is relevant to whether there is a meaningful "consensus" on a matter or not. Hence why I say that Ayn Rand is to economics as geocentrists are to astronomy - they're simply not relevant to a definition of consensus that has any value to me.

My opinion of Ayn Rand is no more flattering than yours, but I accept that she has quite a few powerful 'followers'. I wouldn't be surprised if quite a few of the current administration were big Ayn Rand fans. Their opinions may be absurd but, sadly, they are also relevant.

and that the earth is flat.

Depends on what you call a "free market". The usual understanding is that a free market relies on the participants having sufficient information and being able to trade freely. However, the necessary information is usually hidden by sellers so that buyers can't make a "rational" decision in what to purchase (see The Market for Lemons: https://en.wikipedia.org/wiki/The_Market_for_Lemons).

Trading freely is compromised as well as markets will almost always favour the larger purchaser and so there's an incentive for companies to become every larger in order to consolidate power and profits.

So, it's not so much that free markets lead to monopolies, but our bastardised version of free markets that lead to monopolies.

Also, free market advocates are rarely advocates of actually free markets, but instead advocates of asymmetric markets that favour the large incumbents.

Of course they lead to monopolies. If you start with a large number of equally capable suppliers and one somehow gains an edge then that one will be more profitable than the rest allowing it to invest and reduce its costs. This makes it even more competitive and provides a positive feedback loop. Eventually its competitors go bankrupt or get bought out by it.

Regulation can certainly exacerbate the problem, for instance rules that have a fixed annual cost or where the costs do not increase in line with volume favour larger concerns.

The idea that a totally free market can exist is a fantasy based on assumptions that simply cannot hold water. Regulation is necessary in order to prevent the powerful from abusing the weak. The fact that there are poor regulations does not invalidate the concept.

But that isn't happening though, you have local specialists everywhere that global giants still can't outcompete. Amazon is only dominant in USA and so on, they mostly just dominate a regulatory environment and can't compete well outside of it.

Amazon does a lot these days, are you talking about their ground satellite terminal service? Grocery Service? What about Online Pharmacy? Do you need to buy a car? Would you like some satellite internet? Do you need a k8s cluster, they'll even handle lifecycle management for you. They also seem well on their way toward seriously hurting the USPS, FedEx, and UPS, and will be outpacing the entire US Postal Service in total volume as of 2028. Would you like to watch a movie or buy an album? Health insurance?

I'm of course talking about maybe 1/50th of the services they offer these days, it is extensive.

"competing"

I'm not aware of any country besides the US in which Amazon dominates in anything.

Amazon has over 50% of the German e-commerce market, is also #1 in Italy and Spain.

Japan and India have also been getting investments, now that they've established a presence in such a massive scope of industries in the largest economy in the world.

Next year (2027) or maybe 2028 should see them have as a global internet provider ala StarLink.

In the UK, Germany, and Australia, Amazon has around 70% of the audiobook market.

Amazon.com is the world's largest global bookstore.

Twitch controls 70% of the game streaming market except for China.

Give it ~4 years and Amazon will be dominating UK and India delivery and private delivery services.

I live in the UK and Amazon essentially dominates online retail here. It's usually the go-to brand name which "killed the high street", by undermining it completely.

Try playing the Monolopy board game, you'll answer your own question.

>Markets also cannot account for externalities. If those externalities are something you care about (e.g. the environment you live in) - you need regulation.

Markets account for externalities via ownership and torts. This was gutted in the 1800s in the US where a judge ruled people couldn't sue for the impact of environmental pollution, in the name of the "greater good" of industrialization.

I'd disagree with the framing of this: The ownership and torts _were_ the regulation. I'm using a narrow definition of "market" that really only concerns supply and demand (because this is what "free market" ideals all revolve around).

Rule of law and precedent are considered quaint and optional now.

But this centuries-old decision not encapsulated as a constutional amendment is binding?

Nope.

You're comparing one leader sending special forces in to capture another leader to a free market? That's not a market, it's a brawl. Markets take place within civil societies. "Raw competition is the same as war", well OK, but that's got nothing to do with trade.

That's right. Entities must be acting as CITIZENS, first and foremost, bound by laws, norms, and shame.

Shame, the glue of civilization, as I call it, is quickly disappearing. The Nothing Matters LOL world is bound to decompose.

Entities acting as citizens is the exact failure mode of USA. They are not citizens, they are objects of regulation.

So are the citizens.

Don't get me started on "corporations are people" bullshit. I use "citizen" with a much deeper meaning.

Citizens are subjects, they have active voice. You may mean something deeper, but others will happily support only the “active voice” part. Corporations must not have it.

But in certain sense you are right. Corporate management should behave as citizens, and their citizen duties must be superior to their duties to shareholders.

Corporate charters require companies follow the law and make profit. Beyond following the law, what are citizen duties?

Public benefit corporations seem to go nowhere far enough. And I wonder if the language is intentionally vague at the outset.

For example:

https://www.sos.state.co.us/pubs/business/FAQs/pbc.html

> Beyond following the law, what are citizen duties?

Simple example: let’s say there’s an environmental law preventing corporation to make more profits. The good citizen should not try lobbying to repeal this law, even if this would be perfectly legal and lead to better outcome for shareholders. If CEO acts as good citizen and refuses to follow advice of the board and take this route, this should be legally defensible position.

OK but that would conflict with the charters of most companies. The charter instructs directors/officers to make profit for shareholders. It would be a significant undertaking to compel every company to somehow become a public benefit corporation.

Yes. And I agree with OC here that this should have been different.

I wonder whether this is a side effect of the self esteem movement, and the whole "don't care about what others think of you" ethos.

Individualism is the word. Adam Curtis' "The Century Of Self" is nice to watch on that topic, it's always available on Youtube somehow.

Conformity sucks though. The trend of attacking individualism is creepy.

Collectivism and conformity is not the same.

Individualism is just a polite word for selfishness and a lack of empathy, and it's at the root of many of America's cultural and political problems. We're supposed to be a nation, not 300 million cowboys suffering the indignity of one another's trespass. We can't even fix our basic infrastructure because no one wants to spend their taxes on anything that benefits anyone but themselves. We can't have decent healthcare because it would be "socialist." But we'll shoot each other in the streets because nothing projects individual power more than a loaded gun.

It isn't, though. Individualism also means things like dying your hair green and being generally fun and original. You can say "selfishness" instead, it's a perfectly good word, and there's no reason to worry about being impolite ... unless you're conforming.

There is a way to be a cohesive society without being assholes to each other. The United States somehow managed that before - more or less. I would not blame "individualism" directly, but we ARE in a timeline where a lot of people strive to be the worst versions of themselves.

Sounds like a copout, but I do insist that many of modern ills can be traced directly to the cancer that is social media. Monetizing rage cannot end well.

I suspect that the US managed its cohesion by keeping everyone but white straight Christian protestant men far from cultural and political power. It's easy to be cohesive when everyone looks, acts and thinks like you, and when the white establishment controls the media and sets cultural norms. Not that I'm advocating for a return to this at all - there are examples outside of the US where multiculturalism works. It just seems to be the case that the US has never really been comfortable living by its principles.

And this is one part of society's ills that I will kind of blame on social media, although not in the way you and a lot of HN people intend. I think a lot of the strife in our modern society comes not from social media algorithms driving outrage so much as other groups simply being able to gain visibility as the centralized media establishment gave way to the far less centralized structure of the web. To people who have grown up their entire life with only rare, token (and often stereotyped) representation of other races, religions and orientations, equality can seem like oppression.

But I do think that blaming social media is kind of a copout, because the argument tends to be that people are being manipulated and controlled by an addiction or a form of mind control, as if they don't have agency or free will. A lot of the discourse around social media right now seems to use the same hyperbole that one might have seen during the Satanic Panic, or any number of previous social panics. But I don't think social media is the problem per se (nor do I think regulating social media would be an effective solution.) I think the problem is what social media exposes in society - exposes, not creates. That's a far more difficult problem to solve because it means reconciling with some deeply systemic issues that a lot of people still don't even want to admit exist.

Remove "social" from media. It's just media. Books, film, radio, TV, video games, social media.

Not all, but a good proportion of each of these forms of media.

I've arrived at the opposite conclusion. The root cause of conflict is decentralized power, which is the prediction of realism. Conflict occurs because of security competition, but security competition is only possible when powers are equally matched and trapped in a Prisoner's Dilemma dynamic.

You can sense check this by running through various historic eras. Consider the eras before any nation states, when power was at its most decentralized. That was also when conflict deaths were at their peak due to tribal warfare.

Then move on to the era of kingdoms and then nation-states, and conflict deaths decrease because power centralization increases. Intra-national conflict goes to zero because of a monopoly on violence over that local geography, leaving only inter-national conflict in the structurally anarchic power vacuum.

The peace of the 90s was because the United States was completely dominant and had no reason to do anything because it controlled everything. As the United States declines and power decentralization increases, moves such as denying China access to oil from Venezuela become actions that are deemed necessary in the new security environment. Or a clash between Thailand and Cambodia becomes a thing that can happen, because there is an absence of a big dog to lay down the law, as unjust as that law may be.

The analogy would be a country with multiple privately owned police forces and no single power. You're going to get conflict. It's a structural phenomenon of how power vacuums work when you plop humans inside of them, and it has nothing to do with morality or markets.

In the last 100 years, we managed to prove that cooperation beats competition.

Of course we do have competition, but where it has worked the best, it has been done in the context of cooperation, economic trade that follows norms and laws.

Too bad we gave stupid people power.

This is the liberal view of security, yes, but in my opinion it's naive and it lacks explanatory power, for the reasons I gave in my previous post.

But for example, Venezuelan oil is worth very little to China. It's literally stupid to use violence to prevent them from accessing it.

Meanwhile it's sort of becoming very clear that Venezuela is about Cuba.

It's worth little at its current flows, but this ignores the temporal dimension which is where stock is more important because the flows can be built up over time. Only 20%-30% of China's oil is secure, the rest suffers from the Malacca dilemma which is why the US focuses on naval power projection as part of its Pacific containment policy, a lesson they learned with the oil blockade against Japan in WW2.

Oil is also not the only security dimension, the other dimension is to deny China a physical staging ground near to US territory for air, missiles or radar and SIGINT. Not a problem right now, but again these calculations need to involve the temporal dimension. If you believe there's a 25% chance of conflict over Taiwan, using the status quo of peace to justify decision-making is an "assume the best" doctrine which is a terrible security doctrine.

This isn't to say that security calculations are the only factor involved in this Venezuela operation. It is one piece of it. It's also somewhat besides the point because I am discussing underlying causal mechanisms, not fixating on a specific conflict.

As for how this relates to those mechanisms: the only reason these "security calculations" are even considered is because the US no longer holds a monopoly on world power. In the 1990s, it was a foregone conclusion. In that security, "cooperation" could occur. Then liberals osberve that cooperation and mistake it as the cause, when it's really the effect.

The specifics do matter if your argument is that some actions are a complex response to something and then the specifics are that the actions are stupid and nearly random.

This is an excellent counterargument. I was stumped for a bit until I noticed that your argument introduces a new variable that changes the equation: number of conflict deaths. Theoretically, it is possible to have a system of perfect enslavement where the number of conflict deaths are zero. But in such a system, low conflict deaths are a poor proxy to quality of life.

The basis of this is flawed because the "peace" started several decades before the 90s, and completely neglects the role of Mutually Assured Destruction in creating that peace. If anything, America's position was detrimental to that peace because it allowed it to wage its own unilateral wars.

This continues to be the case now. The main difference is that in the 90s, the opposition to Vietnam was still fresh enough in the average American mind. I suspect what we're seeing now is the effect of that memory fading.

I had similar thoughts, and my conclusion is that competition is an inherently unstable state of affairs: at some point somebody wins, and they will try very hard to prevent any further competitors from arising.

Indeed, competition is undesirable for all participants involved: everybody wants to win and exploit the rest for their own gain. Note that this is the only way to make competition work and result in its temporary benefits (if nobody wants to win, nobody will compete).

So there must be a system to keep the competition going and preventing the rise of a definitive and exploitative winner, and the existence of this system has to be accepted by the competitors. But why would serious competitors accept a system that prevents them from winning?

Monopolies are unstable (too). They just last for an annoyingly long time.

I mean, not really? They don't decay naturally, all the ones I can think of had to be manually dismantled through State interventions.

This is a really interesting take, I've been thinking very similarly.

I think there's a tendency to think of 'free markets' as having a lot more scope than they do - almost no countries allow free markets to determine the flow of people and restrict who can enter the country in some way. Similarly, nobody suggests the free market is a good way to regulate child labor.[0]

Especially in the US, there's a been a rapid erosion of other power structures like democracy, law, unions, etc that might serve as checks or balances against raw material interest. I think 'capitalism' often gets misclassified as 'pure competition', but it's probably better thought of as 'pure competition through regulated trade'. Pure competition, with no regulations to define a market, sounds more to me like what predated the industrial revolution (something more along the lines of feudalism)

[0] I took both these example from Ha-Joon Chang's Economics a Users Guide.

Perhaps we need the equivalent of the concept of anti-monopoly regulations on an international scale.

Who on earth is going to police and enforce this? The UN? At this point they are just performative theatre.

When I was young, back in school, I asked my teacher why the main purpose of a company is to grow. Their response was: "Because it has to be."

I don't think we need unlimited growth. Or, better: We CANNOT have unlimited growth, because there is a natural limit to the resources that are available. We, as a society, should do better than this. And that is what worries me: The sheer ignorance (or unawareness?) people have about their surroundings. I'm not sure if it is malicious, or just a coping strategy. But instead of looking into the real cause that lead to certain events, be it the environment, economical or political, people quickly blame minorities for all the bad that is happening, breastfed by the narrative that people like to repeat over and over again - "because it has always been like that".

For the longest time, I tried to counterargue and explain, why certain things are the way they are, and offered another perspective. But ears have become deaf, more than before.

I'm tired.

Well, a company has to grow. If it doesn't, it'll be devoured by those who do and show pleasing YoY metrics to their shareholders and prospective investors. Simply imagine you are an investor. Which company would you put your money in? And since the world is limited a company cannot afford not growing if it wants to survive. Government regulation is impossible, because there are other governments which happily let their companies to grow and outcompete foreign companies.

Maybe that very shareholder market is the problem.

Companies don't need to have shareholders.

* But plants need electrolytes to grow?! It's what they crave! *

Yup, markets need regulation.

So the only solution to this current manufactured political clown shitshow is a one world government, which is exactly the goal of the scenarists behind it.

We'll see much worse chapters of this shitshow before the last spectator admits the fallacy of dismissing this as a conspiracy theory.

There's capitalism and then there's communism. Both have proven to not work which leaves us with...

Countries are bad but even the sci-fi authors know the only way to change this is literally an alien invasion. Until then, instead of expecting good from our governments (wherever we live) shouldn't we just assume the worst and go from there? Since switching to that mentality life has been much more pleasant personally.

Always has been. Big powers have always been meddling in other nations.

"The strong do what they can, and the weak suffer what they must" Thucydides

Sure, the Melian order of the world is something one could consider as always there. Still, how much of Thucydides still applies when cheap drones, nuclear MAD, and environmental tragedy-of-the-commons are taken into account?

https://www.rand.org/pubs/commentary/2025/04/the-realists-gr... ...

True, but after this led to the disasters of WW1 and WW2, there was a genuine international effort to constrain it. Of course, it was a deeply imperfect system, especially with the cold war going on, but it was still an improvement on the naked imperialism and genocide that preceded it. Unfortunately, it appears we're rapidly regressing to the former situation, except this time with atomic weapons.

The vast majority of people aren't empathetic enough to learn from experiences they didn't live through themselves. Yet I'm still surprised that the death of the living memory of WW1 and WW2 would take effect this quickly.

The problem is that people aren't effectively taught about the lead up to these wars as much as they are of what happened during them. At least that was my experience when I was taught about them in class.

People don't have a proper reference point of what is currently happening. Once a war starts it is already too late.

I am in the exact same camp. My belief in free markets has been completely shattered and my political stance on several subjects has changed dramatically over the last years.

I no longer believe in the free market at all.

Of course this isn't the result of a single isolated event. Our lives are poems that constantly re-write and scrutinize themselves after all, like living ink that breathes new pages anew. But if I had to pinpoint one very specific period with a very measurable effect on my position it was the whole Elon Musk saga (DOGE+"heart salute"). A lunatic billionaire seemingly doing what he wants, rewriting narratives, making up facts, history, and saying things which were so evidently false, and showing up next to a president as if he were himself president, never having been elected, was shocking.

I used to really believe that "money followed what was good for society". There would be outliers and some noise, but overall these would be well correlated. I now look back and wonder how absolutely naive of me that was. Billionaires should not be allowed. They are a disgrace to the system. It's actually vile and disgusting to have them in our society.

I'm not an american and I used to dream of going to the USA, perhaps even living there. I now want to stay as far away from it as possible, and view the supposed american dream as either a past reality or effective propaganda I bought into previously. Maybe that's better for america and it's what they need to grow, who knows.

If anything it is crisis of elites in US. Since the second world war US has held dominant hand over its subjects (most of the world). But the elites were always smart enough to hide the amount of power, they marketed US well and understand to negotiate somewhat fairly and give some scraps to the rest (allow creating some elites in other countries). It was a straightforward deal.

But now the elites in US are just not very smart or savvy. Introduction of the tech class that are people who simply won a lottery (or scammed their way up) and are otherwise absolutely arrogant and clueless about the world. The deal just can't work anymore. It can't work because there is no deal with someone who thinks they deserve everything. The balance is off and you are now dealing with children with golden toilets OR self mythologizing guys whos deepest political analysis come from few scifi books they've read 20 years ago.

>The events of the past 12 months, culminating in Venezuela and now Greenland, has made me reevaluate a lot of my beliefs about unimpeded competition between free agents (i.e. a free market) leading to the best and most peaceful outcomes.

What have markets got to do with it? For as long as humans have been recording history, states have been annexing weaker states, regardless of economic system. It's absurd to blame free markets for this.

They led to the rise of powerful oligarchs who now very obviously steer the country (and the world) in a violent direction that I don't believe benefits many, except themselves of course.

> The way I've tried to reconcile my beliefs with what are

Why are you doing this "effort" to alienate yourself in place of blaming the country and government responsible for this?

Because I believe that causes of events are other events, and not objects. To blame an event (or a series of events) on a person (or a group of people) is a premature causality sink (e.g. "Why did X do evil thing? Because X is an evil person" -- this is not an explanation, it just puts an end to rational inquiry).

Stephen Miller's very recent Jake Tapper CNN interview adds evidence to the argument POWER is king and LAW is nowhere near as important.. to his .. ahem .. the Trump administration.

So, it'll continue to be reality, for as long as Trumpism reigns in USA.