Im loosing faith in Capitalism

[Adam Smith]

The More Things Change....

I don't have time to get into this discussion (for the 14th time), so here's a few quick comments...

Strates:
A quick search of my electronic copy of Wealth of Nations finds the word "monopoly" appearing four times in one chapter alone. (Book IV, Chapter 6) Perhaps you don't remember that chapter from your reading? (PS: welcome to Off Topic )

Strates (again):

Now, Smith's "invisble hand" it simply dosen't exists. You would need very informed buyers and supplyiers for the laws of supply and demand to actually take effect the way Smith predicted.

The US dollar has been declining the last few weeks, making US grain cheaper relative to other world suppliers. This morning on the way to work I saw three trainloads of grain headed to Baltimore for export. I wonder how they got there?

jdjdjd:
Even oligopolies compete. Take the US automobile market. In 1970 the big three domestic producers made crap cars and had virtually the entire market. Over time Toyota, Honda, and Nissan entered and took market sahre from domestic producers. Domestic producers increased quality in order to compete.

Chegitz:
The degree of redundancy, if any, depends on the production and distribution conditions of the industry. Economists generally consider oligopoly more efficient than monopoly because oligopolists will come closer to the competitive price than a monopolist will. If oligopolists produce identical products and have large productive capacity, the price they charge will nearly equal the competitive price.

[chequita guevara]

Adam Smith, we're using two different meaning for efficient. You're meaning efficient as far as markets are concerned, I'm meaning efficient as far as profits are concerned.

Oligopolists who create trusts don't compete with each other, but limit production and raise prices. I might be getting trust and cartel mixed up again, though. OPEC is an example of what I mean (though much weaker than in its heyday).

[Ned]

Well, CG, et al., we do have the anti-trust laws which broke up Standard Oil, AT&T and potentially Microsoft, and forced the Wright Bros., Xerox and IBM to license its patents. Conspiring amoung companies to fix prices or divide markets is nortiously against the anti-trus laws.

Where are there legal monopolies or oligopolies in the United States?

[chequita guevara]

It is now, Ned but it wasn't always. The reason is because trusts, cartels, and monopolies distort the market and take profits away from other capitalists. Their treatment of consumer and worker also threaten the existence of capitalism by making people like me seem like we have a reasonable argument.

We still have oligopolies. Prices aren't fixed by direct collusion, but rather by matching your competitors. Price wars, which are common in a market with many sellers, are largely a thing of the past. Competition in an oligopolistic market takes place via advertising.

[Strates]

Re: The More Things Change....

Originally posted by Adam Smith
I don't have time to get into this discussion (for the 14th time), so here's a few quick comments...

Strates:
A quick search of my electronic copy of Wealth of Nations finds the word "monopoly" appearing four times in one chapter alone. (Book IV, Chapter 6) Perhaps you don't remember that chapter from your reading? (PS: welcome to Off Topic )

Strates (again):
The US dollar has been declining the last few weeks, making US grain cheaper relative to other world suppliers. This morning on the way to work I saw three trainloads of grain headed to Baltimore for export. I wonder how they got there?

I know Smith metions the word "monopoly", but it was Marx who really gave us an analysis on monopolies and the capitalistic system.