If this were to happen, your wage would likely drop to, say, $50/month. Maybe less. Putting Americans out of work is also putting lower paid people from other countries to work at higher pay than they might otherwise get in their own countries. From your perspective (having to take a big pay cut or losing your job) it's bad, from theirs it's good. So who's right? In a zero sum game, when you lose, someone else wins.
This is a good point. We all want high pay. But how often do we ask ourselves whether we really deserve it. What is so inherently difficult about coding? Nothing. It *is* fairly easy especially after you've spent a few years doing it everyday.
Of course, this does not really apply to "engineering" which usually implies design work. Designing a "machine" or "system" of any kind takes a great deal of thought. It is not easy in the way that programming often is.
In any case, what all Americans (with half a brain) have feared seems to be gradually happening. Residents of most first world countries, especially Americans, are simply overpaid. This includes everyone from the employees at Walmart, to the building trades, to techs and engineers, and certainly to managers and CEOs etc. We are all making more money than is justified by the world economy.
So some of the chickens are coming home to roost. I don't like to see this because I live in the US, and like being able to make more than the $12.00 a month that the average Cuban makes, but from a world perspective it is progress. It does seem like a zero sum game, and perhaps it is for now. Our loss is the gain of people in other countries who can barely imagine our lifestyles.
Is it fair? I don't know. Should a mere accident of birth justify our living so much better than someone born in, say, Laos? Lots of ethical questions here.
I'm working on building a house. For relatively simple carpentry stuff, who do you think I'd rather use, some experienced carpenter who demands $60/hour (or more) to do what is basically easy physical labor, or an illegal immigrant who may not speak English, but who can handle a hammer almost as well and who will be happy with just $6.00/hour? Who am I hurting and who am I helping? What is "fair"? Is the immigrant any less of a person? Why should he be denied a job for much less money, so that the American fat cat can live in style (by comparison)?
I think we (Americans and other "first-worlders") have all been standing on very thin ice for a long time without realizing it. Spring is coming, and we are starting to see the cracks around our feet. So the question is not "how could we have prevented this?" or even "how cold is the water?", but "can I swim?".
Could any of us survive on less than $20/month? I don't think so. But, in the end, that's what we're competing with. It's easy forget. The "third world" seems like a different world, one not related to us. But the people who live there are just the same as us, just as smart, just as able.
Only an accident of birth makes them poor and us rich. The unfortunate truth is that in the "world economy", the suppply of labor *vastly* exceeds the demand. Without national borders, the average wage might be $1.00 a day or less.
Wouldn't this analysis be the same for virtually any career? The only alternative is always having a really boring job. At least with a CS/EE/ME... degree, you have a shot at getting an interesting job.
It's not about money, because plumbers make more than most engineers and programmers. It's about doing what you like to do. Period. All this talk about "strategic" career selection is ridiculous. If you like coding or engineering you really have no choice. You're stuck. Or maybe you could get a plumbing license as a backup:).
Those of us who happen to like this sort of thing are actually lucky, because the world seems to have some use for these kinds of skills, even if there is not enough demand to keep all of us employed in our fields for our entire lives.
This doesn't surprise me. I was in Helsinki (in the summer thank god) and not only was it a beautiful city, but the people seemed the friendliest, most polite group of sentient creatures I've ever encountered. In Finland, people really seem to care about others. It's hard to believe Finland is so close to Russia. But then I was only there for a short time so what do I know.
I think your analysis is off BTW. The US also has had cell phones for many years, but people here simply don't care if they are bothering others. Not only will they let their cell phones ring but they'll actually answer them in the middle of a movie and talk, while placing one dirty boot on top of the shoulder of the person in front of them while the other boot is simultaneously kicked against the back of the seat. This is in addition to people talking at full volume whenever they want to make a comment about the ongoing movie. Perhaps they want to make sure everyone hears them. Every man for himself.
Well, killing James Cameron is obviously not going to work. The studio has already thought of that one and has taken pre-emptive measures. OTOH, T4 could be great if the studios cared even a little about something other than $$$$. The term "Independent film" is redundant. What hollywood spews out is nothing more than a bunch of 2 hour long trailers. Expect to see the original good idea mutilated even more in the name of profits. Nothing good can come of this.
I'd be happy for a terminator 2 but without the kid actors. The kid playing John Connor really sucked. His bad acting (and his stupid lines) ruined the movie for me. So much so that I didn't even buy the laserdisc when I saw it for $5.00. OTOH Terminator 1 was a masterpiece. I still have the laserdisc, although it's not the THX version.
So a remake of T2 is totally fine by me. I just hope they don't try to give the hot 22 yr old model babe any lines because she's clearly a model, not an actress. Hopefully, as with Species, she won't be able to talk:).
Having said that, this director sucks, and there's no way that the director of U-571 and Breakdown is going to be able to make this work.
It will make lots of money though, and that's all the studios need to know. If James Cameron, or Ridley Scott, or an equivalent Sci-fi/Action director is not willing to do it, then IT SHOULDN'T BE MADE.
I genuinely attribute these decisions directly to the cynicism of the studio execs. They're not even *pretending* to care anymore. They know people will see the movie no matter what they do and no matter what the critics say about it. And they're right.
But couldn't your description apply to any hollywood movie? They all seem to have "sad parts, happy parts, tense parts, release/comedic parts". How is this different? I thought Heavenly Creatures was a passably good movie, but I fail to see the appeal of this. Seems marketed towards children, kind of like Star Wars.
Why, oh why don't I ever have mod points when I *really* need them. This is great. A bit OTT, but great. Children don't know anything about anything and are easily brainwashed by even the most feeble attempts. Luckily they also have short attention spans. They should be punished for having such bad taste. Teach them why Britney is bad.
The amount of brain-washing that is constantly going on on children's TV is simply staggering. These media giants are mainlining their messages right into those little brains. Watching them trance out in front of that TV is really interesting from an anthropological POV. Parents like it because it shuts the kids up completely, stops them from running around like monkeys, but it turns them all into these little consumer-citizen zombies...
But if everyone stopped buying CDs from RIAA labels, it would put the RIAA out of business eventually. At least they wouldn't be able to afford the political donations, lobbyists, and lawyers that give them their power. Without all their money, they would be effectively neutered. Of course, Slashdot readers are far from being everyone. It wouldn't be enough.
One of my favorite artists just released their new CD without a label. They were signed previously to labels. Their older CDs are still available on Amazon. But this particular guy is obviously rejecting the system. He sells his CDs directly through a website that specializes in exactly this kind of thing. The website claims that the artist gets to keep "most" of the money from their CDs with a "weekly check":).
His stuff is sufficiently obscure apparently that you can't even find it on p2p now that Audio Galaxy is gone. If more artists would do this we wouldn't have the RIAA to complain about for much longer.
It's the label that you're screwing over, not the artist. The artist doesn't usually even own those songs you've downloaded anymore. That he created them is irrelevant. He sold them to a record company in the hopes of large sums of money (from millions of $1 royalties I guess). He did this in the belief that getting signed to a label was the only way to produce music as a "day job", and that might even have been true as little as 5 years ago...
We didn't fsck the "music industry". The internet did. Its very existence makes them redundant.
You mean you actually read his reviews? He's always been famous for liking every movie he sees. Didn't he give Congo a half-decent review? OTOH, he writes pretty well about the movies that, by coincidence, are geniunely good.
Except that it's not that simple. There is something particularly gruesome about this sort of thing. It reminds me of a Larry Fessenden movie called "No Telling", which played on IFC for quite a while. It kind of plays like a propoganda movie for animal rights activists, but it's *very* effective.
In the film, a scientist attempts to sort of create an electric dog. It's real graphic. I could barely watch it, but I'll never think of animal experimentation the same way again. It's billed as a horror movie, and indeed I don't think I could ever really get the image of that semi-mechanical dog trying to walk out of my head.
Fessenden has a number of axes to grind in the film, animal experimentation being only one of them, but it's the most prominent. After watching that film, I no longer no where I stand on this issue. Having said that, I hate all rats and would like to see them become extinct. Turning them into automations is a bit too gruesome for my taste though.
This is a good point. Most scientific progress comes in leaps. At some point the steady, incremental progress made by CPU manufacturers has to end. It will end when they need a fundamental breakthrough in technology to continue. Once that barrier is reached it's all just tweaking and optimizing.
If you look at the gradual improvements in hard drive speed over the years, I think you'll see what may be the future of CPUs. At some point a 10% increase in speed may be regarded as huge.
I think you're missing the point here. The processor is no longer the bottleneck in the majority of cutting edge games. Just look at the latest benchmarks at Tomshardware or Anandtech and you'll see that when benchmarking CPUs they always need to drop down to like 1024x768 to see any differences. At 32bit 1600x1200 or higher, you can many times halve the processor speed without a noticeable drop in FPS.
In the days when software rendering was the norm, the CPU was the bottleneck, but those days are nearly over. From a gaming perspective upgrading your graphics card is always priority one. Only once you have the fastest, absolute state of the art Nvidia or ATI monster should you worry about your CPU. What modern gamers drool over is not the latest CPU, but the latest GPU.
It's also good for software developers. I don't personally work as a coder, but when I see a 1 day old game, that took 3 to 5 years to make, available for free download on P2P, I cringe. Of course, first I download a copy for myself, and then I cringe. [If the game is truly good and/or I'm a fan of the developers, I will buy one of their pretty boxes. But it sits unopened:)] It makes me wonder how long these developers can stay in business. OTOH this scenario is a bit too Orwellian for my taste.
It's great that you are recommending a nice wholesome Microsoft product in the Xbox, but your eulogy is premature, and in fact, the current or near future versions will never take over the game world. Why? Because a very large percentage of gamers are not children. Many are even over 30 and already have high end computers and can afford the latest Nvidia or ATI GPUs.
There is no need for a dedicated gaming box, and even if there were, the current crop of products are wholly inadequate. For the games I like to play I need a full size qwerty keyboard, a mouse, and a large, 1600x1200 or greater resolution monitor. A TV screen and a game controller are not going to cut it.
Also, I want control over my display options. There are somewhat affordable stereo (3D) monitors now, and some 21" monitors have high enough scanning rates to allow the use of shutter glasses with Direct3D or OpenGL universal stereoscopic drivers. Most high end virtual reality equipment like HMDs and head trackers are made to be compatible with PCs, not with consoles.
Note also that Black Isle Studios (Interplay), Bethesda Softworks, Bioware, Lionhead Studios, Arkane Studios, most MMORPG teams, and most other promising developement teams are primarily creating for the PC market. Have fun playing your simplistic arcade games, this years remake of Donkey Kong, Pac Man, and Space Invaders. I'll continue to rely on my Turing machine to accomplish the task of gaming or whatever else I want to do, including writing code and developing my own games.
The only console game I've ever wished I could play was Godzilla on the Dreamcast. It got bad reviews, but any remake of Crush Crumble and Chomp is a game I want to spend some time with.
Exactly. Finally someone who can think. All of these people afraid that "grey goo" is going to take over the world, to destroy all life, to do what nuclear fusion bombs failed to do, are thinking science fiction, not reality. The idea that human beings can, in a very short time, go from making little or no significant progress in building tiny self-replicating robots to all of a sudden creating something "dangerous" is laughably ridiculous. I highly doubt our ability to create self-replicating machines of any type or size (that are not in fact biological) well enough for them to be dangerous to us, even in the next 500 years.
We're in the new millenium, but I don't see:
1. Ray guns, phasers, any kind of practical handheld weapon that isn't a firearm, even though laser technology has been around since the 60s.
2. Intelligent computers or robots, that can learn, think, and talk, although we do now have robots that can walk like us. The Turing test is over-rated, but I haven't seen any computers passing it in the sense that it was intended. Computer technology has been around since before the 60s. It has just gotten faster and smaller.
3. Flying cars or any kind of fundamental changes in our transportation machines. No fundamentally new technology at all. And, no, airbags and GPS navigation systems don't count.
4. Space Exploration or space colonization. Don't make me laugh. We are so far from this. We can't even make it to the moon without it being some major, expensive project. No progress here either. And, wow, rockets and spacecraft propulsion has been around since before the 60s. We had rockets in WW2.
5. Biological stuff: anything that can kill a virus without killing the host or the equivalent of what the discovery of antibiotics did with bacteria, a cure for cancer, cures for a zillion or so other diseases. We've been working on this stuff since forever, and our progress is barely measurable.
Either these are hard problems or we are very stupid or both. So, no, I don't see any danger that we are going to be overtaken by super-intelligent, microscopic, self-replicating, mechanical robots in our lifetimes. I would have to agree.
Give us another few hundred years at the very least. This discussion is like hearing people in Leonardo Da Vinci's time worrying about helicopters, how they're so dangerous, and we had better pass some laws before they are all over the place and someone gets hurt.
Do you realize how incredibly difficult any even remotely interesting science is to do? Sufficiently advanced technology may be indistinguishable from magic, but there is no magic in creating it. It is very slow, very hard work, which consists of blind alley after blind alley and much forehead pounding.
I blame popular science writers for these kinds of attitudes. If you look at the number of fundamental scientific breakthroughs that mankind has made in the past century it's really quite pathetic.
The truth is that scientific progress is SLOW. So slow that you should have many years to ponder these ideas. In 50 years, maybe you can start to worry about such things, although it's probably more like 500 years.
So I propose that we consider passing such regulations around the year 2503. By then there might be a need for it. Send me an email in another 1200 years when our world resembles the one from Blade Runner. Until then I'll be in cryogenic suspension waiting for humans to realize that we're not nearly as smart as we think we are. I think some people have been watching too many science fiction movies.
BTW, it's almost 2003, and I don't see a HAL 9000 computer anywhere. Another optomist. He should have titled the book 3001. It would have been more accurate. I think it's about time that we got over ourselves as a species. Hubris, not intelligence, seems to be our defining characteristic.
I think he'd better take a much needed vacation. I'm tired of hearing about crackers going to jail. The Falkland Islands are rather nice this time of year.
Good point. Won't the alleged (completely unproven) global warming effect stop when we run out of fossil fuels, or they become sufficiently scarce that their price makes alternative technologies (like burning the rest of the trees in our forests or lots of nuclear reactors) more practical? Perhaps one day all of our power sources will be nuclear (which will charge the batteries in our electric cars). All of this may happen even sooner if Sadaam sets fire to all of his oil wells again.
Your arguments are so jumbled and incorrect I don't even know where to begin. Please, open and READ an economics text before you try to comment on it.
I have Price Theory by David Friedman sitting here in front of me. Section 3 chapter 10 does have a section called "Small Number Problems: Monopoly and all that". Section 6 has a chapter entitled "Why Should I Buy This Book". Perhaps I should start there.
Name a government enforced monopoly. Come on, show me one. Just one. No, I won't wait for it. The only type of monopoly enforced by the government is the age-old bane of/.: the patent. And that's not even enforced as a monopoly: patents can be licensed. Name another, I dare you.
Well, perhaps you should first name a "natural" monopoly, one that can exist without the government's assistance. But, ok, I'll give it a try. Most of my local utility companies, electric, cable television, cable internet, telephone, were monopolies in the recent past. This was legally enforced. These companies owned the rights to a particular geographical area almost like a patent. It was theirs and no one else was allowed to compete with them. There seems to have been some changes in this recently in that there is at least some competition in local services. Two companies service my area for all of these services except for electricity distribution. Other than that I can't think of any offhand. How about some examples of monopolies not created by the government (and without listing one person monopolies like artists, authors, or film directors, who create a potentially unique product)?
Guess what? THAT IS HOW A NATURAL MONOPOLY FORMS. It's called barrier of entry.
In theory. In practice it doesn't work because the theory is wrong. In the real world, a monopoly that acts like the monopoly from a microeconomics textbook (one which controls prices) must face at least the potential of competitors deciding that they want a piece of the action. With certain companies, merely the threat is enough to keep them in line. In the short run, they can control prices just like the textbooks say. In the longer term, however, they cannot, not without help.
The startup costs are the barrier.
This is absurd. Please explain how the first company managed to break this great barrier to entry in the first place. They were in the same situation as the second company and yet they somehow managed.
Once those wires have been paid for by one company, their cost curve drops drastically.
Just as it will for the second company, and the third, and so on. If anything the first company probably had to pay more, because material costs on things like telecommunications cable (i.e. fiber optics) tends to drop for a given capacity. This so called barrier is an illusion. There is more than one large corporation on this planet. Other companies can also afford large start up costs, especially when the profit potential has already been demonstrated by the first company.
Have a look at your cable and phone jacks, the ones that are connected directly to the poles or the underground network. How many do you have? Is there one labelled "AT&T" and one labelled "RCN?" I didn't think so. You can bet that one company (or government, even) owns those cables and the other is paying for their traffic to run on them.
Actually, due to misguided government regulations based on theories such as you cite from microeconomics, that is probably true in most places. Most "utilities" are given exclusive rights to a particular area by the government. The government makes it illegal for anyone to compete.
In my town there does seem to be an unusual situation. I actually do have some reason to believe that the newer utility has actually gone to the trouble of running their own lines instead of renting them. They even have their own telephone exchange. The exchange on my telephone number is unique to this company. The local baby bell does not use it. I have actually seen trucks from both cable companies physically running wire in my town. This would seem to imply duplicate wiring.
BS indeed. Read an economics textbook and see just how misguided most of the bullshit on this website really is.
Actually it's most of the textbooks that are misguided. Their mistake is in starting out with the premise that the government is a positive force and allowing that to guide their economic theories. Certainly a text too critical of the status quo is not going to make it onto too many college bookstore shelves. Is it just a coincidence that the ideal system implied by most of these textbooks is pretty much exactly what we have? You don't see too many textbooks with economic theories justifying marxist ideals, nor do you see many ones justifying pure free market, libertarian ideals. The writers work backward from their political beliefs. What do you think the textbooks from Soviet Russia looked like? I doubt if they devoted many chapters to Adam Smith, Ludwig Von Mises, Friedrich Hayek, or Milton Friedman.
A monopoly is not always bad, no matter what common sense or public opinion tells you.
To meet the definition of monopolies from common textbooks, it must be bad for the majority. But it depends on your perspective. Having control over prices is certainly good for the employees of the monopoly and their families, as well as any share holders. CEOs and other company officers with stock options will also be tickled pink. So the question should really be "bad for whom?".
Here's one that will blow your mind: It actually makes *more* sense for the government to tax necessities rather than luxuries.
This is like mentioning to an animal rights activist that decapitating a kitten is much more efficient than cutting off its legs and waiting for it to bleed to death. It may be true from the governments narrow perspective, but so what? Let's see if common sense works here. Necessities are "inelastic" so that prices can be raised to obscene levels and people will still buy them. This means that virtually everyone will purchase the good and thus everyone can be taxed.
Another one: A flat tax actually costs poor people more than rich people.
This depends on how you define "more". A flat tax is commonly thought to be regressive, meaning that it is supposed to penalize the poor more than the rich. This view is based on the assumption that $100 is worth more to a poor man than a rich one. In fact, because a flat tax is usually regarded as a percentage of either income or purchases, the rich man is taxed just as much (in reality much more) as the poor man, even if you believe the theory that money is worth less to the rich one. Some would still regard this as unfair. If taxes are merely a payment for government "services" and not protection money, then the rich are paying much more money for the same (or often less) services as the poor man. They are in fact being penalized because they are rich. This does not make sense to me. Of course, a "progressive" tax makes even less sense. [And, no, I'm not rich BTW and I don't like big corporations either]
The whole point of this discussion is that it is sometimes in the public interest for a monopoly to exist.
Well, this discussion certainly seems to raise that question. I would certainly argue that it is not in the public interest to create one on purpose.
In a pure competition, the firms do not have enough control over the market (they actually have no control) to set the price. They are price-takers and not price-makers. They see one price for their good or service and their only variable is cost. The more goods they provide, the higher their revenue.
You are creating an arbitrary category called a "pure competition". Its relevance in the real world is questionable at best.
In a monopoly, the firm has complete control over price. The firm is the market.
Yes, this is your argument, that such an entity can exist naturally. I admit that it can, but only temporarily or with government interference.
This firm sees the entire demand curve, not just the equilibrium point (the price at which buyers are willing to buy and sellers are willing to sell) as the firms in a pure competition do. This complete control over price means that the firm in a monopoly is free to set the price at whatever it chooses.
You could have skipped the microeconomic jargon because this is the whole point. A monopoly is supposed to be able to set the price at whatever point they want (and still sell products).
Bring able to set that price means that the firm can earn a pure profit (pure profit is defined as the profit over and above the break-even point; note that breaking even actually means covering all costs including wages). That price (and by definition, the supply of good/service in the market) is set such that the firm maximizes its revenue.
Yes, a government enforced monopoly has the ideal business climate. They can set the price high enough so that they maximize revenue. They can price the product right up to the point where too many people will stop buying it, but then drop it down exactly to the point where the greatest number of people pay the greatest amount. They can also have fun with price discrimination, attempting to charge higher prices to those who can afford them.
Of course, they can't do any of these things without the help of a government to prevent entry of other equally large or larger firms into the same, obviously profitable market. The more profitable it becomes the more they will attract competition.
The above paragraph is easier to understand graphically, so I will try to explain that graph. At the point where the marginal cost for a good (the extra cost for the next unit of a good) is equal to the marginal revenue earned from the sale of that good (which in the case of a monopoly is the same as the demand for the good), the firm is maximizing its resources. Move up the graph to the average revenue curve and you see that the average revenue at the MR=MC point is higher than the average total cost. This leads to pur profit. However, the monopolist can move that price back up the marginal revenue curve (which is equal to demand, remember) and finds that he makes even *more* profit by holding goods off the market.
Fascinating, but this will not occur in the real world in a free market. One of the biggest problems with neoclassical microeconomic theory is that it assumes a static world. They try to freeze the world while they make their assumptions. But in the real world everything is constantly changing. Even the rate of change is constantly changing in a difficult to predict manner. That's not to say that it doesn't work at all. It can be quite useful. But you cannot use these theories to prove anything else because they are, themselves, resting on the very thin ice of many arbitrary and largely false assumptions.
Now let's look at the situation where the good/service is what is called a public good. A public good is a good/service that benefits everyone. Once produced it cannot be taken back. An example of this is a lighthouse. The lighthouse benefits the oil tanker just as much as it benefits the small fishing boat. The light from the lighthouse cannot be taken back. You also cannot charge the fisherman a different price to use the lighthouse than you charge the oil tanker captain. That light is out there for both to use, and can't be shut off if the fisherman doesn't pay.
Actually, I believe that some early lighthouses were actually privately run. They earned revenue from docking fees at nearby ports etc. Of course, they still had to deal with the "free rider" problem, but they were able to run privately for some time regardless. However, unlike "natural" monopolies, I do believe that public goods actually exist. I don't, in all cases, believe that such goods are impossible to sell privately, but it certainly is more difficult.
In the past, highways have often been cited as a public good. Electronic Toll Collection has demonstrated, at least to me, that they are not really a public good. A private company could very easily be running these. Local roads are a different matter however. It is difficult to envision placing tolls on them, even electronic ones, although I suppose it is possible.
In reality, there are very few purely public goods.
Agreed. A national defense force, normally broadcast radio and television (including satellite except for the use of scrambling), local roads, local law enforcement are some examples that come to mind.
Most are a combination of public as well as private goods.
Huh? How is that possible. I thought that a good was either public or private. I've never heard that it can be both at the same time.
An example of this is electricity. It benefits everyone.
It doesn't benefit me very much if I don't pay my bill. I've had my electricity shut off on a number of occasions in my life, at which point I had to return to the technology of oil lamps in order to see at night. I think you are mistaken here. Electricity cannot possibly be a public good any more than an automobile can (their existence benefits everyone too).
Here's a definition from my economics textbook: "a good such that, if it is produced at all, the producer cannot control who gets it". Clearly electric utilities can quite easily control who gets it.
It is in the public interest to have electricity.
You mean for electricity to exist, as a technology? For it to be available for purchase? Clearly this is true, but it is also true of many other products (actually all other useful products) like computers, adhesives, airplanes, surgical instruments etc.
However, it is not in the public's interest for a monopoly to exist on the electricity supply. Or is it?
Not any more than any other industry. The same argument could be made for the pencil manufacturing industry, for instance. Electricity is just another commodity, a particularly easy one to control in fact. This would have been true even before the invention of meters since a flat rate system could have been implemented (similar to internet service providers).
Clearly we don't want the electric company to hold back its supply of electricity and only give it to those who can afford it.
I agree. I want some free electricity right now. It would be nice if my utility company would abstain from shutting off my power after not paying them for 6 months or so.
Everyone needs to have electricity.
And food and shoes and a place to live. I want to campaign on this platform: "Free electricity for everyone!"
Once company A lays wire and has covered the cost (no need to get into a discussion of amortization or depreciation here please) of that wire, it has dramatically lower costs than company b, which has to either lay its own wire or lease the wire from company a.
Come again? Can you explain to me in plain English why it would not cost company B exactly the same as company A to lay all that wire, especially if you assume that both are equally large companies? Why should it matter particularly who places the wire first? Why should it be some kind of race? Does it matter if company A beats company B by only a few hours, days, or years?
Once the cost curve has dropped below the demand curve (as it does for a public utility), the monopolist no longer has an incentive to hold goods off the market.
You are making an assertion here. Can you offer some evidence why the cost and demand curves for a "public utility" (define that please) should be any different from other suppliers of widgets? Would a manufacturer of outboard engines for example have the same situation? It seems to me that you are using those questionable theories of neoclassical microeconomics to support your assertions, but you must first argue for those questionable theories since I think they are overly simplistic and just plain wrong in many cases (because of the initial assumptions, not the internal logic).
The maximum profit can be made where the marginal cost = marginal revenue. So in this case the monopoly is no longer a bad thing.
It is still a bad thing (for the customers not the shareholders) because this mythical entity called "a natural monopoly" should theoretically be able to charge higher prices than if it had even one competitor). Of course, if you are a shareholder this would not seem like a bad thing at all.
Sure, the company can still charge whatever price it wants, but that is where regulation comes into play.
Well, regulations created this mess in the first place since such monopolies cannot exist for long in free markets unless they act as if they actually had competition, which would not agree with microeconomic theory, but which is possible. Perhaps some reverse regulation to prevent monopolies from raising prices too much would not be terribly destructive, at least in the short run. The problem is who decides what is "too much", and how. In most cases in the real world this is decided by corrupt politicians.
Seriously, do yourself a favor and pick up a book on economics.
Another one? I already have about 12 or so. However only 3 of them are traditional college textbooks. The rest are influenced by the Austrian, Neo-Austrian, or Chicago "schools" of economics. In other words, the kinds of books a Libertarian would own.
It will enlighten you to a great many things about the way the world works.
I'm sure it would. I spent most of my time when I took my Introduction to Microeconomics course (almost 15 years ago) arguing with the professor. She couldn't seem to offer much evidence for her many assumptions agreeing with the real world. The only way I was able to pass the course was by thinking of them as rather ludicrous assumptions without any merit in the real world.
Monopolies such as the phone company and cable company are because they have to create the infrastructure and multiple onfrstructures would be counterproductive.
Says who? Who decides what is "counterproductive"? You? Some politician who knows nothing about telecommunications? Some biased company lobbyist who only cares about profits? If you're so confident that it's "counterproductive", then let the market decide. Does the idea of having more than one wire in the ground bother you so much? If so, what about the idea of multiple automobile factories or multiple cell phone networks?
The fact is that the company who lays the wires first has no particular advantage over the one who lays them second or third. The startup costs are the same. Are you concerned about taking up too much space in the ground?
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If this were to happen, your wage would likely drop to, say, $50/month. Maybe less. Putting Americans out of work is also putting lower paid people from other countries to work at higher pay than they might otherwise get in their own countries. From your perspective (having to take a big pay cut or losing your job) it's bad, from theirs it's good. So who's right? In a zero sum game, when you lose, someone else wins.
This is a good point. We all want high pay. But how often do we ask ourselves whether we really deserve it. What is so inherently difficult about coding? Nothing. It *is* fairly easy especially after you've spent a few years doing it everyday.
Of course, this does not really apply to "engineering" which usually implies design work. Designing a "machine" or "system" of any kind takes a great deal of thought. It is not easy in the way that programming often is.
In any case, what all Americans (with half a brain) have feared seems to be gradually happening. Residents of most first world countries, especially Americans, are simply overpaid. This includes everyone from the employees at Walmart, to the building trades, to techs and engineers, and certainly to managers and CEOs etc. We are all making more money than is justified by the world economy.
So some of the chickens are coming home to roost. I don't like to see this because I live in the US, and like being able to make more than the $12.00 a month that the average Cuban makes, but from a world perspective it is progress. It does seem like a zero sum game, and perhaps it is for now. Our loss is the gain of people in other countries who can barely imagine our lifestyles.
Is it fair? I don't know. Should a mere accident of birth justify our living so much better than someone born in, say, Laos? Lots of ethical questions here.
I'm working on building a house. For relatively simple carpentry stuff, who do you think I'd rather use, some experienced carpenter who demands $60/hour (or more) to do what is basically easy physical labor, or an illegal immigrant who may not speak English, but who can handle a hammer almost as well and who will be happy with just $6.00/hour? Who am I hurting and who am I helping? What is "fair"? Is the immigrant any less of a person? Why should he be denied a job for much less money, so that the American fat cat can live in style (by comparison)?
I think we (Americans and other "first-worlders") have all been standing on very thin ice for a long time without realizing it. Spring is coming, and we are starting to see the cracks around our feet. So the question is not "how could we have prevented this?" or even "how cold is the water?", but "can I swim?".
Could any of us survive on less than $20/month? I don't think so. But, in the end, that's what we're competing with. It's easy forget. The "third world" seems like a different world, one not related to us. But the people who live there are just the same as us, just as smart, just as able.
Only an accident of birth makes them poor and us rich. The unfortunate truth is that in the "world economy", the suppply of labor *vastly* exceeds the demand. Without national borders, the average wage might be $1.00 a day or less.
Wouldn't this analysis be the same for virtually any career? The only alternative is always having a really boring job. At least with a CS/EE/ME... degree, you have a shot at getting an interesting job.
:).
It's not about money, because plumbers make more than most engineers and programmers. It's about doing what you like to do. Period. All this talk about "strategic" career selection is ridiculous. If you like coding or engineering you really have no choice. You're stuck. Or maybe you could get a plumbing license as a backup
Those of us who happen to like this sort of thing are actually lucky, because the world seems to have some use for these kinds of skills, even if there is not enough demand to keep all of us employed in our fields for our entire lives.
Maybe that was "or best offer". Offer the guy $20.00 for one of his ridiculous watches and he just might take it.
This doesn't surprise me. I was in Helsinki (in the summer thank god) and not only was it a beautiful city, but the people seemed the friendliest, most polite group of sentient creatures I've ever encountered. In Finland, people really seem to care about others. It's hard to believe Finland is so close to Russia. But then I was only there for a short time so what do I know.
I think your analysis is off BTW. The US also has had cell phones for many years, but people here simply don't care if they are bothering others. Not only will they let their cell phones ring but they'll actually answer them in the middle of a movie and talk, while placing one dirty boot on top of the shoulder of the person in front of them while the other boot is simultaneously kicked against the back of the seat. This is in addition to people talking at full volume whenever they want to make a comment about the ongoing movie. Perhaps they want to make sure everyone hears them. Every man for himself.
Well, killing James Cameron is obviously not going to work. The studio has already thought of that one and has taken pre-emptive measures. OTOH, T4 could be great if the studios cared even a little about something other than $$$$. The term "Independent film" is redundant. What hollywood spews out is nothing more than a bunch of 2 hour long trailers. Expect to see the original good idea mutilated even more in the name of profits. Nothing good can come of this.
I'd be happy for a terminator 2 but without the kid actors. The kid playing John Connor really sucked. His bad acting (and his stupid lines) ruined the movie for me. So much so that I didn't even buy the laserdisc when I saw it for $5.00. OTOH Terminator 1 was a masterpiece. I still have the laserdisc, although it's not the THX version.
:).
So a remake of T2 is totally fine by me. I just hope they don't try to give the hot 22 yr old model babe any lines because she's clearly a model, not an actress. Hopefully, as with Species, she won't be able to talk
Having said that, this director sucks, and there's no way that the director of U-571 and Breakdown is going to be able to make this work.
It will make lots of money though, and that's all the studios need to know. If James Cameron, or Ridley Scott, or an equivalent Sci-fi/Action director is not willing to do it, then IT SHOULDN'T BE MADE.
I genuinely attribute these decisions directly to the cynicism of the studio execs. They're not even *pretending* to care anymore. They know people will see the movie no matter what they do and no matter what the critics say about it. And they're right.
But couldn't your description apply to any hollywood movie? They all seem to have "sad parts, happy parts, tense parts, release/comedic parts". How is this different? I thought Heavenly Creatures was a passably good movie, but I fail to see the appeal of this. Seems marketed towards children, kind of like Star Wars.
Why, oh why don't I ever have mod points when I *really* need them. This is great. A bit OTT, but great. Children don't know anything about anything and are easily brainwashed by even the most feeble attempts. Luckily they also have short attention spans. They should be punished for having such bad taste. Teach them why Britney is bad.
The amount of brain-washing that is constantly going on on children's TV is simply staggering. These media giants are mainlining their messages right into those little brains. Watching them trance out in front of that TV is really interesting from an anthropological POV. Parents like it because it shuts the kids up completely, stops them from running around like monkeys, but it turns them all into these little consumer-citizen zombies...
But if everyone stopped buying CDs from RIAA labels, it would put the RIAA out of business eventually. At least they wouldn't be able to afford the political donations, lobbyists, and lawyers that give them their power. Without all their money, they would be effectively neutered. Of course, Slashdot readers are far from being everyone. It wouldn't be enough.
One of my favorite artists just released their new CD without a label. They were signed previously to labels. Their older CDs are still available on Amazon. But this particular guy is obviously rejecting the system. He sells his CDs directly through a website that specializes in exactly this kind of thing. The website claims that the artist gets to keep "most" of the money from their CDs with a "weekly check" :).
His stuff is sufficiently obscure apparently that you can't even find it on p2p now that Audio Galaxy is gone. If more artists would do this we wouldn't have the RIAA to complain about for much longer.
It's the label that you're screwing over, not the artist. The artist doesn't usually even own those songs you've downloaded anymore. That he created them is irrelevant. He sold them to a record company in the hopes of large sums of money (from millions of $1 royalties I guess). He did this in the belief that getting signed to a label was the only way to produce music as a "day job", and that might even have been true as little as 5 years ago...
We didn't fsck the "music industry". The internet did. Its very existence makes them redundant.
You mean you actually read his reviews? He's always been famous for liking every movie he sees. Didn't he give Congo a half-decent review? OTOH, he writes pretty well about the movies that, by coincidence, are geniunely good.
Except that it's not that simple. There is something particularly gruesome about this sort of thing. It reminds me of a Larry Fessenden movie called "No Telling", which played on IFC for quite a while. It kind of plays like a propoganda movie for animal rights activists, but it's *very* effective.
In the film, a scientist attempts to sort of create an electric dog. It's real graphic. I could barely watch it, but I'll never think of animal experimentation the same way again. It's billed as a horror movie, and indeed I don't think I could ever really get the image of that semi-mechanical dog trying to walk out of my head.
Fessenden has a number of axes to grind in the film, animal experimentation being only one of them, but it's the most prominent. After watching that film, I no longer no where I stand on this issue. Having said that, I hate all rats and would like to see them become extinct. Turning them into automations is a bit too gruesome for my taste though.
This is a good point. Most scientific progress comes in leaps. At some point the steady, incremental progress made by CPU manufacturers has to end. It will end when they need a fundamental breakthrough in technology to continue. Once that barrier is reached it's all just tweaking and optimizing.
If you look at the gradual improvements in hard drive speed over the years, I think you'll see what may be the future of CPUs. At some point a 10% increase in speed may be regarded as huge.
I think you're missing the point here. The processor is no longer the bottleneck in the majority of cutting edge games. Just look at the latest benchmarks at Tomshardware or Anandtech and you'll see that when benchmarking CPUs they always need to drop down to like 1024x768 to see any differences. At 32bit 1600x1200 or higher, you can many times halve the processor speed without a noticeable drop in FPS.
In the days when software rendering was the norm, the CPU was the bottleneck, but those days are nearly over. From a gaming perspective upgrading your graphics card is always priority one. Only once you have the fastest, absolute state of the art Nvidia or ATI monster should you worry about your CPU. What modern gamers drool over is not the latest CPU, but the latest GPU.
It's also good for software developers. I don't personally work as a coder, but when I see a 1 day old game, that took 3 to 5 years to make, available for free download on P2P, I cringe. Of course, first I download a copy for myself, and then I cringe. [If the game is truly good and/or I'm a fan of the developers, I will buy one of their pretty boxes. But it sits unopened :)] It makes me wonder how long these developers can stay in business. OTOH this scenario is a bit too Orwellian for my taste.
It's great that you are recommending a nice wholesome Microsoft product in the Xbox, but your eulogy is premature, and in fact, the current or near future versions will never take over the game world. Why? Because a very large percentage of gamers are not children. Many are even over 30 and already have high end computers and can afford the latest Nvidia or ATI GPUs.
There is no need for a dedicated gaming box, and even if there were, the current crop of products are wholly inadequate. For the games I like to play I need a full size qwerty keyboard, a mouse, and a large, 1600x1200 or greater resolution monitor. A TV screen and a game controller are not going to cut it.
Also, I want control over my display options. There are somewhat affordable stereo (3D) monitors now, and some 21" monitors have high enough scanning rates to allow the use of shutter glasses with Direct3D or OpenGL universal stereoscopic drivers. Most high end virtual reality equipment like HMDs and head trackers are made to be compatible with PCs, not with consoles.
Note also that Black Isle Studios (Interplay), Bethesda Softworks, Bioware, Lionhead Studios, Arkane Studios, most MMORPG teams, and most other promising developement teams are primarily creating for the PC market. Have fun playing your simplistic arcade games, this years remake of Donkey Kong, Pac Man, and Space Invaders. I'll continue to rely on my Turing machine to accomplish the task of gaming or whatever else I want to do, including writing code and developing my own games.
The only console game I've ever wished I could play was Godzilla on the Dreamcast. It got bad reviews, but any remake of Crush Crumble and Chomp is a game I want to spend some time with.
Exactly. Finally someone who can think. All of these people afraid that "grey goo" is going to take over the world, to destroy all life, to do what nuclear fusion bombs failed to do, are thinking science fiction, not reality. The idea that human beings can, in a very short time, go from making little or no significant progress in building tiny self-replicating robots to all of a sudden creating something "dangerous" is laughably ridiculous. I highly doubt our ability to create self-replicating machines of any type or size (that are not in fact biological) well enough for them to be dangerous to us, even in the next 500 years.
We're in the new millenium, but I don't see:
1. Ray guns, phasers, any kind of practical handheld weapon that isn't a firearm, even though laser technology has been around since the 60s.
2. Intelligent computers or robots, that can learn, think, and talk, although we do now have robots that can walk like us. The Turing test is over-rated, but I haven't seen any computers passing it in the sense that it was intended. Computer technology has been around since before the 60s. It has just gotten faster and smaller.
3. Flying cars or any kind of fundamental changes in our transportation machines. No fundamentally new technology at all. And, no, airbags and GPS navigation systems don't count.
4. Space Exploration or space colonization. Don't make me laugh. We are so far from this. We can't even make it to the moon without it being some major, expensive project. No progress here either. And, wow, rockets and spacecraft propulsion has been around since before the 60s. We had rockets in WW2.
5. Biological stuff: anything that can kill a virus without killing the host or the equivalent of what the discovery of antibiotics did with bacteria, a cure for cancer, cures for a zillion or so other diseases. We've been working on this stuff since forever, and our progress is barely measurable.
Either these are hard problems or we are very stupid or both. So, no, I don't see any danger that we are going to be overtaken by super-intelligent, microscopic, self-replicating, mechanical robots in our lifetimes. I would have to agree.
Give us another few hundred years at the very least. This discussion is like hearing people in Leonardo Da Vinci's time worrying about helicopters, how they're so dangerous, and we had better pass some laws before they are all over the place and someone gets hurt.
Do you realize how incredibly difficult any even remotely interesting science is to do? Sufficiently advanced technology may be indistinguishable from magic, but there is no magic in creating it. It is very slow, very hard work, which consists of blind alley after blind alley and much forehead pounding.
I blame popular science writers for these kinds of attitudes. If you look at the number of fundamental scientific breakthroughs that mankind has made in the past century it's really quite pathetic.
The truth is that scientific progress is SLOW. So slow that you should have many years to ponder these ideas. In 50 years, maybe you can start to worry about such things, although it's probably more like 500 years.
So I propose that we consider passing such regulations around the year 2503. By then there might be a need for it. Send me an email in another 1200 years when our world resembles the one from Blade Runner. Until then I'll be in cryogenic suspension waiting for humans to realize that we're not nearly as smart as we think we are. I think some people have been watching too many science fiction movies.
BTW, it's almost 2003, and I don't see a HAL 9000 computer anywhere. Another optomist. He should have titled the book 3001. It would have been more accurate. I think it's about time that we got over ourselves as a species. Hubris, not intelligence, seems to be our defining characteristic.
I think he'd better take a much needed vacation. I'm tired of hearing about crackers going to jail. The Falkland Islands are rather nice this time of year.
Good point. Won't the alleged (completely unproven) global warming effect stop when we run out of fossil fuels, or they become sufficiently scarce that their price makes alternative technologies (like burning the rest of the trees in our forests or lots of nuclear reactors) more practical? Perhaps one day all of our power sources will be nuclear (which will charge the batteries in our electric cars). All of this may happen even sooner if Sadaam sets fire to all of his oil wells again.
Your arguments are so jumbled and incorrect I don't even know where to begin. Please, open and READ an economics text before you try to comment on it.
/.: the patent. And that's not even enforced as a monopoly: patents can be licensed. Name another, I dare you.
I have Price Theory by David Friedman sitting here in front of me. Section 3 chapter 10 does have a section called "Small Number Problems: Monopoly and all that". Section 6 has a chapter entitled "Why Should I Buy This Book". Perhaps I should start there.
Name a government enforced monopoly. Come on, show me one. Just one. No, I won't wait for it. The only type of monopoly enforced by the government is the age-old bane of
Well, perhaps you should first name a "natural" monopoly, one that can exist without the government's assistance. But, ok, I'll give it a try. Most of my local utility companies, electric, cable television, cable internet, telephone, were monopolies in the recent past. This was legally enforced. These companies owned the rights to a particular geographical area almost like a patent. It was theirs and no one else was allowed to compete with them. There seems to have been some changes in this recently in that there is at least some competition in local services. Two companies service my area for all of these services except for electricity distribution. Other than that I can't think of any offhand. How about some examples of monopolies not created by the government (and without listing one person monopolies like artists, authors, or film directors, who create a potentially unique product)?
Guess what? THAT IS HOW A NATURAL MONOPOLY FORMS. It's called barrier of entry.
In theory. In practice it doesn't work because the theory is wrong. In the real world, a monopoly that acts like the monopoly from a microeconomics textbook (one which controls prices) must face at least the potential of competitors deciding that they want a piece of the action. With certain companies, merely the threat is enough to keep them in line. In the short run, they can control prices just like the textbooks say. In the longer term, however, they cannot, not without help.
The startup costs are the barrier.
This is absurd. Please explain how the first company managed to break this great barrier to entry in the first place. They were in the same situation as the second company and yet they somehow managed.
Once those wires have been paid for by one company, their cost curve drops drastically.
Just as it will for the second company, and the third, and so on. If anything the first company probably had to pay more, because material costs on things like telecommunications cable (i.e. fiber optics) tends to drop for a given capacity. This so called barrier is an illusion. There is more than one large corporation on this planet. Other companies can also afford large start up costs, especially when the profit potential has already been demonstrated by the first company.
Have a look at your cable and phone jacks, the ones that are connected directly to the poles or the underground network. How many do you have? Is there one labelled "AT&T" and one labelled "RCN?" I didn't think so. You can bet that one company (or government, even) owns those cables and the other is paying for their traffic to run on them.
Actually, due to misguided government regulations based on theories such as you cite from microeconomics, that is probably true in most places. Most "utilities" are given exclusive rights to a particular area by the government. The government makes it illegal for anyone to compete.
In my town there does seem to be an unusual situation. I actually do have some reason to believe that the newer utility has actually gone to the trouble of running their own lines instead of renting them. They even have their own telephone exchange. The exchange on my telephone number is unique to this company. The local baby bell does not use it. I have actually seen trucks from both cable companies physically running wire in my town. This would seem to imply duplicate wiring.
BS indeed. Read an economics textbook and see just how misguided most of the bullshit on this website really is.
Actually it's most of the textbooks that are misguided. Their mistake is in starting out with the premise that the government is a positive force and allowing that to guide their economic theories. Certainly a text too critical of the status quo is not going to make it onto too many college bookstore shelves. Is it just a coincidence that the ideal system implied by most of these textbooks is pretty much exactly what we have? You don't see too many textbooks with economic theories justifying marxist ideals, nor do you see many ones justifying pure free market, libertarian ideals. The writers work backward from their political beliefs. What do you think the textbooks from Soviet Russia looked like? I doubt if they devoted many chapters to Adam Smith, Ludwig Von Mises, Friedrich Hayek, or Milton Friedman.
A monopoly is not always bad, no matter what common sense or public opinion tells you.
To meet the definition of monopolies from common textbooks, it must be bad for the majority. But it depends on your perspective. Having control over prices is certainly good for the employees of the monopoly and their families, as well as any share holders. CEOs and other company officers with stock options will also be tickled pink. So the question should really be "bad for whom?".
Here's one that will blow your mind: It actually makes *more* sense for the government to tax necessities rather than luxuries.
This is like mentioning to an animal rights activist that decapitating a kitten is much more efficient than cutting off its legs and waiting for it to bleed to death. It may be true from the governments narrow perspective, but so what? Let's see if common sense works here. Necessities are "inelastic" so that prices can be raised to obscene levels and people will still buy them. This means that virtually everyone will purchase the good and thus everyone can be taxed.
Another one: A flat tax actually costs poor people more than rich people.
This depends on how you define "more". A flat tax is commonly thought to be regressive, meaning that it is supposed to penalize the poor more than the rich. This view is based on the assumption that $100 is worth more to a poor man than a rich one. In fact, because a flat tax is usually regarded as a percentage of either income or purchases, the rich man is taxed just as much (in reality much more) as the poor man, even if you believe the theory that money is worth less to the rich one. Some would still regard this as unfair. If taxes are merely a payment for government "services" and not protection money, then the rich are paying much more money for the same (or often less) services as the poor man. They are in fact being penalized because they are rich. This does not make sense to me. Of course, a "progressive" tax makes even less sense. [And, no, I'm not rich BTW and I don't like big corporations either]
The whole point of this discussion is that it is sometimes in the public interest for a monopoly to exist.
Well, this discussion certainly seems to raise that question. I would certainly argue that it is not in the public interest to create one on purpose.
In a pure competition, the firms do not have enough control over the market (they actually have no control) to set the price. They are price-takers and not price-makers. They see one price for their good or service and their only variable is cost. The more goods they provide, the higher their revenue.
You are creating an arbitrary category called a "pure competition". Its relevance in the real world is questionable at best.
In a monopoly, the firm has complete control over price. The firm is the market.
Yes, this is your argument, that such an entity can exist naturally. I admit that it can, but only temporarily or with government interference.
This firm sees the entire demand curve, not just the equilibrium point (the price at which buyers are willing to buy and sellers are willing to sell) as the firms in a pure competition do. This complete control over price means that the firm in a monopoly is free to set the price at whatever it chooses.
You could have skipped the microeconomic jargon because this is the whole point. A monopoly is supposed to be able to set the price at whatever point they want (and still sell products).
Bring able to set that price means that the firm can earn a pure profit (pure profit is defined as the profit over and above the break-even point; note that breaking even actually means covering all costs including wages). That price (and by definition, the supply of good/service in the market) is set such that the firm maximizes its revenue.
Yes, a government enforced monopoly has the ideal business climate. They can set the price high enough so that they maximize revenue. They can price the product right up to the point where too many people will stop buying it, but then drop it down exactly to the point where the greatest number of people pay the greatest amount. They can also have fun with price discrimination, attempting to charge higher prices to those who can afford them.
Of course, they can't do any of these things without the help of a government to prevent entry of other equally large or larger firms into the same, obviously profitable market. The more profitable it becomes the more they will attract competition.
The above paragraph is easier to understand graphically, so I will try to explain that graph. At the point where the marginal cost for a good (the extra cost for the next unit of a good) is equal to the marginal revenue earned from the sale of that good (which in the case of a monopoly is the same as the demand for the good), the firm is maximizing its resources. Move up the graph to the average revenue curve and you see that the average revenue at the MR=MC point is higher than the average total cost. This leads to pur profit. However, the monopolist can move that price back up the marginal revenue curve (which is equal to demand, remember) and finds that he makes even *more* profit by holding goods off the market.
Fascinating, but this will not occur in the real world in a free market. One of the biggest problems with neoclassical microeconomic theory is that it assumes a static world. They try to freeze the world while they make their assumptions. But in the real world everything is constantly changing. Even the rate of change is constantly changing in a difficult to predict manner. That's not to say that it doesn't work at all. It can be quite useful. But you cannot use these theories to prove anything else because they are, themselves, resting on the very thin ice of many arbitrary and largely false assumptions.
Now let's look at the situation where the good/service is what is called a public good. A public good is a good/service that benefits everyone. Once produced it cannot be taken back. An example of this is a lighthouse. The lighthouse benefits the oil tanker just as much as it benefits the small fishing boat. The light from the lighthouse cannot be taken back. You also cannot charge the fisherman a different price to use the lighthouse than you charge the oil tanker captain. That light is out there for both to use, and can't be shut off if the fisherman doesn't pay.
Actually, I believe that some early lighthouses were actually privately run. They earned revenue from docking fees at nearby ports etc. Of course, they still had to deal with the "free rider" problem, but they were able to run privately for some time regardless. However, unlike "natural" monopolies, I do believe that public goods actually exist. I don't, in all cases, believe that such goods are impossible to sell privately, but it certainly is more difficult.
In the past, highways have often been cited as a public good. Electronic Toll Collection has demonstrated, at least to me, that they are not really a public good. A private company could very easily be running these. Local roads are a different matter however. It is difficult to envision placing tolls on them, even electronic ones, although I suppose it is possible.
In reality, there are very few purely public goods.
Agreed. A national defense force, normally broadcast radio and television (including satellite except for the use of scrambling), local roads, local law enforcement are some examples that come to mind.
Most are a combination of public as well as private goods.
Huh? How is that possible. I thought that a good was either public or private. I've never heard that it can be both at the same time.
An example of this is electricity. It benefits everyone.
It doesn't benefit me very much if I don't pay my bill. I've had my electricity shut off on a number of occasions in my life, at which point I had to return to the technology of oil lamps in order to see at night. I think you are mistaken here. Electricity cannot possibly be a public good any more than an automobile can (their existence benefits everyone too).
Here's a definition from my economics textbook: "a good such that, if it is produced at all, the producer cannot control who gets it". Clearly electric utilities can quite easily control who gets it.
It is in the public interest to have electricity.
You mean for electricity to exist, as a technology? For it to be available for purchase? Clearly this is true, but it is also true of many other products (actually all other useful products) like computers, adhesives, airplanes, surgical instruments etc.
However, it is not in the public's interest for a monopoly to exist on the electricity supply. Or is it?
Not any more than any other industry. The same argument could be made for the pencil manufacturing industry, for instance. Electricity is just another commodity, a particularly easy one to control in fact. This would have been true even before the invention of meters since a flat rate system could have been implemented (similar to internet service providers).
Clearly we don't want the electric company to hold back its supply of electricity and only give it to those who can afford it.
I agree. I want some free electricity right now. It would be nice if my utility company would abstain from shutting off my power after not paying them for 6 months or so.
Everyone needs to have electricity.
And food and shoes and a place to live. I want to campaign on this platform: "Free electricity for everyone!"
Once company A lays wire and has covered the cost (no need to get into a discussion of amortization or depreciation here please) of that wire, it has dramatically lower costs than company b, which has to either lay its own wire or lease the wire from company a.
Come again? Can you explain to me in plain English why it would not cost company B exactly the same as company A to lay all that wire, especially if you assume that both are equally large companies? Why should it matter particularly who places the wire first? Why should it be some kind of race? Does it matter if company A beats company B by only a few hours, days, or years?
Once the cost curve has dropped below the demand curve (as it does for a public utility), the monopolist no longer has an incentive to hold goods off the market.
You are making an assertion here. Can you offer some evidence why the cost and demand curves for a "public utility" (define that please) should be any different from other suppliers of widgets? Would a manufacturer of outboard engines for example have the same situation? It seems to me that you are using those questionable theories of neoclassical microeconomics to support your assertions, but you must first argue for those questionable theories since I think they are overly simplistic and just plain wrong in many cases (because of the initial assumptions, not the internal logic).
The maximum profit can be made where the marginal cost = marginal revenue. So in this case the monopoly is no longer a bad thing.
It is still a bad thing (for the customers not the shareholders) because this mythical entity called "a natural monopoly" should theoretically be able to charge higher prices than if it had even one competitor). Of course, if you are a shareholder this would not seem like a bad thing at all.
Sure, the company can still charge whatever price it wants, but that is where regulation comes into play.
Well, regulations created this mess in the first place since such monopolies cannot exist for long in free markets unless they act as if they actually had competition, which would not agree with microeconomic theory, but which is possible.
Perhaps some reverse regulation to prevent monopolies from raising prices too much would not be terribly destructive, at least in the short run. The problem is who decides what is "too much", and how. In most cases in the real world this is decided by corrupt politicians.
Seriously, do yourself a favor and pick up a book on economics.
Another one? I already have about 12 or so. However only 3 of them are traditional college textbooks. The rest are influenced by the Austrian, Neo-Austrian, or Chicago "schools" of economics. In other words, the kinds of books a Libertarian would own.
It will enlighten you to a great many things about the way the world works.
I'm sure it would. I spent most of my time when I took my Introduction to Microeconomics course (almost 15 years ago) arguing with the professor. She couldn't seem to offer much evidence for her many assumptions agreeing with the real world. The only way I was able to pass the course was by thinking of them as rather ludicrous assumptions without any merit in the real world.
LOL. Hey moderators, pay some attention to the ACs. Mod this guy up.
Monopolies such as the phone company and cable company are because they have to create the infrastructure and multiple onfrstructures would be counterproductive.
Says who? Who decides what is "counterproductive"? You? Some politician who knows nothing about telecommunications? Some biased company lobbyist who only cares about profits? If you're so confident that it's "counterproductive", then let the market decide. Does the idea of having more than one wire in the ground bother you so much? If so, what about the idea of multiple automobile factories or multiple cell phone networks?
The fact is that the company who lays the wires first has no particular advantage over the one who lays them second or third. The startup costs are the same. Are you concerned about taking up too much space in the ground?