I'd agree with that, but it seems like we're being forced to choose between two unacceptable situations.
Well that's life for you.
Regulation is the lesser evil in all monopoly situations. Then you start considering things like public health (food, drugs, health etc.) or international trade (subsidies, levies, currency manipulation etc.) and it gets hard to find an industry that shouldn't be regulated fast.
Let's look at your examples: "municipal" water, that is water supplied by the local government.
Well it is now - because that was the only sensible thing to do after initial experiments with indoor plumbing resulted in competing private companies which lowered profits and forestalled the installation of any new infrastructure. This is one of the better studied examples of how natural monopolies can arise and why we don't want them.
Railroads became monopolies because after Vanderbilt laid rail between New York and St. Louis no one else would be stupid enough to build redundant infrastructure, because if he lowered his fare by a nickel for a year he'd have one less mansion and you'd be destitute (then he'd buy your line at fire sale prices and build a bonfire). This means, if you wanted to go from New York to anywhere in the midwest you had to pay his monopoly rents.
This is Adam Smith stuff, it's not controversial. Capital intensive industries have high barriers to entry, the initial player can operate inefficiently and still undercut you on price, because you have to pay back your loans and they have equity in their investments.
This is why everyone gets their power from an Edison company, and there isn't a competing Tesla power. There simply isn't room for competition.
How many people who worked in sweat-shops graduated to management? Before the industrial revolution shirts and shoes were made by middle class skilled tailors, after they were made by lower class unskilled factory workers.
Ultimately, the industrial revolution morphed into the modern industrial economy and the largest expansion of the middle class in history - but only after labor reforms had taken hold. Labor dragged the the industrialists into modernity kicking and screaming and shooting and beating.
Like I said, industrial society oiled it's machine by offering better conditions than agricultural society - but only just. So the standard of living for the lower classes rose, but only by a small amount - an efficient market in action.
The industrial revolution proved to be a great thing, but only after the we constrained the most self-serving aspects of naked capitalism.
If a monopoly, or something close to it, is allowed to fortify its position as a monopoly while regulated...
We're entering into circular territory here. You acknowledge that there is such a thing as a natural monopoly, right? Therefore, regulated or not such an entity will have an unfair competitive advantage. I would argue that unregulated such an entity would (and has) run amok exploiting it's position to extort monopoly rents from helpless customers whose alternatives are constrained. Regulated, such an entity can be forced to provide services it ought to, but otherwise wouldn't have to. If at a latter date you wish to modify the arrangement the proceedings can get messy.
When referring to Ma Bell I'm referring to the baby bells also, sorry if I wasn't clear.
So you're saying that poorly conceived and poorly executed deregulation is a problem with regulation?
"The last mile" specifically means running and maintaining infrastructure directly to each of your customers homes. So no, cell phones do not have the last mile problem. Which is what makes their market fundamentally different from both cable tv and land line phones. This is why cable tv and land line phones are natural monopolies and cell phones aren't. Comparing one to another - even if they offer superficially the same service is comparing apples to oranges. For the record, I agree, the cell phone market is, and always has been better than both the land line and cable tv market.
5-nines uptime is with land-lines. Government regulated, government mandated service. Not perfect, but existent. Rural electrification and rural telephony are success stories. Private broadband penetration a glaring failure. And it's not an exception. I get water to my apartment everyday, and I don't have to negotiate arbitrary checkpoints and toll booths when I drive to work on public roads. Regulation isn't always desirable, but it is always necessary in monopoly markets.
Obviously, the optimal solution is unknowable. But based on our experiences in the gilded age and based on Russia's experiences after the October Revolution, we know that it lies somewhere to the left of laissez-faire libertarianism and somewhere to the right of communism.
Based on our experiences between 1950 and 1973, the optimal solution is probably far to the left of laissez faire libertarianism.
As much as people didn't like ma bell, they liked the baby bells (e.g. bell south), after deregulation, much less.
Ma Bell was broken up in 1984, well before DSL made any significant inroads.
Cable TV is fundamentally different from cell phones because cell phones don't have the "last mile problem."
You may feel that AT&T is a perfect example of why government regulation doesn't work, but ask the guy in the Tennessee valley who still can't get broadband, but has a phone with 5-nines uptime thanks to the universal service fund.
We've seen it happen with municipal water and we've seen it happen with railroads. It's reasonable to infer that any situation where an industry requires a massive capital outlay to run the sort of infrastructure where parallel lines would be redundant to be similar.
At some point rather than repeating the same mistakes, you have to learn by analogy.
Actually, let me rephrase that. It's debatable whether the lack of regulations during the industrial revolution (and now in China) were a "mistake." It may be that this was the only way to get sufficient population density to eventually get to a modern economy. However, it's not something I would desire to return to.
Right, he might just be in Canada's or Britain's pocket instead. The national CTO might be involved in some national security issues like cyberwarfare, right? Do you really want foreign nationals in sensitive appointed positions? (I say this as a child of an immigrant).
Also keep in mind that public service positions pay comparatively poorly. This guy doesn't want to be a life-long civil servant, he either wants to get out and retire after Obama leaves office, or he wants to return to the private sector where he can make some real money again.
I've got real issues with the intersection of money and politics. On the one hand I'm an ardent free-speech supporter. On the other, I think that "legal persons" have undue influence. It's a sticky situation, one that would work itself out with what I consider a fairer income distribution. The middle class needs to make more money (this includes civil servants) and the middle-upper and upper-upper classes need to make a lot less.
So...what "system" will provide more winners over a free market?
The one we're using now.
No it's not perfect, but laisez-faire free-markets erode the middle class. An economy where the majority of industry is private and regulated with organized labor creates more winners than any other system tried to date.
The problem with cities laying their own infrastructure is that they will never replace it. Paris is running the same sewers it was when the in 1400. Verizon is only now replacing copper telephone wires laid in 1900 with fiber, and they're only doing that because they're not obligated to let competitors lease fiber (as they are with copper.)
There isn't a good solution here, but we could do worse than regulated private industry (though I'd prefer the regulations to be a bit tighter and mandate open access to the network for competitors at whole-sale rates).
We haven't put it to the test in the last 100 years or so, because we learned the lesson the first time. The industrial revolution in Britain and the United States was a free-market wet-dream. No minimum wage, no worker safety, no anti-competitive status, and no child labor laws.
What happened was that industry found the sweet spot where they were just a hair better than staying on the farm (which also had none of those restrictions) so that they could run their machinery with a constant stream of new-arrivals. The result was sweat shops, child labor, company towns, tenements, slums, the reduction of the middle class (skilled workers), and massive environmental damage - all for the benefit for a few ultra-wealthy "captains of industry" like Rockefeller, Carnagie, Morgan, and Vanderbilt.
Ironically, communist China is in the process of repeating our free-market mistake.
What you say is true, but in order to ensure competition you must bar against collusion, cartels, vertical integration, and consolidation of power, and the only way to do that is not self-regulation, but good old third-party government regulation.
No one has the money to compete with Comcast, because this is a classic case of a natural monopoly. If someone were to seriously try, one or both companies would go under and we'd be left with at best worse service as the cash-strapped survivor exploits the market to recoup the money it lost to the defunct competitor, or no service as neither company can survive with <60% market share.
cable television and power distribution are natural monopolies. Regulated or not, there is no possibility for a free market there.
Pharma companies are regulated because we found out that if we didn't regulate food and drugs, snake oil salesmen would wander the country selling unlabeled tincture of morphine to cure your upset stomach.
Insurance... well that's a clusterfuck. Insurance is interesting because it is largely regulated at the state level, so, in theory, it should be possible for one state (Texas? Oklahoma? Utah?) to decide that it wanted to try out unregulated insurance to appease the spirit of Ayn Rand. At least that's what people who respond with "tenth amendment" in all caps to my posts tell me. For some reason, however, we have 50 states and not one is actually willing to put their free-market-money where their mouth is.
The way I see it, the history of human warfare went through three distinct phases, tribal warfare, army-on-army warfare, and then army-on-population warfare. Your analysis seems to start "in antiquity," which I would place in the second phase. There has been quite a lot of war before the Greeks and Romans, and during all that time there was no distinction between civilian and warrior.
In tribal warfare, which composes the vast majority of human history (though not the majority of war-related death) every conflict was -at best- ambivalent about genocide. Waring or raiding tribes whether Indonesian, Scandinavian, or Semitic, fought against a people, not an army, and were frequently genocidal.
Then came the concept of state and empire, and at this time armies nominally stopped engaging the population (with plenty of exceptions)and started engaging other armies. During this time, most war related deaths were non-civilian, with the occasional civilian massacre thrown in.
After the fall of Rome the west backslid into feudalism, which is kind of defies classification. The 100 years war sort of vacillated between national armies, local bands, and mercenaries. You had knights deciding some battles and conscripted serf-arches others. Suffice to say, it's tough to define "civilian" between the fall or Rome and the Renaissance.
Finally, with the industrial revolution, the shortest and most deadly portion of history, we discovered what "total war" really means. It seems that today the pendulum is swinging away from massive civilian casualties - but this could easily be a temporary (in the grand scheme of things) reprieve.
I agree that the weather is no more independent of the laws of physics than are our brains.
I however also think that like the weather and the complete universe, and other non-determinant systems, the smallest complete model of an animal brain is the brain itself. Because of chaos and quantum uncertainty and the vagaries of analog and digital it may be that while there is no one thing human brain can do that a computer cannot do, it may also be true that there are dependencies in the system such that it becomes impossible for any human brain model to do exceed the capability of the human brain in certain multiple tasks simultaneously.
It is also possible that Turing completeness is necessary but not sufficient to model a human brain.
Killing them was neutral - provided the current land owner didn't arm them and convince them to fight you. And provided that they didn't seek refuge in your opponents fortifications. And provided that you are after productive land and not a something else. And provided that you wouldn't prefer to clear them out so that your own countrymen could better farm the land due to their ethnic superiority.
But even if you wanted to preserve the workforce on your newly-conquered land, peasant men still were not considered civilians in the modern sense. As we can see by the colonial period, they were more-or-less considered work animals and not afforded the dignity that we assign to human beings generally today. In fact, peasants were likely to be treated more cruelly than the opposing soldiers that you were actually fighting - of course that was true both before and after an invasion and continued regardless of who controlled the land.
Which, as you noted, are pretty much the same factors that went into the calculus of civilian casualties in WWII.
Chernobyl happened because a poorly designed and very poorly maintained reactor, was pushed too hard by fools not heeding their barely existent safety protocols.
Not quite. Chernobyl happened because a poorly designed and very poorly maintained reactor, deliberately disabled their barely existing safety protocols to run a poorly conceived and disastrous experiment.
massive civilian casualties are not acceptable in any war situation today. For the vast majority of human history you went to war against a people, not an army. The specifics of who was fair game varied with the era, sometimes women and children were killed, sometimes they were kidnapped, and rarely they were left pretty much alone. Prior to the advent of the nation state and professional soldiers (~1500 in the west) there was no such thing as a civilian man.
Your confusing black swans for movie plots. Discounting the likelihood of retrieving a nuke on the seafloor isn't ignoring a black swan, anymore than saying WWI wasn't likely to be precipitated by Anastasia leading an anti-commie revolt, or saying a sub-prime bubble wasn't being precipitated by George Soros in order to install a one-world government.
If someone obtains and uses a nuclear device, that would qualify as a black swan. But that someone isn't going to dig it off the sea floor - it would be easier to kidnap AQ Kahn and get him to build it for you. It would be easier to steal one from Russia. It would be easier to fund N. Korea's weapons program in exchange for a weapon. Black Swans aren't the stuff of James Bond flicks - making a lost nuclear weapon work is just that. Black Swans are a boring series of events that leads to dramatic consequences.
Slashdot Mirror
Well that's life for you.
Regulation is the lesser evil in all monopoly situations. Then you start considering things like public health (food, drugs, health etc.) or international trade (subsidies, levies, currency manipulation etc.) and it gets hard to find an industry that shouldn't be regulated fast.
Well it is now - because that was the only sensible thing to do after initial experiments with indoor plumbing resulted in competing private companies which lowered profits and forestalled the installation of any new infrastructure. This is one of the better studied examples of how natural monopolies can arise and why we don't want them.
Railroads became monopolies because after Vanderbilt laid rail between New York and St. Louis no one else would be stupid enough to build redundant infrastructure, because if he lowered his fare by a nickel for a year he'd have one less mansion and you'd be destitute (then he'd buy your line at fire sale prices and build a bonfire). This means, if you wanted to go from New York to anywhere in the midwest you had to pay his monopoly rents.
This is Adam Smith stuff, it's not controversial. Capital intensive industries have high barriers to entry, the initial player can operate inefficiently and still undercut you on price, because you have to pay back your loans and they have equity in their investments.
This is why everyone gets their power from an Edison company, and there isn't a competing Tesla power. There simply isn't room for competition.
How many people who worked in sweat-shops graduated to management? Before the industrial revolution shirts and shoes were made by middle class skilled tailors, after they were made by lower class unskilled factory workers.
Ultimately, the industrial revolution morphed into the modern industrial economy and the largest expansion of the middle class in history - but only after labor reforms had taken hold. Labor dragged the the industrialists into modernity kicking and screaming and shooting and beating.
Like I said, industrial society oiled it's machine by offering better conditions than agricultural society - but only just. So the standard of living for the lower classes rose, but only by a small amount - an efficient market in action.
The industrial revolution proved to be a great thing, but only after the we constrained the most self-serving aspects of naked capitalism.
flamebait huh?
Man, some people just won't let their (counter-factual) opinions be challenged.
We're entering into circular territory here. You acknowledge that there is such a thing as a natural monopoly, right? Therefore, regulated or not such an entity will have an unfair competitive advantage. I would argue that unregulated such an entity would (and has) run amok exploiting it's position to extort monopoly rents from helpless customers whose alternatives are constrained. Regulated, such an entity can be forced to provide services it ought to, but otherwise wouldn't have to. If at a latter date you wish to modify the arrangement the proceedings can get messy.
http://xkcd.com/720/
Care to detail any systems outside of the bounds I offered? Or a better way to locate the global maximum?
So you're saying that poorly conceived and poorly executed deregulation is a problem with regulation?
"The last mile" specifically means running and maintaining infrastructure directly to each of your customers homes. So no, cell phones do not have the last mile problem. Which is what makes their market fundamentally different from both cable tv and land line phones. This is why cable tv and land line phones are natural monopolies and cell phones aren't. Comparing one to another - even if they offer superficially the same service is comparing apples to oranges. For the record, I agree, the cell phone market is, and always has been better than both the land line and cable tv market.
5-nines uptime is with land-lines. Government regulated, government mandated service. Not perfect, but existent. Rural electrification and rural telephony are success stories. Private broadband penetration a glaring failure. And it's not an exception. I get water to my apartment everyday, and I don't have to negotiate arbitrary checkpoints and toll booths when I drive to work on public roads. Regulation isn't always desirable, but it is always necessary in monopoly markets.
Obviously, the optimal solution is unknowable. But based on our experiences in the gilded age and based on Russia's experiences after the October Revolution, we know that it lies somewhere to the left of laissez-faire libertarianism and somewhere to the right of communism.
Based on our experiences between 1950 and 1973, the optimal solution is probably far to the left of laissez faire libertarianism.
As someone who thinks that libertarianism is a giant scam, I think this is a succinct and accurate analysis.
The only point I'd add is that just because libertarianism fails more gracefully than communism doesn't mean it's anywhere near the optimal solution.
So, not perfect, but pretty well.
As much as people didn't like ma bell, they liked the baby bells (e.g. bell south), after deregulation, much less.
Ma Bell was broken up in 1984, well before DSL made any significant inroads.
Cable TV is fundamentally different from cell phones because cell phones don't have the "last mile problem."
You may feel that AT&T is a perfect example of why government regulation doesn't work, but ask the guy in the Tennessee valley who still can't get broadband, but has a phone with 5-nines uptime thanks to the universal service fund.
We've seen it happen with municipal water and we've seen it happen with railroads. It's reasonable to infer that any situation where an industry requires a massive capital outlay to run the sort of infrastructure where parallel lines would be redundant to be similar.
At some point rather than repeating the same mistakes, you have to learn by analogy.
Actually, let me rephrase that. It's debatable whether the lack of regulations during the industrial revolution (and now in China) were a "mistake." It may be that this was the only way to get sufficient population density to eventually get to a modern economy. However, it's not something I would desire to return to.
Right, he might just be in Canada's or Britain's pocket instead. The national CTO might be involved in some national security issues like cyberwarfare, right? Do you really want foreign nationals in sensitive appointed positions? (I say this as a child of an immigrant).
Also keep in mind that public service positions pay comparatively poorly. This guy doesn't want to be a life-long civil servant, he either wants to get out and retire after Obama leaves office, or he wants to return to the private sector where he can make some real money again.
I've got real issues with the intersection of money and politics. On the one hand I'm an ardent free-speech supporter. On the other, I think that "legal persons" have undue influence. It's a sticky situation, one that would work itself out with what I consider a fairer income distribution. The middle class needs to make more money (this includes civil servants) and the middle-upper and upper-upper classes need to make a lot less.
The one we're using now.
No it's not perfect, but laisez-faire free-markets erode the middle class. An economy where the majority of industry is private and regulated with organized labor creates more winners than any other system tried to date.
The problem with cities laying their own infrastructure is that they will never replace it. Paris is running the same sewers it was when the in 1400. Verizon is only now replacing copper telephone wires laid in 1900 with fiber, and they're only doing that because they're not obligated to let competitors lease fiber (as they are with copper.)
There isn't a good solution here, but we could do worse than regulated private industry (though I'd prefer the regulations to be a bit tighter and mandate open access to the network for competitors at whole-sale rates).
We haven't put it to the test in the last 100 years or so, because we learned the lesson the first time. The industrial revolution in Britain and the United States was a free-market wet-dream. No minimum wage, no worker safety, no anti-competitive status, and no child labor laws.
What happened was that industry found the sweet spot where they were just a hair better than staying on the farm (which also had none of those restrictions) so that they could run their machinery with a constant stream of new-arrivals. The result was sweat shops, child labor, company towns, tenements, slums, the reduction of the middle class (skilled workers), and massive environmental damage - all for the benefit for a few ultra-wealthy "captains of industry" like Rockefeller, Carnagie, Morgan, and Vanderbilt.
Ironically, communist China is in the process of repeating our free-market mistake.
What you say is true, but in order to ensure competition you must bar against collusion, cartels, vertical integration, and consolidation of power, and the only way to do that is not self-regulation, but good old third-party government regulation.
No one has the money to compete with Comcast, because this is a classic case of a natural monopoly. If someone were to seriously try, one or both companies would go under and we'd be left with at best worse service as the cash-strapped survivor exploits the market to recoup the money it lost to the defunct competitor, or no service as neither company can survive with <60% market share.
cable television and power distribution are natural monopolies. Regulated or not, there is no possibility for a free market there.
Pharma companies are regulated because we found out that if we didn't regulate food and drugs, snake oil salesmen would wander the country selling unlabeled tincture of morphine to cure your upset stomach.
Insurance ... well that's a clusterfuck. Insurance is interesting because it is largely regulated at the state level, so, in theory, it should be possible for one state (Texas? Oklahoma? Utah?) to decide that it wanted to try out unregulated insurance to appease the spirit of Ayn Rand. At least that's what people who respond with "tenth amendment" in all caps to my posts tell me. For some reason, however, we have 50 states and not one is actually willing to put their free-market-money where their mouth is.
The way I see it, the history of human warfare went through three distinct phases, tribal warfare, army-on-army warfare, and then army-on-population warfare. Your analysis seems to start "in antiquity," which I would place in the second phase. There has been quite a lot of war before the Greeks and Romans, and during all that time there was no distinction between civilian and warrior.
In tribal warfare, which composes the vast majority of human history (though not the majority of war-related death) every conflict was -at best- ambivalent about genocide. Waring or raiding tribes whether Indonesian, Scandinavian, or Semitic, fought against a people, not an army, and were frequently genocidal.
Then came the concept of state and empire, and at this time armies nominally stopped engaging the population (with plenty of exceptions)and started engaging other armies. During this time, most war related deaths were non-civilian, with the occasional civilian massacre thrown in.
After the fall of Rome the west backslid into feudalism, which is kind of defies classification. The 100 years war sort of vacillated between national armies, local bands, and mercenaries. You had knights deciding some battles and conscripted serf-arches others. Suffice to say, it's tough to define "civilian" between the fall or Rome and the Renaissance.
Finally, with the industrial revolution, the shortest and most deadly portion of history, we discovered what "total war" really means. It seems that today the pendulum is swinging away from massive civilian casualties - but this could easily be a temporary (in the grand scheme of things) reprieve.
I agree that the weather is no more independent of the laws of physics than are our brains.
I however also think that like the weather and the complete universe, and other non-determinant systems, the smallest complete model of an animal brain is the brain itself. Because of chaos and quantum uncertainty and the vagaries of analog and digital it may be that while there is no one thing human brain can do that a computer cannot do, it may also be true that there are dependencies in the system such that it becomes impossible for any human brain model to do exceed the capability of the human brain in certain multiple tasks simultaneously.
It is also possible that Turing completeness is necessary but not sufficient to model a human brain.
Killing them was neutral - provided the current land owner didn't arm them and convince them to fight you. And provided that they didn't seek refuge in your opponents fortifications. And provided that you are after productive land and not a something else. And provided that you wouldn't prefer to clear them out so that your own countrymen could better farm the land due to their ethnic superiority.
But even if you wanted to preserve the workforce on your newly-conquered land, peasant men still were not considered civilians in the modern sense. As we can see by the colonial period, they were more-or-less considered work animals and not afforded the dignity that we assign to human beings generally today. In fact, peasants were likely to be treated more cruelly than the opposing soldiers that you were actually fighting - of course that was true both before and after an invasion and continued regardless of who controlled the land.
Which, as you noted, are pretty much the same factors that went into the calculus of civilian casualties in WWII.
Not quite. Chernobyl happened because a poorly designed and very poorly maintained reactor, deliberately disabled their barely existing safety protocols to run a poorly conceived and disastrous experiment.
massive civilian casualties are not acceptable in any war situation today. For the vast majority of human history you went to war against a people, not an army. The specifics of who was fair game varied with the era, sometimes women and children were killed, sometimes they were kidnapped, and rarely they were left pretty much alone. Prior to the advent of the nation state and professional soldiers (~1500 in the west) there was no such thing as a civilian man.
Your confusing black swans for movie plots. Discounting the likelihood of retrieving a nuke on the seafloor isn't ignoring a black swan, anymore than saying WWI wasn't likely to be precipitated by Anastasia leading an anti-commie revolt, or saying a sub-prime bubble wasn't being precipitated by George Soros in order to install a one-world government.
If someone obtains and uses a nuclear device, that would qualify as a black swan. But that someone isn't going to dig it off the sea floor - it would be easier to kidnap AQ Kahn and get him to build it for you. It would be easier to steal one from Russia. It would be easier to fund N. Korea's weapons program in exchange for a weapon. Black Swans aren't the stuff of James Bond flicks - making a lost nuclear weapon work is just that. Black Swans are a boring series of events that leads to dramatic consequences.