As usual I didn't buy the book, but previewing it on Amazon it seems long on pontificating and short on references. There are a few numbers but the analysis goes like "Look at these numbers. Something is terribly wrong. It must be market failure!".
I subscribe more to the failed government theory, there is just nobody in any of these fields who cares about economic efficiency as they are too busy fighting to get campaign funding.
That review mentions output restriction 15 times in total, the implied argument being that monopolies and cartels restrict output at some point of the demand curve and there is no output restriction these are not real monopolies.
Imho this is not a useful argument without also offering the marginal cost curve for that industry. Ie maybe for airlines technology driven efficiencies allows marginal revenue to exceed marginal cost at scale? From elsewhere “A monopolist can determine its profit-maximizing price and quantity by analyzing the marginal revenue and marginal costs of producing an extra unit. If the marginal revenue exceeds the marginal cost, then the firm should produce the extra unit.”
That's a strangely mixed review, and the same probably applies to your comment.
He seems to agree that regulations are preventing competition and should be removed, yet simultaneously argues that there's no evidence of companies output being affected and so we shouldn't have stronger anti-trust action.
It seems paradoxical to hold both these opinions at once.
Particularly if corporations are paying politicians to enact (or at least not repeal) those laws.
How can foreign airlines entering the market improve matters if the domestic airlines are already being directed by the invisible hand of the market to deliver the best service possible?
There's a considerable amount of competition in airlines for example, and they're always going in and out of business - prices are competitive. In most other areas, they are as well. Consumer products are cheap in America.
There are some oligarchy problems, ironically, many of them may be in tech, not cars, fuel, groceries or common consumer products.
>In some industries, licensing rules directly exclude new competitors; in other cases, regulations are complex enough that only the largest companies can afford to comply.
Not really a regulation but sales tax is a nightmare. We really need a consistent federal standard.
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[ 4.2 ms ] story [ 43.6 ms ] threadAs usual I didn't buy the book, but previewing it on Amazon it seems long on pontificating and short on references. There are a few numbers but the analysis goes like "Look at these numbers. Something is terribly wrong. It must be market failure!".
I subscribe more to the failed government theory, there is just nobody in any of these fields who cares about economic efficiency as they are too busy fighting to get campaign funding.
Imho this is not a useful argument without also offering the marginal cost curve for that industry. Ie maybe for airlines technology driven efficiencies allows marginal revenue to exceed marginal cost at scale? From elsewhere “A monopolist can determine its profit-maximizing price and quantity by analyzing the marginal revenue and marginal costs of producing an extra unit. If the marginal revenue exceeds the marginal cost, then the firm should produce the extra unit.”
He seems to agree that regulations are preventing competition and should be removed, yet simultaneously argues that there's no evidence of companies output being affected and so we shouldn't have stronger anti-trust action.
It seems paradoxical to hold both these opinions at once.
Particularly if corporations are paying politicians to enact (or at least not repeal) those laws.
How can foreign airlines entering the market improve matters if the domestic airlines are already being directed by the invisible hand of the market to deliver the best service possible?
-Everybody on the internet
https://www.economist.com/special-report/2018/11/15/across-t...
https://www.economist.com/graphic-detail/2018/11/20/competit...
https://www.economist.com/leaders/2018/07/26/like-america-br...
https://www.economist.com/graphic-detail/2016/03/24/corporat...
There are some oligarchy problems, ironically, many of them may be in tech, not cars, fuel, groceries or common consumer products.
Not really a regulation but sales tax is a nightmare. We really need a consistent federal standard.