You are currently browsing the tag archive for the ‘monopoly’ tag.

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Hey did you see this United deplaning business on the news?  If you are here on the internet, I suspect you know exactly what I am talking about, but, in case you are reading this post in the far future or found it stapled to a tree or something, here is what happened: United Airline needed some seats on a full flight in order to move their staff around.  Instead of bribing their customers to take a different plane, the airline coerced the passengers with the fine print of the ticket contract (which, as you can imagine, allows airlines to do anything they want in exchange for zooming you across the continent at 700 miles an hour). One customer was aggrieved and refused to leave his seat, so they called in militarized corporate guards (or the police? Who can tell these days?) to beat him up and drag him off the plane. The United CEO then issued a statement basically saying “We can do as we like. Our market is guaranteed.”

Airline market share

As you can imagine, this has stirred up some hard feelings among the general public, but the CEO was right.  There is a cartel of four carriers which controls the majority of flights around America.  If you wish to fly, you must do so at the cartel’s terms (or else you need to buy a plane).  This consolidation has allowed the airlines to cut service, increase fares, and add a proliferation of fees. Most markets are under the thumb of a single carrier and, if you want to fly where they have suzerainty you will have to use that carrier or not fly.  Good luck getting a train or even a bus in America.

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I don’t mean to pick on the airlines: cable service provider, pharmaceutical companies, oil conglomerates, insurance companies, major banks…even toy companies all operate the same way in today’s deregulated society.  America has a monopoly problem: but today’s companies are smart enough to avoid having one entity take complete control of a market.  Business schools and the school of hard knocks have taught the heads of these companies to be slightly subtler about the way they fix prices and collude.   With their record profits, they have also bought up politicians and control the relevant legislation that goes in front of them.  Do you care about flight regulation legislation enough to lobby your congressperson?  I personally do not, but I bet United sure does!

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The bigger takeaway here is that capitalism is facing challenges of extreme success which are causing it to morph into naked oligopoly.  This in turn is stifling competition and innovation.  It is also breaking our political process. The Republican mantra that “government is the problem” and cartel companies like United or Aetna should be allowed to run everything for the benefit of a tiny number of great aristocrats does not really seem like a platform which was drafted by groundlings!  The Democrats pretend otherwise but they abandoned responsible attempts to reign in business cartels back in the 70s.  The parties have different favorites, but they are both content that the game is rigged.

It is not supposed to work this way.  In an ideal market, you could punish United and its smug multimillionaire CEO by spending three dollars more to take an airline that doesn’t beat up its passengers and drag them off the plane screaming.  In a better democracy, you could vote in a district where the winner was not already predetermined by gerrymandering.

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This sort of thing means we are going to have to pay attention. We all need to be aware of regulatory capture: an endemic species of corruption whereby giant companies write rules which look reasonable, but which actually price smaller competitors out of the marketplace.  Politicians rubber stamp these rules and claim they are looking out for the public interest (while the cartels support their subsequent careeers).  We are going to need to be more attentive and smarter, or we are all going to be doing what giant corporations and their pet politicians tell us to do.  The moment where we can act is quickly passing. We must push for effective new antitrust measures or we will all have to take our tiny expensive seat and shut up while brownshirts probe and beat us to their hearts’ content… not just when we fly but everywhere all of the time.

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Here are more political musings for this highly political fortnight.  Let’s start with a basic assumption.  Donald Trump is not worthy of anyone’s vote until he releases his tax returns.  That is the basic price of entry into politics.  Until he shows otherwise, we can just assume his scammy casinos and fraudulent colleges are bankrupt and all of his money comes from the Russian government. We do not even need to get to the parts about him being an ignoramus, a bully, a fraudster, and a, um, fascist who would upend decades of international peace, progress, and prosperity for his own naked self-aggrandizement.

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So, it looks as though we are supporting the Democrats this year no matter what their circus…er, caucus looks like…but what does their circus look like?  After blogging last week about the Republican convention in Cleveland, it is necessary to say something about the Democratic convention this week in Philadelphia.  So far the Democratic convention has certainly been glitzy–with all sorts of high-profile show-biz folk. After a colorful opening day during which diehard Bernie Sanders supporters disrupted the proceedings, things have settled down and the grand Kabuki of party reconciliation is proceeding apace.  I was also pleased to see the current president return to his finest form with a moving speech about Americans coming together around values like decency, hard work, and responsibility.  Where has this kind of soaring speech been during his presidency?

At heart, I am a believer in our world of capitalism, free markets, and open trade (although I don’t especially love the way the market panders to comfort over meaning).  I don’t think people are as different as the Trumps (or even the Jesse Jacksons) make them out to be.  I am a social liberal.  The theocrats need to keep their imaginary gods (and their very real inquisitors) out of people’s private lives.

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I also believe in classical liberal economics (although I use that phrase in a sort of 19th century way which will hopefully not confuse people). I read The Wealth of Nations, and I was convinced by Adam Smith’s arguments.  However, the part of that book which nobody talks about is the part about monopolies (which Smith saw as anathema to his system). Large corporations merge into immense corporations, which then become nearly impossible for upstarts to dislodge. Such corporations can and do play havoc in the market.  They alter regulations to throttle competitors.  They fix prices so that everyone pays more.  Our version of capitalism may not actually be capitalism, but is instead its hijacked successor.

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The rentiers who gain greatly from operating these monopolies (or cartels or duopolies) need to keep them from being disrupted by the only force large enough to do so: the Federal government. The Republicans…the real Republicans who have seemingly vanished overnight played a cynical game where they accumulated electoral gains by telling people not to believe in government or politicians and then collecting campaign money and post-career favors from the too-big-to fail titans.  The business interests have an easier time writing their own ticket, and minimizing the uncertainties which stem from rapid technological innovation and globalization.

However that is a cynical way of looking at politics, and we can’t afford to be cynical. Also, when I talk to thoughtful conservatives they say what I just said, except they strongly aver that it is the Democrats who have been taken over by moneyed interests.  I don’t disagree, but the sheer extent to which Republicans have acted to paralyze and undermine government makes me think of them as the true malefactors.  Is there a way to make things better?

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During his stump speech on Tuesday night, Bill Clinton said, “Change is hard and can be boring” I have not found this to be true.  Change for the better is hard.  It is exceedingly easy to make things worse.  I keep looking on Facebook and seeing my old scoutmaster from red America lambasting the Democrats and praising Trump, and it fills me with sadness.  What does he imagine in going to happen?  We will start a trade war (or a war war) with China, and suddenly it will be 1963?  Erecting trade barriers (or literal barriers) will make the cost of goods and services leap through the roof and we will be in a recession that makes the one from 2008 look like a jolly day trip. Even then protectionism and isolationism will not fill up factories with high paid workers—those days are gone forever.  If we betray our longstanding allies suddenly the world will be unimaginably dangerous…and we will have no friends.  Our power and prestige could evaporate overnight: such things are made of networks and handshakes and treaties and beliefs.  For that matter so is money (which is just promises in a database somewhere).

So we have to love the Democrats. Thoughtful people may disagree about some of their positions, but we have no choice but to back them this year. Frankly I have never had much love for the Republicans’ world of religious authoritarianism, intrusive rules about substances and bodies, censors, and unfettered cash worship anyway.  The things the Republicans represent which I do love are the belief in a robust military and the desire to throw money at technological progress (which is an entirely necessary requirement for having a worthwhile military in our world of super computers, nano-materials, and space technology).  Blue sky research is also the way to have a vibrant economy tomorrow, and maybe to stay ahead of humankind’s terrifying negative impact on the world ecosystems.  This year, the Republicans are not interested in improving the military or pushing science forward (they even stopped Newt Gingrich from going on about his moonbase) so screw ‘em.

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Hillary was not born as some cold spoiled oligarch—she worked hard to become one. She has substantial brains and a steely work ethic.  She needs to stand up for the networked world.  This is going to mean working with the corporate hegemons—the same monopolies I was bemoaning two paragraphs ago.  It is going to mean some unpalatable compromises with unsavory corporations, countries, and coalitions. Yet we know Hilary has a knack for this sort of ugly work. She also has kind of a flinty look—like she could be another Margaret Thatcher or Angela Merkel…our own formidable iron lady!

Tonight she is going to look us in the eye and tell us she loves us all and wants to hug us and that she will work tirelessly to make us richer and more free. Then she will turn around, go into a smoky backroom somewhere, and make very different promises to the great masters (neither they, nor anyone else, can trust Trump–so they are going to have to deal with her).  This saddens me, I wish we could hear about these actual plans for grown-ups rather than whatever airy waffle Hilary serves up in tonight’s speech.  But this year has made it all too obvious that people must be talked to as though they are childish idiots.

I guess I am with her.  We can keep muddling forward together to greatness.  Hilary for President!

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(at least she looks happy to have my support–and that is a very cool twill!)

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It’s movie time here at Ferrebeekeeper! Tonight we are reviewing the DreamWorks animated children’s film “Turbo” which concerns Theo, a humble snail who lives in a garden in the San Fernando Valley. Despite the fact that snails are renowned for being slow and cautious, Theo dreams of blazing speed and obsessively follows Indy Car racing (particularly idolizing the French Canadian champion, Guy Gagné, whose legendary racing prowess is matched by an oversized personality).

 

I like gardening better than car racing so some of this was lost on me

I like gardening better than car racing so some of this was lost on me

The humdrum reality of Theo’s slow-paced life as a lowly “worker” in a vegetable garden seems to preclude him from following his dreams of speedway glory…but after he is cast out of snail society he undergoes a fateful magical (?) transformation and is reborn as Turbo, a supercharged snail capable of blazing speed. Will Turbo be able to find a way into the human world of high speed car racing? Can he make it to Indianapolis and compete in the big race? Could he even maybe win? People who have ever seen a children’s movie may somehow anticipate the answers to these burning questions (and guess that the French Canadian Gagné is less likable than he first seems), but I will try not to spoil the movie for the one person who is somehow both reader of my blog and looking forward to watching a children’s movie which came out last July.

 

(Dreamworks)

(Dreamworks)

In fact devoted readers may be somewhat surprised to find this blog reviewing a children’s movie–or indeed any movie—since the cinematic art has barely been featured here at all; yet Ferrebeekeeper is deeply concerned with mollusks, and Theo/Turbo is unique in being the mollusk hero of a major Hollywood motion picture (and a spinoff television show on Netflix). Additionally, although I found the movie to be a typical work of rags-to-riches whimsy for children, I enjoyed its message about the narrow and chancy ladders to fame and riches which exist for the little guy. Turbo finds a Chicano taco-shop worker who helps the snail find social media fame (which in turn allows him to pursue further ambitions). The crazy world of internet celebrity is the real turbo-boost which elevates the tiny abject creature to the rarified realms of status and importance. It seems significant that when Theo transforms to Turbo he is shown bouncing through the terrifying and incomprehensible labyrinth of a high tech machine he does not understand at all.

Stereotypes? In an animated movie? Nah...

Stereotypes? In an animated movie? Nah…

The movie is most touching when it features the sundry immigrant shopkeepers who inhabit a run down strip mall where they dream simply of having customers. The filmmakers add some colorful urban Angelino snails (tricked out with customized shells) to give the movie some hip-hop “cred”, but it is obviously a movie about trying to compete in a world where the real contenders are playing in a vastly different league. The only aspect of mollusk existence which seemed true to life was the ever-present fear of being crushed or gobbled up (since Turbo and his snail friends are continuously and realistically threatened with being smashed by monopolistic giants and high speed machines).

Aaaaagh!

Aaaaagh!

I love animated movies and so I am giving Turbo a (very generous) rating of 3.5 shells out of a possible 5. Although the movie was colorful, well animated, and fun, it was much less involved with the bizarre and amazing world of mollusks than it might have been. It was almost as though the snail was a whimsical stand-in for omnipresent economic concerns about globalization. Also the 3D stuff did not work at all. Hollywood, stop featuring 3D! It is a horrible horrible feature which everyone hates!

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