Monday, February 22, 2016

Monopolies are bad for consumers. Don't believe me - believe them.

I have been pushing the fact that monopolies are simply bad for the consumer the entire time I have been on this blog. It's not something I made up. Anybody who has taken any college level Econ course has heard the same thing. Here are some of the giants of Economic theory and their views on the subject of monopolies, and on governments trying to regulate virtue or morality.  If you only read the first one you'll get the basic idea, but the rest are interesting in their own way too. You'll not find a single Nobel Prize winner in Economics who believes that any Government retail of a legal product is good for society

Milton Friedman - University of Chicago: Nobel Prize winner.
“Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property. When government — in pursuit of good intentions — tries to rearrange the economy, legislate morality, or help special interests, the cost comes in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.”

"One of the great mistakes is to judge policies and programs by their intentions rather than their results.” 

“A major source of objection to a free economy is precisely that people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.

"Governments never learn. Only people learn"

"Less government intervention, not more government intervention, is the most effective way to protection consumers against monopoly power. "

Jean Tirole - Toulouse University in France: Nobel Prize winner.
"Many industries are dominated by a small number of large firms or a single monopoly. Left unregulated, such markets often produce socially undesirable results — prices higher than those motivated by costs, or unproductive firms that survive by blocking the entry of new and more productive ones." (This clearly applies to the beer oligopoly in Pennsylvania as well.)

Murray Rothbard - S.J. Hall Distinguished Professor of Economics, UNLV
"No government enterprise can ever determine prices or costs or allocate factors or funds in a rational, welfare-maximizing manner. No government enterprise can be established on a business basis even if the desire were present. Thus, any government operation injects a point of chaos into the economy, and since all markets are interconnected in the economy, every governmental activity disrupts and distorts pricing, the allocation of factors, consumption/investment ratios, etc."

Friedrich August von Hayek - University of Chicago: Nobel Prize winner.
"Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom."

"To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm."

George Stigler - Columbia University: Nobel Prize winner
"The state — the machinery and power of the state — is a potential resource or threat to every industry in the society. With its power to prohibit or compel, to take or give money, the state can and does selectively help or hurt a vast number of industries."

Sir Richard Stone -  Cambridge University: Nobel Prize winner
”When the American spirit was in its youth, the language of America was different: Liberty, sir, was the primary object.

I could do pages upon pages more but let me finish with the man who is credited with starting economic theory.

 Adam Smith - Author of  'The Wealth Of Nations'
"Virtue is more to be feared than vice, because its excesses are not subject to the regulation of conscience."

So write your legislators, especially those who want to keep our ancient system, and particularly the Governor and ask them why they think they know better then these august and honored economic thinkers. Feel free to copy any of this material; this knowledge is not a monopoly.

1 comment:

Anonymous said...

Just found out the PLCB will be closed all day the day AFTER Christmas this year. What's that all about? Also, their website says the limited-release lottery is "closed". Is it closed for good? I had high hopes for the lottery but was it a massive failure?

Also note the last couple board meetings have happened days before the scheduled date. Very strange. Yet the dates of the listings are still for the originally scheduled dates.