Nov

29

I dislike regulated monopolies in general, and especially ones I have to deal with. Comcast, for example, provides cable access in my town. And only Comcast. So if I want cable TV or fast Internet, I have to deal with Comcast with their terms, their products, and their prices. Digital phone service is provided by another monopoly. Maybe there is competition 22,000 miles out in space for satellite tv providers. Dilbert creator Scott Adams worked for Pacific Bell from 1986 to 1995, so his negative perspective on office politics and capitalism was shaped by a regulated monopoly. Apple computer has a monopoly on the supply of macs, iPhones, and iPods, but not on desktop or laptop computers, smart phones, or mp3 players. Apple designs and builds great products so they charge more and can dictate terms of use for their services. Just like Leon's Barbecue, west of San Francisco. Their food is so good, and prices so reasonable, that they can and do treat customers rudely. If you don't like it, eat somewhere else. Can't do that with regulated monopolies. Can do that with Wal-Mart.

1. Wal-Mart innovation and distribution efficiency has done more to delivery quality products that poor and middle-income people can afford–in American, Mexico, and other countries–than any or all government agencies (one of many articles here: "Walmart's Bottom Line")

2. Oil companies continue to discover, develop, and deliver reasonably-prices oil and gas to Americans, even as they face complex and often arbitrary regulations, high taxes, and generally ignorant media coverage.

3. Private contractors lower the costs and dangers of war for American taxpayers and soldiers. Unfortunately, lower-cost military contracting may make various marginally-important overseas conflicts more plausible to interventionists.

4. Monsanto brings astonishing increases in crop yields, reducing land under cultivation so leaving more land for conservation and wilderness. Biological pests and blights work 24/7 to adapt and consume world crops. Millions would likely starve if anti-biotech activists are able to block GMO research and development by Monsanto and other firms. Large numbers die now in Africa in part because European farmers and anti-GMO activists block use of pest-resistent GMO crops in Africa.

5. Microsoft has a monopoly of Microsoft products, and they are seeing the sand shift under their feet and 70% of college students use Macs and iPods. But Microsoft earned its market power by developing top-rated software (Word, Excel) and dramatically lowering prices for consumers. Microsoft's early commitment to developing for the early Macintosh's graphic platform gave them a key advantage over competitors in the DOS world.

6. The FTC blocked smaller tobacco companies advertising their low-tar cigarettes in the 1950s. Before advertising was banned by the FTC, the Tar-Wars reduced smoking more than any federal campaign, as companies promoted the benefits of their brands with repeated scenes of smokers hacking and coughing with competitor's cigarettes. The FTC blocked these ads perhaps to protect established companies and brands (claiming more research was needed to prove health claims of low-tar cigarettes). This episode is mentioned, among others, in this Regulation article.

7. Remote controls can instantly banish Fox News from any TV (and remotes can be programmed to not even pass Fox stations). And a quick call to the WSJ can stop home delivery. Unlike NPR and PBS, citizens are not forced to pay taxes to promote political and ideological views they may disagree with.

8. Regulated utilities have a long and peculiar history in American. Major public relations campaigns by AT&T and Chicago Edison subsidized newspaper articles and even economics textbook authors to promote the claim that some monopolies were "natural." Private firms were awarded monopoly power and granted guaranteed profit margins. Notes here: 

Excerpt:

In the early 1900s, electric utility pioneer Samuel Insull of Chicago Edison led a nationwide public relations campaign to convince politicians (the easiest), newspaper editors (a bit harder) and the general public (the hardest) that utilities should be regulated as monopolies rather than be subject to competition. Historian Marvin Olasky has found that as president of the National Electric Light Association (NELA), a major utility trade group, Insull's goal was to "show the public that competition in public utilities was unfeasible." Other major executives shared Insull's view, as well as his strategies to promote regulated monopolies. Insull's first strategy was to "heighten fears of socialism in order to promote acceptance of government-regulated monopoly as a less-undesirable alternative." The NELA advanced its agenda, according to Olasky, with the unwitting help of the news media: "Annual payments of $84,000 from Insull's NELA allowed Hofer [an Oregon public relations firm] to send out almost 13,000 newspaper articles annually. The articles usually appeared as unattributed, 'original' editorials."


9. McDonald's serves amazingly healthy food. From fresh eggs and orange juice for breakfast to a variety of salads and fruit smoothies. But they don't force people to eat their salads and smoothies. Like Wendy's, Burger King, and other fast-food chains, the options for healthy and inexpensive fast-food has never been better. Jamba Juice, Panera's Chipotle, and many other chains bring tastier and healthier international foods to American consumers, just as McDonalds, Starbuck's and other U.S. firms take their food and drink options to overseas consumers. Each firm relies on persuasion rather than force to survive.

Most of the companies I used to hate have gone out of business. Only the regulated monopolies are still here, and still making steady profits. Most all the government agencies I used to and still do hate are now larger and more intrusive than they used to be. The great exception is the Civil Aeronautics Board (CAB), which happily was abolished (the great Commanding Heights segment is here.


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