Quote from: Rassah on October 11, 2011, 07:38:29 PM

In the many discussions about state v.s. free market on this forum, the one thing I keep running across is people claiming how if someone establishes a monopoly in a libertarian society, then everyone else in that market is screwed. Their reasoning is that anyone else trying to enter the field will get kicked out by the established monopoly. Recent example was oil companies (https://bitcointalk.org/index.php?topic=47747.msg568485#msg568485), where the claim is that starting your own oil company is now impossible, because established oil companies now have too much control over oil.

The mistake I keep seeing over and over and over (and over and over) is that people seem to think there is only one way to destroy a monopoly, which is to create a more competitive business in the same market. There are actually two ways:

Outcompete the monopoly in their own market

OR

SUBSTITUTIONS

If a company has a monopoly on ALL soda (Coke, Sprite, 7-UP, etc) and prices go up too high, people substitute with drinking milk or juice.
If a company has a monopoly on all operating systems, people can substitute with built-in application platforms, like running Google Docs or Chrome apps on PCs regardless of the OS installed.
If a company has a monopoly on electricity (common, with public utilities being only options for running wires), people substitute by reducing power usage, buying generators, or using their own solar and wind generators.
If a company has a monopoly on cable TV, people substitute by buying satelite, or buying internet, only, and streaming TV through Hulu/Netflix.
If a company has a monopoly on oil, people can substitute by switching to natural gas, ethanol, or electric.

There once were monopolies on trains, typewriters, telephones, televisions, and a slew of other stuff, much of which we don't even use anymore. They were all killed by substitutions.
So, next time you want to bring up a point about how a monopoly you are thinking of is entrenched and can not be replaced by someone else selling the same stuff, PLEASE stop, remember the word "substitution," think, and see if there is anything else that people can use in place of that monopoly's product.

I've argued against the free market because my research has lead me to find many examples of its failings, but in all honestly I really really want to have my mind changed and see it work, because if it does work, it would be the best most efficient system. I just don't know that it can. But I really enjoyed that PDF you posted for me on the other thread, and I will be scouring the forum for your other posts. I think I can learn a lot from you, and I will eagerly await your refutations of any points I may make arguing against you.