Topic: Is it true that the Fed is privately owned - page 3. (Read 9405 times)

Well, let's start with the things that a natural monopoly must worry about as much as the cartel does:
Competition. If the monopoly/cartel raises prices enough that a new competitor can undercut them and still make a profit, then that new competitor will appear to take advantage of that situation.
Customer dissatisfaction. If the monopoly/cartel provides a poor enough product or service that the customers are willing to pay more for a superior one, then a new competitor will appear to take advantage of that situation.
Alternatives/new technology. This is somewhat of a subset of the first point, but it's separate enough to warrant being it's own point. The monopoly/cartel need not only worry about someone coming along to provide the same product or service at lower prices or better quality, they must also worry about someone coming along and providing a competing product or service. For example, let's say one company managed to get a monopoly on fast-food hamburgers. They bought up or out-competed every other burger joint in town. They would still be competing with fast-food tacos, pizza, and chicken. Additionally, one of their out-competed rivals might switch gears, and sell frozen hamburgers, that the consumer could microwave at home.

Now for the additional worry that a cartel has:
Infighting. A cartel is, as I mentioned in another thread, somewhat like a wolf-pack made entirely of alphas. At any time, one of those members could turn on the others, and by utilizing one of those methods that I mentioned earlier could bring down a monopoly, squeeze out some extra profits at the expense of the other cartel members. For example, if Burger King, White Castle, McDonalds, and Hardee's/Carl's Jr were the members of a cartel which set hamburger prices, one could cut prices and "steal" business from the others, or refocus on service or product quality, and likewise "steal" business from the others. Or they could start selling frozen burgers (White Castle already does this, Harold and Kumar could have just gone to Wal-mart, instead), or branch out into Pizza (KFC, Pizza Hut and Taco Bell, for instance, are all part of one company, Yum! Brands.)

No, not to "avoid" monopolies. To ensure that only the right people get monopolies, and to protect those who do.

Well, Let's say you were a drug dealer. You had your "turf" staked out, your favorite corner where people came to you to buy their drugs. Now, let's say another dealer "muscled in" on your turf, and one morning, you walk out to "your" corner, to find him and two big tough guys standing where you usually do. You go up to him, and you say, "Yo, this my turf, man, go get yer own corner." He replies, "It's my turf, now, punk. Piss off."

At this point you have several options: You could try for a peaceful solution, you could shoot him yourself, or you could go to the cops. Let's assume that you're a more enlightened drug dealer than is average, and you know that shooting him yourself will only start a war between his gang and yours, and going to the cops will, at best, still mean you need to get a new corner, because the cops will be watching that one for a while, and at worst, land you in jail right next to your rival and his buddies. So you opt for a peaceful solution.

Let's further say that I am an arbitrator (I am, by the way) and offer services to the drug dealers in the area (I don't, but only because I don't know any). You come to me, and ask for my assistance in resolving this turf dispute between you and the new guy. I accept, and proceed to offer my service as an arbitrator to the new gentleman, offering a peaceful solution, one that does not end up with him dead or behind bars. Now, we're starting to strain credulity, but let's assume that the other drug dealer is also wiser than average, and sees the benefit of my proposal. He agrees to arbitrate the dispute, rather than deal with the issue in the typical violent manner.

We then go to a room, and discuss the problems. It is discovered that the new guy was pushed out of his turf by yet another dealer, and just needed a place to conduct his business, and that's why he's taken over your spot. I suggest that the particular intersection where you do business has four corners, and he can simply take the opposite one, which is closer to his home anyway. He accepts, and you get your corner back, and he has a shorter "commute." Everybody happy, nobody dead. This is just off the top of my head, understand, and may not be entirely accurate, it's certainly grossly simplified. But it gets the gist across.

I'd say the Sinaloa Cartel is doing a pretty good job of "regulating" the drug economy in Mexico.

Well there never has been a stateless (post-state) society so there are only theoretical answers.  If most of your customers are law abiding they may choose to not support your unlawful (in natural law sense) actions against another.   The question also becomes IS killing a competitor lower cost and lower risk then arbitration, licensing, marketing, or other non-violent means.  I mean trying to have your competitor killed could get you (or someone you care about) killed.  Once again all theory but if private security forces replaced police states then you could find your security contract revoked per a condition in the contract.

Still I wasn't really talking about the lack of a state. We have never had a post state society so it is all theoretical and any theory is just that.  I was just pointing out the power of the cartels is a direct result of regulation, namely the prohibition on certain substances, not a lack of regulation as you seem to claim. 

The US government through ineffective regulation created the cartels and the criminal violence problem in Mexico.  The cartels and the power they have simply couldn't exist without the massive profit margins and massive barriers to entry created by the actions of governments.  If governments wanted to they could end the cartels tomorrow.  As an unnatural market they simply can't exist without the continued support of governments. 

DeathAndTaxes: what you are saying seems to be besides the point, to me.

This is my question. If there would be no state monopoly on violence (=regulation), what would stop me from killing my competitor instead of improving my product? A bullet is surely cheaper than investing in actual innovation is.

You can't look at one area in isolate.  The profit margins for the cartels are massive becomes the US with it regulation on illegal drugs is the largest importer of said illegal drugs.  Billions of dollars worth of drugs flow inward and billions of dollars flow outward to drug states like Mexico, Columbia, etc.   The higher purchashing power of Americans becomes a multiplier effect.  Americans (on average) have more disposable income thus prices are higher so the cartels gain a massive economic advantage over the state trying to control them.   Now if the cartels were legal businesses they likely would use that economic advantage in different ways (supporting candidates, lobbying, making smaller competitors uneconomical, etc) much like major corporations do in the US.  However cartels are criminal enterprises.  They leaders are already facing life sentances for hundreds of violations of the law.  At that point the more efficient use of power is direct ... violence, death, terror.   

If the US (for good or bad) legalized drugs do you think Americans would still be buying product on the street corner shipped in from criminal enterprises in Mexico?  Hardly.  Much like 99.9999999% of Americans don't buy illegal alcohol or tobacco either.  It would be mass produced by major corporations, the supply would go up, prices would go down and the economic power of the cartels would be greatly diminished. 

You forgot the all seeing Illuminati 

^^^ just great. 

Such as?


So we agree that the market is currently regulated to avoid monopolies then? (And yes, it is regulated to enforce certain monopolies as well.)


By whom? How would this work? Elaborate please...


Yeah? Who is doing the regulating in Northern Mexico?

The answer is: nobody. That's the whole point. It's a failed state (in that region).

This is a valid point, but in a free market, the same things that would topple a natural monopoly would topple or disintegrate a cartel. In addition, there is the possibility of internal strife. A cartel is less of an issue than a monopoly.

As I said, you have to go through proper channels to get a monopoly in the US.  If you don't, the penalties are harsh. But if you do, the benefits are enormous. And just like you can't go into a smoke shop and ask for a bong (it has to be called a "water pipe"), you can't call it a monopoly. It's a "government contract."

No. They need peaceful means of dispute resolution. Such as arbitration. But since any participation in that market is illegal, and punished by the government, it's difficult for them to get it. My point was that the drug market is anything but "unregulated." It's been regulated to death, in fact.

Now, a side note:
I am not here to "prove people wrong." I am in fact here to see if my ideas can be knocked down by anyone else's. If you can prove my logic faulty, I will discard it, and take up the superior point. The plain fact is that nobody has been able to prove me wrong yet, and I don't see much hope in you doing so. But I wish you the best of luck in trying.

Monopolies. Not monopoly's. Got it. (English is not my first language.) For the rest, I'd argue that cartels are from a consumers perspective the exact same problem. As long as prices are fixed, I don't care if it is one corporation doing the job, or several that are colluding. Same difference. Centralization of power.



Actually, I'd wish you would question your own dogma's from time to time. The fact that you are only here to prove other people wrong, instead of trying to actually progress your way of thinking, is exactly why I do not like to argue with you at all; there is not really a point in doing so.

Also, I'm not American so excuse me for not knowing what the exact laws of that country are.


"The law's treatment of monopolies is potentially the strongest in the field of antitrust law. Judicial remedies can force large organizations to be broken up, be run subject to positive obligations, or massive penalties may be imposed the people involved can be sentenced to jail."

http://en.wikipedia.org/wiki/United_States_antitrust_law#Monopoly_and_power


Wait, so we dó need a state in order to legally resolve disputes then?

Also, the drug gangs are not really "resolving disputes", are they? They are killing their competitors in order to monopolize their trade. And they are doing so in area's where the state has lost all it's power to do something anything about it. No policeman dares to get involved in large parts of northern Mexico, and new majors are being killed the same day they get appointed.

It's not because there are states that such violence happens, but because of the failure of states.
https://en.wikipedia.org/wiki/Failed_state
https://en.wikipedia.org/wiki/File:Failed-states-index-2012.png

(I'm lucky enough to happen to live in one of the sustainable states by the way, which is probably why I think we need them.)

Hi Darren,

The Federal Reserve System has a dual mandate. Its monetary policy largely targets the federal funds rate. This rate is determined by the market and is not explicitly set or mandated by the Fed. Therefore, the fed tries to set the effective federal funds rate with the targeted rate set up by the market by adding (or subtracting) from the money supply through the open market operations. Usually, therefore the Federal Reserve System adjusts the federal funds rate by 0.25% at a time (or even 0.50%). The open market operations allow the Fed to decrease or increase the money supply in the banking system to balance the dual Federal Reserve's mandates, which is to (1) maximize employment and (2) stablize pricing in the market place.

Well, "bitcoin" could be considered the bitcoin developer's "monopoly" if it gained all of the market in digital currency. That's really unlikely, considering the amount of competition it already has.

I agree with everything, you said, but I have a hard time reconciling how money controlled by a Protocol and Maths, could be considered anyone's monopoly.  

> ...The moment it stops doing that, it opens itself up for competition.
I would argue "it" doesn't have a monopoly if it is not in control of the Money, IE the monopoly only exists if it relinquish controlee to some higher principal, and if they deviate from that principal then there monopoly is lost.

I have got to run but look forward to reading the above and about these exciting ideas over the weekend.

I was just saying you can't argue with evolution, and if you trace our current economic system back through the millennia, you will come to a point where 2 single cell organisms start cooperating for a benefit that is greater than each is capable on their own.  

Play the whole evolution tape from primordial soup through to today and it will result in the same outcome, why? Where did natural selection go wrong, (Free-market anarchism has a built in safety mechanism that prevents parasitic relationships form forming, so how is it that the parasitic relationship with the planet is allowed to persist and to add insult to injury it is fed and propagated by the very pour people who are being impoverished by it?)  

Well when you try and see where we deviated from the natural laws of physics, (or Gods plan) we see it was at some point where a very destructive meme took hold. As an atheist I love the bible, so I will draw an analogy I think the meme occurs the moment Adam and eve get thrown out of the Garden of Eden.  

so yes I think people will wake up soon, but the problem is not easy to see.

Sigh.
It doesn't matter if the monopoly is formed via competition or merger, a natural monopoly is still a natural monopoly.

That outlaws cartels, not monopolies (please take note, that is the proper pluralization). And "pretty sure" is a poor basis for argument. Monopolies are anything but illegal in the US. You just have to go through proper channels to establish one.

The reason violence is the dispute resolution method of choice in the drug market is because of the regulations making participation in that market illegal. They have no legal means of resolving disputes.

Actually I was not talking about natural monopoly's. I was talking about monopoly's from integration - why did you choose to let that one out?

Plus, I'm pretty sure that all of these markets are regulated, since monopoly's are illegal in the US. http://en.wikipedia.org/wiki/United_States_antitrust_law

Also, it is illegal to kill your opponent, so that's another regulation. Sounds silly? The drug market is truly unregulated. The free market turns out not to work very well there. Violence works.

Well, to stay strictly on-topic, we should limit the discussion to monopolies on money. Specifically, the service of providing the commodity that is used as money in a marketplace.
This is patently and provably false. The computer market is one of the least regulated on the planet. Cars have only safety and emissions regulations to contend with (and many companies voluntarily exceed those regulations). Food, similarly, has only health and safety regulations, and a few labeling requirements. You chose the worst possible examples for natural monopolies, since all of those industries show robust competition, in a largely unregulated (free) market.
Well, at least you can see some sense.

I'm not sure what we are talking about here. Monopoly's on money, or monopoly's in general?

In a free market, I think monopoly's in general will almost certainly develop over things that are scarce. (Car's, food, computers, etc.) This is not a good thing, because it centralizes power.
Since you can use anything as money though (hence it is not necessarily scarce) I agree with you (Myrkul) on the money part.

Adrian-x: Yeah you could say that some meme's are a problem. However, there is absolutely no way to be sure that your meme is better than any other meme, since that thought itself would be (part of) the meme. Therefore, you should not able to force memes on anyone nor remove them. Neither do I really think you could be able to do so; a totalitarian society would be the closest thing to accomplishing such a thing. I'd say that shitty meme's are just something we need to deal with as best as we can.

Actually, the "government as legitimate monopoly on force" meme is only as old as Machiavelli.
https://mises.org/document/1092/Myth-of-National-Defense-The-Essays-on-the-Theory-and-History-of-Security-Production

Now, as to monopolies, I think the definition provided (A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity) is a good one. The article further points out: "Monopolies can be established by a government, form naturally, or form by integration." I'd say the latter two are just versions of the same thing: Market forces make it more efficient for one company to provide that commodity. In a free market, the former one would not be possible. So we're just left with "natural" monopolies to worry about.

Given the particular commodity that we're talking about (money), a natural monopoly is possible, but not something to worry about. For the only way that a provider of money, in the free market, can become the sole provider of money, is to provide the best, most stable, most reliable money. The moment it stops doing that, it opens itself up for competition, and that competition will be fierce.

I would like to excuse myself for leaving the conversation earlier, and falling to respond, things seemed to be going a little feral.
As for monopolies lets all agree to use this definition (don't edit it) http://en.wikipedia.org/wiki/Monopoly

I have clarified my thinking somewhat, after reading a great article that introduced another problem. The underlying point was why we need Free-market anarchism, and the argument the author was debunking was Free-market anarchism evolves into the Statism we have now and will end up at the same place again. (even countering the argument we still have a Free-market anarchism between states and the evolution process is still refining) I think he did a s#!^job, but I totally agree Free-market anarchism is the most efficient and effective solution and should be the apex of market evolution, but why isn't it, and how did we wind up so wrong?

While I did agree we needed Free-market anarchism.  Should we have Free-market anarchism we could technically never have a monopoly, without some form of intervention (collectively agreed force or a perverted meme).

So I don't agree government is the problem, I think the problem is the individual and there is the source of the problem. Our society has evolved with Memes that have been in play and instilled over many generations even since prehistoric times.  It is these destructive memes held by individuals that have allows Free-market anarchism to fail, humanity and technology would have evolved so much faster had we not become deluded by them. The natural evolution from roaming tribes to war lords to Feudalism to "Democratic" and Fascist governments is the expected evolution from people who have these memes. 

Free-market anarchism is in my view just the human extension of the laws of Nature and universal physics. So monopolies are in whatever forms they appear just a natural evolution of some deep rooted meme, and they will continue to be a problem until our individual memes are corrected. 

No, this is completely on-topic. I contend that the solution to all the problems presented by the Fed is to eliminate it's monopoly on the creation of money, and open that duty to the free market.

Your counterclaim is that monopolies would still exist on the free market, with the implication that they would be just as bad as the Fed. In order for me to show this claim to be fallacious, I need you to clearly delineate what you mean when you say "monopoly."