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Puppy Dog

Cartels, "abusive competition" and organized crime

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I decided to spin off one of the biggest developing questions I had from my "a few problems" thread to here since i'm assuming initial readers to my first post probably completely missed the later clarifications, and this is one that's really bugging me.

I'm reading thru Capitalism An Unknown Ideal so if this is already answered in later parts (or another book) let me know, i've only just started.

I'm still seeing a problem with preventing abusiveness. Not so much force or fraud, but what I would best describe as a systematic abusiveness, an attitude of interaction that manages to stay just shy of actual force or fraud (ie the specific crimes for which violent retaliation is called for by police in an objectivist society) while still amounting to organizational intimidation and similar. It includes a willingness to do either crimes with a low risk of getting caught (such as bribery over small things) unless there is a police state surveillance society Panopticon attempting to prevent it.

Such systematic abusiveness would often go hand in hand with extreme excesses of capital and monopoly positions in the market, or alternately cartels which either maintain artificially high prices or which maintain a simultaneously but artificially low standard in say safety or health due to various market barriers to entry to keep their profits up. An example would be a cartel of Big Oil maintaining artificially high prices, the moment a new wildcatter brings an independant oil operation online, the cartel deliberately crashes the prices to below the costs of doing business to wipe out the competitor, then jacks up the price to way above what a truly free market is likely to pay. Another example would be Walmart shutting down a store the moment the workers got unionized. Although unions arent de-facto banned, the message to other Walmart workers considering starting a union is very very clear. I do not see any protections or preventions against this in an Objectivist society so far. (I am refraining from the followup "so clearly the GOVERNMENT shoul..." because that's not what i'm either wanting to believe or suggesting.)

On a related note even if we eliminate the most common sources of funding for organized crime (a topic briefly covered in my other thread on "a few problems") which are namely 1) governments themself, using confiscatory taxation, and a monopoly of force controlled by legalized bribery buying political pull/"permission to do business"/seizure of competitors, or 2) unnecessary black markets in particular high profit high demand things like drugs you would starve alot of it but it could have funding from offshore looting elsewhere to stay afloat meanwhile. I'm trying to figure out how an objectivist society would deal with the problem. Would it deal with it the same way that libertarians would? (I could argue the freedoms of a libertarian system might bring it down, my comment that free markets never remain free, but thats attacking libertarianism, Objectivism may be different)

This comes back to my questions about social darwinism, and whether an objectivist society would be the most resilent or survivable community under what we might call extremely hostile human-caused conditions and even to the levels of an organized covert war or military assault attempting to undermine such a community/nation/state. (but please dont only answer this, also comment on my concepts of abusive competition or de facto monopolies)

Note - i'm not suggesting a government initiating force arbitrarily, nor even in line with some 'precrime prevention' pseudo-legal excuse is better. It seems far more often that government agencies dedicated to preventing bad stuff end up utterly corrupt and eliminating the real competition (ie - DEA agents selectively enforcing on those not a part of the cartel not even realize why theyre being told let this plane go, let that one go, now fly in and stop the third one only - see the film American Drug War, or the FDA going after herbal remedies that have killed nobody while Vioxx was still on the shelf after tens of thousands of deaths) i'm aware government intervention seems to only make things far worse. It may be a situation that there is no real governmental answer to, and the remaining personal and community answers are similarily impotent with nothing to be done. Or that it will exist under capitalism still but be less voracious and more limited than other other government systems. Thats an acceptable answer, but i'm hoping there is a better one.

Edited by Puppy Dog

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I decided to spin off one of the biggest developing questions I had from my "a few problems" thread to here since i'm assuming initial readers to my first post probably completely missed the later clarifications, and this is one that's really bugging me.

I'm reading thru Capitalism An Unknown Ideal so if this is already answered in later parts (or another book) let me know, i've only just started.

I'm still seeing a problem with preventing abusiveness. Not so much force or fraud, but what I would best describe as a systematic abusiveness, an attitude of interaction that manages to stay just shy of actual force or fraud (ie the specific crimes for which violent retaliation is called for by police in an objectivist society) while still amounting to organizational intimidation and similar. It includes a willingness to do either crimes with a low risk of getting caught (such as bribery over small things) unless there is a police state surveillance society Panopticon attempting to prevent it.

Which principle in Objectivism would make this question legitimate? If the government is not involved in economic policy and all laws are aimed at individual rights, exactly what would the bribe be about and who would be doing the bribing?

Such systematic abusiveness would often go hand in hand with extreme excesses of capital and monopoly positions in the market, or alternately cartels which either maintain artificially high prices or which maintain a simultaneously but artificially low standard in say safety or health due to various market barriers to entry to keep their profits up. An example would be a cartel of Big Oil maintaining artificially high prices, the moment a new wildcatter brings an independant oil operation online, the cartel deliberately crashes the prices to below the costs of doing business to wipe out the competitor, then jacks up the price to way above what a truly free market is likely to pay. Another example would be Walmart shutting down a store the moment the workers got unionized. Although unions arent de-facto banned, the message to other Walmart workers considering starting a union is very very clear. I do not see any protections or preventions against this in an Objectivist society so far. (I am refraining from the followup "so clearly the GOVERNMENT shoul..." because that's not what i'm either wanting to believe or suggesting.)

And the problem is...? If Walmart closes a store, how are they to sell product and make money? If workers want to unionize, why would Walmart care? There are no laws forcing companies to deal with unions. Contracts govern such relationships and if either workers or Walmart don't want to deal with each other by voluntary consent, then each goes its own way: look for another employer or hire other workers.

If oil prices go down because of competition, that would be good for me, no? Who are you to say what is an "artificial price", let alone one that is "high" or "low"? No monopoly is without competition: from many other markets outside of its area of specialty. For example, Alcoa may control 90% of the aluminum market, but it competes with the titanium and stainless steel (and other materials) markets. It cannot arbitrarily set prices.

On a related note even if we eliminate the most common sources of funding for organized crime (a topic briefly covered in my other thread on "a few problems") which are namely 1) governments themself, using confiscatory taxation, and a monopoly of force controlled by legalized bribery buying political pull/"permission to do business"/seizure of competitors, or 2) unnecessary black markets in particular high profit high demand things like drugs you would starve alot of it but it could have funding from offshore looting elsewhere to stay afloat meanwhile. I'm trying to figure out how an objectivist society would deal with the problem. Would it deal with it the same way that libertarians would? (I could argue the freedoms of a libertarian system might bring it down, my comment that free markets never remain free, but thats attacking libertarianism, Objectivism may be different)

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An Objectivist society deals with individual rights and your examples above do not indicate problems with, within, or for an Objectivist society. A "black market": what in the world is that in a free society? Black markets are free markets in societies with controlled markets. So let's use our terms clearly.

Edited by A is A

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An example would be a cartel of Big Oil maintaining artificially high prices, the moment a new wildcatter brings an independant oil operation online, the cartel deliberately crashes the prices to below the costs of doing business to wipe out the competitor, then jacks up the price to way above what a truly free market is likely to pay.

On a scale of zero to infinity, how often would you as a consumer fall for that trick? Fool me once, shame on you; fool me twice...

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Another example would be Walmart shutting down a store the moment the workers got unionized.

Wal-Mart's done this and it is one of the reasons to love the company. It's a shame they've recently decided to "go green" they're now starting to destroy the company for some reason.

I didn't answer any of your questions because most of them answer their self if you think in principles. Specifically, non-initiation of force in this case.

Edited by JMeganSnow

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With all of these scenarios, you're basically asking that people not be held responsible for their decisions.
If the scenario reflects reality, which it does not. The oil example is a good one because Standard Oil once sold over 80% of the oil in some markets, was prosecuted under anti-trust law, and was broken up. Yet, the facts show that far from raising the price of oil, Standard Oil made oil cheaper than it had every been.

In the fictional world in which professors of economics reside, WalMart has been dropping its prices for years just so it can one day be the only one around, and then it will raise them.

Edited by softwareNerd

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Which principle in Objectivism would make this question legitimate? If the government is not involved in economic policy and all laws are aimed at individual rights, exactly what would the bribe be about and who would be doing the bribing?

Bribing a policeman to not enforce a law perhaps? Or to falsely investigate a killing so I can carry out a mafia hit to slowly institute a protection racket? Profit is much less without "illegal" drugs and working for the government but maybe they have funding from outside and want to see the society fall.

If oil prices go down because of competition, that would be good for me, no? Who are you to say what is an "artificial price", let alone one that is "high" or "low"?

Sure it would be good for you, unless it was a price war intended to monopolize, selling oil at 50 cents a gallon only to later hold the economy hostage at $50 dollars a gallon due to sudden predatory impulse. The market would eventually fix the problem, but damage would be done. Possibly catastrophic damage. What if the army paid to protect the nation in a free market suddenly held it hostage and demanded triple the wages to fight off the invader?

And I dont know if i'm proposing i'm the one who is saying what an artificial price is. Making the government responsible for protecting people from human-on-human predation only creates a bunch of people who blame the government if it cant foresee everything and who have no ability to judge for themself what is dangerous. I'm aware there is no more protection than in nature which is predatory. But if it went from 50 cents to 50 gallon and it was an artificial scarcity caused by controlling the supply lines and arbitrarily shutting them off during a crisis to drive things even higher, at the very least that is extremely abusive. People would have no ability to go somewhere else for gasoline during the crisis - the market would eventually provide a solution if it was a chronic problem and they would likely not allow that to happen again. Maybe predatory abuses NEED to happen, because they are inevitable, to shock people with their horror in the media so they wont happen. That is an acceptable answer if you want to give it, I was just hoping for better if there is one.

Let me put it another way, what if you were going under anaesthetic for an appendectomy, and you were aroused during the middle of it to be told "were almost out of anaesthesia, and to have enough to finish the surgery you need to sign over your house because the new price is 100x the old price", would you view that as a free and fair contract? You aren't threatening violence or fraud afterall, just refusing to continue to work. Some may say yes, that youre responsible for being so paranoid you can percieve absolutely every possible abuse and extortion that can be used against you.

I'm not suggesting gangsterism is a sustainable way to run a business, nor good "branding" once word got out of what you done. What i'm saying is if there is nothing preventing it (other than contracts the size of an encyclopedia which still have teams looking for exploitable loopholes), then you may have certain superpredators who will make it their goal to make one good somehow legal financial killing and then settle down for life. Get the billionaire under anaesthesia and take everything just because nobody ever expected such unprofessional abusiveness. Why not? It's free contract, right?

I'm playing devil's advocate. I have legitimate concerns that i'm hoping are proven wrong through enlightened answers. Maybe these things would only happen if people were pathologically cowlike and failed to have the proper wariness necessary to survive in a society without protectors or safety nets. Perhaps the problem would eugenically solve itself within a few generations.

No monopoly is without competition: from many other markets outside of its area of specialty. For example, Alcoa may control 90% of the aluminum market, but it competes with the titanium and stainless steel (and other materials) markets. It cannot arbitrarily set prices.

Yes that's a quote from the book. See my above medical example for perhaps the most extreme case I can think of. The answer is probably simple but I can't put my finger on it or put it into words. :-/ I guess what i'm really asking is whether there is ever a case for regulated anything - whether health, safety and other standards should all be voluntary market compliance and free choice. Whether police and military forces should be hired by the 'state', or whether there should be absolutely no state at all and just hired private police and mercenaries. (the danger I see being that mercenaries historically arent very trustworthy and dont have the love for country or self sacrifice that nationalistic statist armies Espirit de Corps)

An Objectivist society deals with individual rights and your examples above do not indicate problems with, within, or for an Objectivist society. A "black market": what in the world is that in a free society? Black markets are free markets in societies with controlled markets. So let's use our terms clearly.

What happens when individual rights destroy the very society they live in. Does my right to play my stereo at 130db outside still apply at 3am? Does my right to hold a KKK rally still apply in front of the holocaust memorial? I'm not saying they shouldn't and i'm not saying they should, i'm trying to have a discussion.

Black markets would be markets that are illegal. Nuclear weapons, child prostitution (if youre not against prostitution and youre not against child labor laws it would be legal), murder for hire (pretty sure that would be illegal to solicit violence in an objectivist society, but a market could still exist for it - jilted lovers and by definition it would be illegal).

Would you argue that one should have the right to purchase a nuclear weapon as an individual right because it's their personal responsibility not to misuse it, and that the society cant forbid it because it has no right to regulate or forbid trade?

On a scale of zero to infinity, how often would you as a consumer fall for that trick? Fool me once, shame on you; fool me twice...

An individual consumer with the ability to choose, exactly once. After which a free media would have such an uproar that the market would scramble to provide alternatives because nobody would do business with the thug. I'm just saying the danger is still there without regulation. It may be that that is a preferable danger to the danger of government regulation since the dangers of government are worse - the corruption of Stalin killed 20 million, but I find myself whether there should be a free an open market for things that primarily have a purpose in say, extortion or terrorism. What if I was a capitalist willing to sell guns and weapons to the looters and rioters that wanted to storm Hank Rearden's factory, isnt that kind of undermining things?

Should I be able to secretly release a disease, and then hold a monopoly on the cure, saying it's fair and free contract even though you wouldn't have had the sickness or even needed my product without me extorting it? Rand understands markets, but whether she understands criminology i'm not as sure.

With all of these scenarios, you're basically asking that people not be held responsible for their decisions.

Yes I am aware of that, but there are situations where the herd of people can still be manipulated. Enviromental standards are not really something you can put to a free and open market. You have a race to the bottom, a tragedy of the commons, where everyone pollutes because to clean things up would cost more, and so the herd makes a poor choice that individuals would never make.

If the scenario reflects reality, which it does not.

I tried to give what I felt were some more specific examples. One i'll post in it's own topic if it isn't answered here, what about a case like genetically modified food crops? Should that be sold on the open market because it's an individual right to choose to buy it or not? When the problem is that they cross contaminate everyone else's fields and have severe health side effects that the companies have struggled to keep suppressed with thug like behavior? If your neighbor plants GMO it could wipe out your organic farm for instance, is it their right to plant seed that has such effects? I would not support a state existing to steal my neighbor's profit and deliver it to me but if my neighbor is doing something that will sicken me like dumping mercury into the water table and there's nowhere else to move because everyone everywhere is dumping different poisons elsewhere in the name of industrial production...

The purpose of objectivist society is to supposedly raise us above the level of nature where violence and retaliation rules the normal order of things and to protect individual rights. It is, in essence, an attempt to prevent organized crime and violent thuggery. The question is that if the crime and thuggery simply evolves to be more sophisticated and still cause the same effects by doing a workaround to every limiting law, does an objectivist society attempt to evolve new laws to stop the thuggery or does it stay as it is? It's utopian to believe that criminals wouldn't try to take things over, it just takes a smarter breed of criminal and human predator. The reason I mention social darwinism elsewhere is that if the freedoms of the society lead to it's own downfall what was the point. It may be there is no way to prevent abuse and corruption any more than there is a way to prevent eventually having an injury or getting a disease, and that objectivism provides not only the best possible tools for fighting it if so but also the only moral way of fighting it. If thats just an inevitability that's fine and maybe a series of horrors is inevitable because statism only prevents one horror to create an often worse one.

I dont know if Rand predicted things quite like we have now. A bridge of Rearden metal possibly collapsing and killing a trainload of people is not the same as genetically poisoning the entire planet, or carrying out bioweapon research without safety controls that could infect the majority of the world if it got out. Hopefully a world of economic freedom and without state sponsored coercion everyone would have more interest in creation and at worst hedonism than in figuring out ways to game the system because it's easier to get ahead legitimately than to figure out a borderline criminal way to do so.

In no way am I suggesting I would rather live in a statist controlling society. I am saying this is the weight of arguments against objectivist laissez faire societies for which so far i've had no counterargument.

Edited by Puppy Dog

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Sure it would be good for you, unless it was a price war intended to monopolize, selling oil at 50 cents a gallon only to later hold the economy hostage at $50 dollars a gallon due to sudden predatory impulse.
In markets where it is reasonable to expect a high switching cost, or a danger of being left with few good alternatives, people insist on contractual conditions to protect themselves against such things. Such protective clauses are written into thousands of contracts every day. The most egregious places where they do not get written in is where the government allows a monopoly: e.g. with utility companies. If not for government enforcing these monopolies, and then standing by to stop them from raising prices, people would definitely insist on all sorts of clauses to protect themselves.

What if the army paid to protect the nation in a free market suddenly held it hostage and demanded triple the wages to fight off the invader?
What has this got to do with Objectivism? What if the army did this under Socialism? or under our current mixed-economy?

BTW, when I spoke of your scenarios not reflecting reality, I meant that they're all contrived "what ifs" rather than (say) pointing to some real issue that really arose in real life.

Your example of GMO is an attempt at a real life example. Objectivism does not give someone the right to do something that will destroy his neighbors crop. However, the fears around GMO are mostly like all the fears around all new things: way overblown fears of the unknown, rather than fact-based fears of some real proven damage.

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What's the use in asking all of these loaded questions that have a premise like "what if everything goes to hell and there's nothing you can do about it? What do you do about it?" That's like "what if everyone in the world decides to kill you and there's nothing you can do to stop them?!" "What if the army revolts and decides to nuke New York and you can't stop them? How do you stop them?" Loaded questions. What does this have to do with political philosophy? Falsely investigate a killing so I can carry out a mafia hit to slowly institute a protection racket? What does that even mean, that's not a coherent thought. Extortion is illegal. Force is illegal. Fraud is illegal. What if a policeman is corrupt and doesn't follow the law? Then you have a corrupt policeman that doesn't follow the law. I can't tell what that has to do with Objectivism. So a mysterious "abusive cartel" is going to get a monopoly on all the oil in the world and we need to protect the public from low prices? Or is this "abusive competition" we are worried about? "Abusive" monopolies or "abusive" competition? Which is it? You can't have it both ways.

I have a better one, what if a society decides to grant one organization with a monopoly on force, and that monopoly decides to force you to pay it protection money and fund other coercive socialist monopolies, or else it will arrest you or kill you if you sufficiently resist, only they call it "taxes" instead of "protection racket" and the only way to fix it is to institute capitalism? What do you do?

Now the other half of your questions are the same things people have answered before and it just doesn't seem like you are paying attention or taking note of them honestly.

What happens when individual rights destroy the very society they live in. [Loaded question.] Does my right to play my stereo at 130db outside still apply at 3am?

No, you don't have a right to do whatever you feel like whenever you feel like. You have a right to act freely without aggressing against person and/or property of others. Physical aggression does not just take place with a person jumping a fence or breaking a door down, excessive noise is also a form of aggression. If you are emitting noise aggression onto your neighbor's property, then you are initiating force.

Does my right to hold a KKK rally still apply in front of the holocaust memorial?

Of course your right applies in front of a holocaust memorial, but I don't know if that gives you the right to hold a rally in front of a holocaust memorial. It depents on the context. Who owns the property? Who has been given permission to be on the property? If all the correct conditions for having a large group of people peacefully assembled on the right area, then yes; if not, then no. How does this "destroy society" either way? Some people hurting some other people's feelings is not "destroying society."

child prostitution (if youre not against prostitution and youre not against child labor laws it would be legal),

No it would not be legal. You've already been told at least 3 times that a child cannot legally consent and yet you still want to go on about child prostitution.

Would you argue that one should have the right to purchase a nuclear weapon as an individual right because it's their personal responsibility not to misuse it, and that the society cant forbid it because it has no right to regulate or forbid trade?

It depends on the context. Who specifically is owning a nuclear weapon? How did he get ahold of it? Where did he get it from? How did they get ahold of it? Who built it? Who sold it? If the government is asking a private company to build it for their arsenal, then yes it is okay. Or if it is unarmed and sitting in a private museum, then yes it's okay.

If some guy wants to buy one from Iran and put it in his suitcase and detonate it in an airport, then I'm going to have to say no to that one, what do you think? If it's sitting in your basement for your personal entertainment, I'm going to go with no.

The only thing you can do with a nuclear weapon is use force, and private force is not allowed, and the government has to regard your ownership of a nuclear device as a threat. In retaliating against that threat, it can tell you not to own one.

Should I be able to secretly release a disease

Should you be able to initiate force? I'm gonna go with no, but something tells me you know the answers to these questions and yet you ask them anyway.

Get the billionaire under anaesthesia

What part of legal consent is so hard to grasp? What aspect of initiating force is so hard to grasp?

I am saying this is the weight of arguments against objectivist laissez faire societies for which so far i've had no counterargument.

I have yet to hear an argument against laissez-faire, what's the argument? What's the question? Are these your objections to freedom? I shouldn't be allowed to be free because someone might hire someone to murder someone else even though it's illegal? I'm sorry, I don't mean to be rude, but these questions are that bad. Now that you've heard counter arguments to everything listed on this page, most of them more than once, I'm sure you won't go around saying that you've never heard "solutions" to these "problems" anymore, will you?

Edited by 2046

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