That's a nice thought, and it may even be true in the longest of time scales and the broadest of pictures. But in this day and age, the fact is that research and innovation require substantial funding, and your backyard inventor generally does not have the capital to make, for example, a better thin-film solar cell on his own. So researchers depend on outside sources for funding: the government and private industry.

And where does the government direct its research funding? Well, it is no surprise that both candidates support clean coal as an "alternative" fuel, when almost ten swing states are huge coal producers. Similarly, it's no surprise that McCain supports offshore drilling... Or that Obama supports continued ethanol subsidies in the face of all scientific evidence when he comes from one of the leading corn producing states in the country.

And industry? Well, to stay in business a corporation has to look out for its own interests. This is why we see what little funding oil companies do put toward alternative energy (e.g. BP's $500M grant to Berkeley and UIUC) going toward biofuels -- liquid fuels with relatively high energy density that they can ship and process with the existing oil infrastructure.

So, technology and innovation may win out, I suppose, but the direction of the advances that we see out of the research sector are hugely influenced -- shaped, even -- by public policy (and hence big business lobbies) and industrial interests.

How are they trying to prevent alternatives?


You are failing to look at what besides transport and energy the byproducts of the oil industry are used for in your life.

You are thinking of monopolies in a large market sense, but they are most dangerous in a small market. Picture a small town of 1,000 people that have only 1 source of water and electric. The water company and electric companies both quadruple their rates over night. What do the small town residents do? There may be answers for long term recovery, but short term the residents will just have to pay whatever the rates are. The infrastructure of water and electric makes it impossible for a competing company to quicky respond.

That is why utilities are government regulated with pricing, and they also need to rent their infrastructure to competitors are government set rates. This is forced compitition, but allow the utilities to remain a monopoly market share. If the pricing wasn't regulated, it would be very dangerous to the average comsumer.

Do you see a problem with this statement in regards to a coercive monopoly? Probably not.

Come now Venen, I want you to defend your supply side stupidity.

Supporting the status quo as best they can, particularly by not supporting any measures that would lead in the direction away from oil(GM's cancelled electric car, anyone?). Completely understandable from a profit sense.



No, I didn't, and some of those may not get replaced by anything for some time. But the bottom line is that fuel is still a major player when it comes to oil sales, enough so that OPEC may no longer be able to monopolize the market as easily without that revenue source, particularly in terms of demand for its product.



We are seeing more of that now, certainly, but are you expecting that since it's harder right now to perform basic scientific experiments and make products that are on the cutting edge in one's own garage, that it will never ever be that way again in the future? Remember, just 30-35 years ago Bill Gates began his quest to all but dominate IBM and Apple, and ended up succeeding largely on his own business savvy. I'm not sure if you'd qualify IBM as a monopoly back then, probably not, but they had their ball in their court to understate it.

Given human history, I don't believe it's appropriate to suggest that we will remain at a point where only large corporations with their political influences can afford to change the direction of technological advances.



Companies big and small already do this, though granted more often to less effect. If you have the best and only product of its kind, you are rewarded for being the first to the punch. That's what drives people to keep finding new sources, and get there first. The water company succeeded, but it's hardly doom for the small town. They'll may be forced to pay those rates for a time, depending on how rapid the response is by the town's entrepreneurial crowd, but in the end that water company runs the risk of being completely overthrown.

Raise rates too high, and they drive themselves out of business because people get upset. That's the beauty of it. In fact, arguably by not having the arbitrary line in the sand you would have a situation where people might be a little more responsive(like they are with OPEC, which we can't really do anything about except bitch and moan, and then eventually use alternative sources). This is because basically, you say 85 percent of the market share is A-OK, so the company who BASICALLY already has a monopoly just retains that 85 percent mark, and the government and people may not even take notice until years of plundering the consumers.

The water company in question simply needs to go with 1.5x or 2x the basic rates, and they can keep going and going and going. Raise em too high, take advantage of your monopolistic position and the populace responds in force. The water company, in essence, has regulated itself because the market would not stand for it.



No, I don't. There is no question that that's precisely what they're doing. Last I checked, they want to retain their profits. The minute oil companies start promoting electric cars, I will see a problem with my statement =)

wow Venen... there are so many things I agree with you on, but I had no idea you were this crazy about monopolies. I don't really know where to begin, heh.

The reason why my example of the water company raising the rates is two fold. I'm surprised you don't follow the more obvious reasoning behind how harmful lack of price protection for utilities would be, but I'll list the other reason and maybe that will be enough for you.

Many utility companies are granted special rights by local governments, such as they can dig through any ground they need to in order to bring service to the populace. That means they can dig through your yard whether you want them to or not, normal companies cannot do this. They can have public roads shut down for work and the city will repair them once they complete the work. These competitive advantages are given because it's for the betterment of the community. Those perks come with a responsibility to the community to charge fair rates, and it also means it is not reasonable for competitors to enter the field due to these infrastructure requirements.

On a side note, please check the current Yahoo/Google merger news. Google dropped all talks with Yahoo and canned the plan because the department of justice warned of an anti-trust lawsuit. The reasoning behind this action was because Google would control over 90% of the internet search market. 90%.

Here it is:
http://www.newsvine.com/_news/2008/11/05/2075626-yahoos-fate-unclear-as-google-abandons-ad-deal

I'm not sure what half of you are arguing... and I'm not sure you even know.

Monopolies with pricing power = bad

See, that wasn't so hard.

Frankly Orme, I was surprised that argument wasn't sufficient.

How many firms can be in a monopoly? Hint, look at the MONO part.

It sounds like this needs to be quoted again for Venen. When monopolies restrict supply and raise price it is bad for the consumer because of the stolen consumer surplus and bad for the entire economy because of the dead weight loss of both consumer AND producer surplus.

What about a coalition of firms with a common interest?

If I run the only computer repair place in town and charge 70$ an hour and then another guy opens up a computer repair place and chargers 65$ an hour, and I call him up, have a meeting, and we work out that we will both charge 75$ an hour, aren't we acting as one unit?

http://en.wikipedia.org/wiki/Cartel

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If you want to get technical that would be an oligopoly, which essentially amounts the same general concept anyway with multiple entities instead of just one controlling it all. Many "individual" corporations have various sectors of their companies as a result of acquisition, if you want to get nitpicky about the "mono" for almost all intents and purposes that amounts to nearly the same thing.

OPEC has a monopoly, or oligopoly, whichever you prefer - I'm not sure if it's 90 percent(I doubt it), but it's obviously a pretty damned large share. The bottom line is that you can cry your little eyes out about the prices and the situation, but in the end the world is almost the perfect model for what I'm suggesting. Our laws about monopolistic situations cannot overturn them. What we can, and WILL do, is adapt to the situation and start using alternatives. Even with their massive share of this precious resource, I don't think there is anyone out there suggesting we cannot overcome it.

As for your graph, I never suggested that monopolies make for ideal situations. Indeed, for at least the short term, times will be quite tough. But just as you feel the need to bring it out and repeat yourself, I'll do the same: There's almost never a monopoly that's insurmountable, and there are plenty of things to be learned from both their successes and ultimately their downfalls.

OPEC isn't even close to 90% of the world's oil production. Just going from memory I think it's only about 25-30%. They are the largest exporters though, because while the USA and Russia produce more oil than OPEC, we still use much more than we produce (obviously).

And Draagun, that scenerio you described is called collusion. Different than a monopoly, but still illegal in the USA since it has a similar effect.

That is a cartel, a form of oligopoly.



That would be illegal and you could go to jail for something like that. At the very least you would have your business license revoked. Then you wouldn't have a computer repair place now would you.



You are technically right, there is one market force that can counteract a monopoly. But I would put money on you not knowing what it is. And they are equally as illegal as monopolies.

GAH you said it out loud!!! Next you'll be telling me that we need population control!! WTF

Come on Venen defend your supply side stupidity in this thread.

That's what I'm saying. Cartel=Monolpoly=collusion= illegal right?

It's all pretty much the same shit, that's what I was getting at.

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No, cartel's are not monopolies. That is like saying cars are air planes because they are made of metal.

Cartel = collusion = price fixing = illegal
Monopoly = price fixing = illegal

Monopoly =/= Cartel

To suggest a monopoly stifling innovation for decades is acceptable because it will probably fall some day is silly.

Not sure your analogy quite fits. Please refer to the part where I said "pretty much same shit".
focus on the "pretty much"
I think a better analogy would be a tabby cat and a lynx. While both are not the same, they are in the ballpark.

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As for the "pretty much the same shit", I thikn you guys are on the same page. Basic economics - in order to make an economic profit, you need to find a way to have pricing power.

Ultimately, there are only 2 ways to do this:
1. Manipulation
2. Innovation

#2 is in the spirit of capitalism, #1 is not.
Monopolies, price fixing, cartels, whatever you call it - generally make their money via #1.

Wait a sec.

Cartel = collusion = price fixing = illegal
Monopoly = price fixing = illegal
Cartel = collusion = price fixing = Monopoly = price fixing
Monopoly = collusion
collusion = price fixing
price fixing = monopoly = cartel = collusion
illegal = illegal
1=1

Hmm.

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This thread brought to you by a tremendous dickhead!

Monopoly =/= collusion.