If a company can become a monopoly (without government protection) - why is this bad?
If they can produce a better product at a lower price than the competition, this is good for the economy question mark?
As soon as they try to abuse position a new company would just come in and drink their milkshake?
Having a monopoly position in the market distorts market dynamics and is anti free market. It also is dangerous because the organizations that achieve monopoly status are always pyramidal corporatist hierarchies that inevitably abuse their position of monopoly power.
In a similar way that we can expect centralized state monopoly power to inevitably be abused too.
I understand this is conventional wisdom but what is the mechanism to actually abuse the market?
As long as a new company can come and compete, I don't see how any abuse can be sustained
Thats the thing imo, there is no actual competition due to the abuse of the market through the monopoly’s price fixing, threats, and intimidation of smaller competitors. The monopoly will inevitably die but for the same reason why all Empires eventually die, it is due more to self-inflicted wounds than to a rising competitor.
Monopoly doesn’t happen because of organic free market competition. I don’t believe you can obtain and keep a monopoly position without price fixing, intimidation, and violence in many cases. I can’t think of an example where the monopoly power didn’t do any of those things. Most monopolies are state sponsored also and would not exist if it wasn’t for the state sponsorship.
As I understand it, whomever holds a monopoly can artificially lower prices (operating at break-even, or even a loss) in order drive out new competitors who can't afford to sell that low.
In a hyperbcoinized future, MicroStrategy could offer it's services for free by drawing from its practically bottomless treasury. After the competition has been driven out of the market, prices can return to normal, or higher, to recover the losses.
Microstrategy is bringing the imbalance of the fiat world into the future bitcoin world.
MSTR are counting on an economy where derivatives of bitcoin will be used like bitcoin, so that they can loan it out without selling it. Probably also explains Saylor's partiality towards the dollar and lack of interest in layer 2's like lightning.
But an advanced economy using hard money has much less need for debt, as saving becomes an effective strategy once again for building businesses and wealth.
The practice of burning bitcoin to establish a monopoly may work for a while, but will ultimately fail in a hard money world.
In a free market, the top priority of any business should be to become a monopoly.
It’s doubtful they will succeed but if they do, then it must be for a reason.
With that said, this only works in a truly free market that also includes informed buyers.
The reality is that most markets are manipulated by the government and most buyers are not informed.
đź’Ż
Nothing wrong with an organic monopoly without government. It's possible to protect trade secrets without the competition figuring it out.
Surely all the logical free market arguments are good on paper but as we’ve never truly had free markets, its hard to know what would play out considering human action and incentives
Monopolies are made by proximity to the money printer and the government's war chest. There are no exceptions to this in the modern economy.
Try telling that to Michael Saylor haha
