[bdw5204]

Whenever there's something that looks like a market failure, there's almost always a governmental grant of monopoly privilege or some government regulation to prevent competition.

Why are prescription drugs unaffordable? Because of a grant of monopoly privilege called "patents" that allow a company to monopolize a drug for around 2 decades. Why is health care so expensive? Because the government subsidizes employer provided insurance through the tax code so nobody cares about controlling medical costs. Why is housing so expensive? Because local governments literally make it illegal to build housing infringing on the private property rights of landowners with idiotic "zoning" laws and by doing things like declaring run down parking lots to be "historic" parking lots that must be preserved. Why is the labor market so skewed against labor and in favor of capital? Because numerous government laws make it harder to start businesses than it should be and also because government subsidizes employers providing "benefits" through the tax code. Why did the railroads collapse and most of the US become dependent upon cars? Because the government regulated the railroads to death with the Interstate Commerce Commission and subsidized both cars and car infrastructure. You can keep going on and on with examples but the answer is almost always something that the government did to screw up the market.

[nicoburns]

While this can be the case, numerous of the examples you have given (medical costs and the labor market to name two) have fewer problems in countries with much stronger government intervention/regulation.

If your government creates poor regulations then maybe that should be tackled directly (by electing less incompetent/corrupt officials) rather than concluding that regulation itself is bad.

[dmix]

Most of those countries such as Canada made certain markets like health insurance public, where it was deemed for the publics benefit not to be run for profit as there's far too many externalities and moral issues. We made the same choice with police and public attorneys. Sometimes, in very rare cases usually invoking peoples health and safety, it makes sense for it to be public.

What doesn't make sense to me is that massive meddling western governments do to prop up these monopolies. Copyright is a perfect example. Or just look a Boeing in 2024 or many Wall St orgs after 2008, special treatment and artificial barriers to completion is a huge and ever growing problem.

And these debates always just dismissed and downplayed because all context gets thrown out and it turns into vague gov regulations vs markets fights, as we see here in this thread.

The cyberpunk future of megacorps ruling the planet will be the result of gov interference in the vast majority of cases. And only a small amount due to lack of any monopoly antitrust enforcement. But both have the same root cause of forever expanding gov technocracy->megacorps define the rules and buy politicians->no one wins.

[bdw5204]

I'm actually in favor of some government intervention to fix the mess it created or where that is politically more plausible than a free market solution. Antitrust action to break up large companies would be great as would banning non-competes and addressing the culture of companies requiring absurd numbers of interviews to get a job. I also favor regulations to stop fraud such as making it illegal for airlines to sell more seats on a plane than they have.

In medical care, I'd prefer a Singapore style system where the government covers catastrophic care but you have a savings account for everything else. I think that's more viable than a pure free market because a college student who comes down with cancer or gets shot in this very high crime country probably can't afford to pay out of pocket for medical care. Likewise with somebody who gets laid off because their employer wants to increase its stock price.

In general though, I like that we have had significantly higher economic growth than European countries over the past generation and want it to stay that way. So I prefer libertarian solutions over socialist solutions wherever possible.

[tzs]

For IP there is a market failure if you don't have government regulation. IP is non-rival and non-excludable, and non-rival non-excludible goods don't really work well with free markets.

There are three general ways to address that. (1) Ignore it, which tends to lead to underproduction. (2) Have the government pay for production of IP, which becomes public domain. The downside of this approach is the government has to decide which IP to pay for. (3) Give IP the necessary properties by law for it to work well with a free market. This can fix the underproduction problem but does result in underconsumption.

It might be possible to address the issue in (2) of the government deciding what gets funded. One common suggesting is to fund production through a tax on something that tends to correlate with consumption such as internet access. The money from the tax would fund creation, with the money a work earns going up the more it is downloaded. There'd have to be something to deal with cheating though.

[bdw5204]

I think there's a case for short term copyrights (28 year terms or less) but I don't think patents are necessary for innovation. You generally can't stop people from copying your food products but we still have a ton of new foods on a regular basis because inventing new food is lucrative even without a government monopoly. The extreme competition and the ability of grocery stores to come out with a store brand copycat keeps big food honest and prices low. Recently, many people have started buying store brands instead of name brands which is why there are tons of signs at the grocery store about price reductions these days.

I do think it'd be hard to make sufficient money to fund a video game or a movie without copyright because they are inherently non-scarce goods once created that can be copied at effectively zero cost. I don't think it matters for books, most of which don't make money for their authors anyway. I also don't think it matters for music because the money there is from live performances and people only care about Taylor Swift's songs because she's singing them.

If we got rid of copyright, government could subsidize the production of works that would be copyrighted by creating a UBI and/or returning to the old norm of a single income household. Many people already create these kinds of works for free and/or ask for donations.

The FOSS community, which only uses copyright law (in the case of GPL) to force FOSS code to stay FOSS or (in the case of MIT) to require attribution, illustrates what the software industry would look like without copyright. Some people, including myself at one point, even work for companies writing FOSS code. Most software companies already make money by selling support contracts, cloud services or ads rather than from selling licenses to copyrighted software so fully abolishing copyright would have surprisingly little impact on tech.

[falcolas]

You say that as if corporations don't have a greater ability to screw up the free market so completely.

Why doesn't Disney have meaningful competition? Because they bought them. (Also applies to health care. PE firms buying up everything has hurt us a lot.)

Why don't other just-shy-of-monopoly streaming companies lower their prices to take Disney's customers? Monopolies over streaming rights for shows and back-room deals.

Why don't customers take them to court? Binding arbitration clauses in the click-wrap contracts. (This also applies to your housing problem, by the way - the free market can not work when there is collusion. And that's not my assertion, that's economists' take on the effects of collusion.)

I'm pretty sure this isn't the government who has fucked this up for us customers, it's the corporations. In fact, I'd go so far to say that the weakening of anti-trust enforcement in the Regan era and the polarization of the FTC and other administrative agencies is what allowed this kind of collusion, copyright abuse, and monopoly formation.

EDIT: I'd also ask one further question: Why is the government taking any action in big company's favor? I posit that it's due to the the companies taking semi-legal actions with the legislators who can make laws. Why are the actions legal? Because of prior illegal actions - more back-room deals - no doubt.