Poker and the Centralization of Economic Control

[Dean]

In poker,* those who have enough capital can consistently pay to see the flop**, thereby acquiring more information in regards to the value of their hand, and achieving a more strategic economic standing. Between those who can almost always see 5 of the 7 possible cards, versus those who can only afford to see their first two cards, the former have a distinctly empowered position simply by nature of their owned capital.

This means, in very simple terms, that those who have more capital, have more means at their disposal to maintain their own base of wealth, and subsequently more chances to continue the trend of the centralization of wealth and economic power.

This is played out routinely in terms of media, political and economic capital which serve similar functions - everything from advanced market strategies to comprehensive data on the consumer and laborer populations.

In other words, the value of a piece of currency is fundamentally tied into your standing in terms of economic relations and acquisition of economic power in general. A dollar is more valuable, potent and efficient when wielded by an entity with more capital to invest.

Understanding this, capitalism is therefore unmasked as a system inherently centralizing and non-responsive to its constituency, even in terms of earned income, since again, we have seen that the assets of an efficient capitalist firm will have much more leverage, leeway and ultimately material return on investment per-capita than any atomized or wide-spread representation of basic human society and function (that is, the masses of the world who make up constituent communities of laborers, consumers and the like).

In other words, production and consumption to the end of populist human needs will always flounder and fail in an efficient capitalist economy. The centralization of economic power creates a self-perpetuating echelon of economic entities, and these entities are no longer tied to models of production and distribution which seek popular, expanding consumer benefit, but rather narrow, hyper-efficient consumption.

This means in the most basic terms that capitalism works primarily for the entitled (in terms of salable and/or practicable capital), and to engage in this kind of market without that entitlement will always result in acute economic mis-representation and exploitation.


(notes added to those unfamiliar with Texas-hold-em rules)

*a game wherein cards are dealt between rounds of betting, each round with more information available to the players to make rational choices (to call (match monetarily) others bets to stay in the game and see the next card or cards dealt). Different combinations dictate the winning player

**the first three community cards in Texas Hold-Em

[Havet]

How much money did you lose which propelled you to make this thread?

[ldo]

just tighten your range, 3-bet and/or shove

[The Idler]

Everybody puts in the same, but most come off worse.

[Havet]

You guys surely realize that Poker is a zero-sum game, while the economy is not (http://en.wikipedia.org/wiki/Zero-sum#Economics), right? I mean, that's Economics 101...:rolleyes:

[Jazzratt]

Next reply that's either spam about poker itself rather than related to this analogy gets you a verbal warning and spankies.

[Dean]

You guys surely realize that Poker is a zero-sum game, while the economy is not (http://en.wikipedia.org/wiki/Zero-sum#Economics), right? I mean, that's Economics 101...:rolleyes:

You also can't make big by getting particularly lucky in our economy, though you can in poker. Only one portion of the poker system was being used for my purposes.

You right-wingers love to talk about "not-zero-sum" as if its some kind of defense, that it somehow exonerates explicit systems of exploitation because "well some wealth is being produced." While that claim is not completely accurate (the economy is neither zero-sum nor completely productive of new wealth) it is largely irrelevant to this post.

[Havet]

You also can't make big by getting particularly lucky in our economy, though you can in poker. Only one portion of the poker system was being used for my purposes.

Its not about getting lucky, its about being smart. That said, in the present economy, luck is certainly a factor, but in a freer, more equal economy, ability is more important than luck.


You right-wingers love to talk about "not-zero-sum" as if its some kind of defense, that it somehow exonerates explicit systems of exploitation because "well some wealth is being produced." While that claim is not completely accurate (the economy is neither zero-sum nor completely productive of new wealth) it is largely irrelevant to this post.

Its irrelevant because you say so? Right...

[Dean]

Its not about getting lucky, its about being smart. That said, in the present economy, luck is certainly a factor, but in a freer, more equal economy, ability is more important than luck.
Its about having the capital to invest efficiently. That said, what does it matter if its luck, ability or industriousness? The centralization of wealth is a very clear phenomenon under capitalism, and you're not providing any contrary argument (except some idealist silliness about how "equality" will provide for more equitable economic systems - how are we to enforce your "equality" now, hayenmill?).




Its irrelevant because you say so? Right...

Its irrelevant largely because you have not provided any clear argument to its relevance. I'm not here to babysit you with smug one-liners. Provide a clear, contrary argument if you want me to take you seriously.

[Havet]

Its about having the capital to invest efficiently. That said, what does it matter if its luck, ability or industriousness? The centralization of wealth is a very clear phenomenon under capitalism, and you're not providing any contrary argument (except some idealist silliness about how "equality" will provide for more equitable economic systems - how are we to enforce your "equality" now, hayenmill?).

And how the hell do you suppose one gains the capital? its either luck, ability or industriousness...

I've never denied that centralization of wealth is a very clear phenomenon under capitalist. In fact, I believe I am abler to prove that than you. I don't understand why you think it is necessary to continue with strawmen by pretending that I am defending capitalism.


Its irrelevant largely because you have not provided any clear argument to its relevance. I'm not here to babysit you with smug one-liners. Provide a clear, contrary argument if you want me to take you seriously.

You made the accusation, you support it. If I were to follow your "logic", it could be equated with a Christian claiming that it is I, the atheist, who has to provide an argument against the belief in God, when it was him, the christian, who initially made the statement that God exists.

[Dean]

If capitalism is increasingly centralizing, I don't see how any self-proclaimed "anarchist" of any stripes can defend it.

[Havet]

If capitalism is increasingly centralizing, I don't see how any self-proclaimed "anarchist" of any stripes can defend it.

I'm not defending capitalism. Can we move on now, please?

[Bud Struggle]

Its not about getting lucky, its about being smart. That said, in the present economy, luck is certainly a factor, but in a freer, more equal economy, ability is more important than luck.


Just to butt in: As far as making money from nothing: it is about being smart to an extent, and luck always helps--but in the end making large amounts of money is a knack. Like the ability to sing or paint a picture or to dance well. Like being handsome or beautiful--some people have the ability and some don't. That's not to say that there aren't techniques that are invaluable to making large amounts of money--self control being first among these. Conservative spending and investment habits. Have it available, but don't use credit. SAVING, SAVING, SAVING--no matter how much or how little you make: SAVE. And giving, to manage money well you have to be able and prepared to give chunks of it away. It's the stuff I teach my kids--I don't want them to be trust fund babies--I want then to be productive members of society and use their money wisely.

For the most par it is not difficult to make some real money (at least in the good old US of A) but few people want to or do work at it.

[Dean]

I'm not defending capitalism. Can we move on now, please?

Sure. Lets get back to the point. That is, do you have any serious criticism of my initial points? Because I'm wholly confused as to what the point of your posts in this thread were - you got incredibly defensive when I pointed out that the "zero-sum" issue (as well as luck) as they are expressed in poker are not fundamentally relevant to the analogy - that is, that if poker was a totally strategic game with dynamic currency, the same systems I described would still manifest.

If you don't have a problem with this, I don't see where we differ (at least in terms of my original argument). But to be frank, I feel like you either think
A. that your own ideology would result in the same stratification of wealth as I described above or
B. that you feel the need to defend centralizing modes of private property in general
otherwise, it is utterly confusing to me why you responded as you did throughout the thread.

In short: what do you have to say about the centralization of wealth under undemocratic forms of economic control?

If this question isn't relevant to what you believe in (or even just what you want to discuss) then feel free to ignore the whole thread. Clearly it didn't concern your values in the first place. But, again, this leaves me very confused at the whole dialogue so far - I guess you thought I was talking about something else in my OP?


Just to butt in: As far as making money from nothing: it is about being smart to an extent, and luck always helps--but in the end making large amounts of money is a knack. Like the ability to sing or paint a picture or to dance well. Like being handsome or beautiful--some people have the ability and some don't. That's not to say that there aren't techniques that are invaluable to making large amounts of money--self control being first among these. Conservative spending and investment habits. Have it available, but don't use credit. SAVING, SAVING, SAVING--no matter how much or how little you make: SAVE. And giving, to manage money well you have to be able and prepared to give chunks of it away. It's the stuff I teach my kids--I don't want them to be trust fund babies--I want then to be productive members of society and use their money wisely.

Bud, you're missing a very important point here (which I raised, though I wasn't very explicit): the empowerment of capital relies on the acquisition of services such as legal, public relations and marketing consultancy. This is precisely why we see many "overnight-rich" people like celebrities squander their savings away. But anyone/thing with a basic grasp of financial strategy - be it from sound upbringing, rudimentary consultation, or other common tactics - will absolutely benefit more or less solely as a result of greater capital reserves.

That is to say, the "knack" you speak of really only applies insofar as those provisions of capital are already available, and not as a fundamental driving force for the typical capitalist entity.

That said, I do understand that the manipulation of any system-be it capital or otherwise- is a distinct characteristic of human ingenuity, but of course even if this were the general tendency for these phenomena, it would fail to address my point, that is that the centralized control of capital leads to more and more acute manifestations of the same.


For the most par it is not difficult to make some real money (at least in the good old US of A) but few people want to or do work at it.
This is actually quite measurable, and the measurements provide a totally different conclusion. That is, firstly, that the US is incredibly stratifying, and compared to European nations, social mobility is much worse in the US (that is, if you are born into a given class in the US, you're more likely to stay in that class).

Furthermore, there are two different kinds of "making some real money" we can talk about in terms of a capitalist economy. That is, the ability for atomized individuals to make accrue lots of capital, versus the ability for the working and consumer classes (even just in terms of individuals) to accrue and maintain steadily securer, empowered economic positions. I think it has been made very clear, at least since the 1970s, that the working class no longer has the means for widespread advancement of prosperity. Only by measuring atomized, individual cases could one possibly reach the conclusion that our economy is fundamentally "free and individually-defined."

However, individual freedoms are a mockery if they are only viable for a select few individuals. And of course, nothing speaks more strongly to this issue than the statistical tendency of working class economic power. That is, the real buying power of the US working class has steadily declined since the 70s, and "individual economic empowerment" must be understood precisely in these terms.

[Havet]

Sure. Lets get back to the point. That is, do you have any serious criticism of my initial points? Because I'm wholly confused as to what the point of your posts in this thread were - you got incredibly defensive when I pointed out that the "zero-sum" issue (as well as luck) as they are expressed in poker are not fundamentally relevant to the analogy - that is, that if poker was a totally strategic game with dynamic currency, the same systems I described would still manifest.

I still find it illegitimate to equate a complete zero-sum game with a mixed zero-sum/non-zero-sum real economy. It's only a matter of what arguments to use, forgive me if I did not express that properly.


A. that your own ideology would result in the same stratification of wealth as I described above or

I don't


B. that you feel the need to defend centralizing modes of private property in general

I just feel the need to clarify how to best attack the concept of capitalism, and that a poker example is not exactly the best.


In short: what do you have to say about the centralization of wealth under undemocratic forms of economic control?

It happens, and the system increases the repercussions of that fact.

[Dean]

I still find it illegitimate to equate a complete zero-sum game with a mixed zero-sum/non-zero-sum real economy. It's only a matter of what arguments to use, forgive me if I did not express that properly.
...
I just feel the need to clarify how to best attack the concept of capitalism, and that a poker example is not exactly the best.
I was equating certain phenomena within the game whose manifestation don't rely on the game's character as zero-sum.

It is therefore confusing why you would continue to focus on that one aspect (that is, the obtuse point that I'm "equating poker and economics," which I am explicitly refusing to do) instead of discussing the finer points of the post.

In terms of that specific phenomenon, you actually endorse my point:


It happens, and the system increases the repercussions of that fact.

So I guess that entire tangent was completely unnecessary.

[Havet]

(that is, the obtuse point that I'm "equating poker and economics," which I am explicitly refusing to do) instead of discussing the finer points of the post.

Really? What's this then:


This means, in very simple terms, that those who have more capital, have more means at their disposal to maintain their own base of wealth, and subsequently more chances to continue the trend of the centralization of wealth and economic power.

Here you are explicitly equating poker with economics, and the only link you give to bridge the gap is the fact that one gains capital (in both systems) at the expense of someone else, or by preventing others from having the same opportunity - definition of zero-sum game.

[IcarusAngel]

Economics and politics is not all "non-zero sum."

And wealth creates more wealth in capitalist systems. This is well known in "economics 101" but it's also known in "politics 101" that you can coerce and infringe on the rights of others if you have a vast amount of resources. For example, Microsoft was found guilty in the 1990s of bullying competitors and engaging in anti-competitive practices.

In a game of poker or Texas Hold 'em there is at least a chance that the top guy can lose his power even with his advantages, if the other player gets lucky or deploys an effective strategy. I don't play either one of them, but I'm willing to bet that this happens more than the large corporations in our country are placed by another large corporation. Furthermore, you can opt-out of a game, and that's what many people do when they know their down. They have the freedom to "fold" like in poker - no such freedom exists in capitalism.

When the rich control all the resources, it prevents me from being able to use them and have access to them. I may even have better ideas, and most people may even agree that I have, say, a better energy solution. But I can't implement because I have no control over the car companies or oil companies. People buy the cars because people have to have cars to get around, not because they agree with everything the car company is doing.

So, if anything, the analogy is too generous to the capitalists, but is actually a good reason why the government has to reign in the abuses of the corportists in the free-market.

The free-market has failed society. What we need are self-powered worker-controlled coops where capital is shared equally amongst all the developers - the harder you work, the more you get from the coop. That's the "incentive."

[Dean]

Really? What's this then:



Here you are explicitly equating poker with economics, and the only link you give to bridge the gap is the fact that one gains capital (in both systems) at the expense of someone else, or by preventing others from having the same opportunity - definition of zero-sum game.

I'm comparing betting in poker to the means that capital has at its disposal - propaganda, legal and political posturing and data sets including but not limited to consumer information, buying habits, as well as other forms of market research. Clearly, economic actors with less capital do not have these means at their disposal, and therefore cannot use their capital as effectively.

I don't see why I have to repeat everything to you. This is getting to be absurd.

[RGacky3]

And wealth creates more wealth in capitalist systems.

I've been trying to get that simple most logical truth through to hayenmill for so long now.

And hayenmill, just because you call it something else does'nt mean its not Capitalism.

[Havet]

I've been trying to get that simple most logical truth through to hayenmill for so long now.

And hayenmill, just because you call it something else does'nt mean its not Capitalism.

Even if that something else doesn't rely on the exploitation of one's labor? Right...:rolleyes:

[Dean]

Even if that something else doesn't rely on the exploitation of one's labor? Right...:rolleyes:

The question is, what mechanisms does your proposed market economy employ which would counter this trend? To be honest, I don't know exactly what you support (mutualism?) so when you came into this thread with defensive-style posts, I was very confused.

If you are proposing some market system, and you want that to be a part of this discussion - that is a discussion about the centralization of wealth in market economies - you should actually show how your proposal would not perpetuate class stratification.

I certainly welcome your opinions on either issue, but going on the defensive when I attack capital when create a confused argument if you don't, in fact, defend capital. And of course if you want to repeatedly make the point that your idea transcends this phenomenon of economic centralism, by all means, indulge us. I'm always very interested in different theories on market anarchism, and as a libertarian communist, there will always be some overlap in terms of ideology and ideals.

I really wish you wouldn't post caustic one-liners, though. I made the thread with the hopes that people could have productive discussion on the topic...

[Havet]

The question is, what mechanisms does your proposed market economy employ which would counter this trend? To be honest, I don't know exactly what you support (mutualism?) so when you came into this thread with defensive-style posts, I was very confused.

If you are proposing some market system, and you want that to be a part of this discussion - that is a discussion about the centralization of wealth in market economies - you should actually show how your proposal would not perpetuate class stratification.

I certainly welcome your opinions on either issue, but going on the defensive when I attack capital when create a confused argument if you don't, in fact, defend capital. And of course if you want to repeatedly make the point that your idea transcends this phenomenon of economic centralism, by all means, indulge us. I'm always very interested in different theories on market anarchism, and as a libertarian communist, there will always be some overlap in terms of ideology and ideals.

So you want me to explain how mutualism will not allow for massive centralization of wealth? Simple. Because every single enterprise which achieved such level of centralization was caused by forceful action of an institution with the monopoly of force - the State (http://www.mutualist.org/id10.html).


I really wish you wouldn't post caustic one-liners, though

Don't forget to say that to IcarusAngel as well

[SocialismOrBarbarism]

So you want me to explain how mutualism will not allow for massive centralization of wealth? Simple. Because every single enterprise which achieved such level of centralization was caused by forceful action of an institution with the monopoly of force - the State (http://www.mutualist.org/id10.html).

While you can obviously make connections between centralization and state monopoly, I don't see how you could quantify exactly how much of a distorting effect it is. Unless you can, all you have is estimations, certainly bias, of how much your society would differ from current capitalism.

[Havet]

While you can obviously make connections between centralization and state monopoly, I don't see how you could quantify exactly how much of a distorting effect it is. Unless you can, all you have is estimations, certainly bias, of how much your society would differ from current capitalism.

All you communists have are estimations as well

[SocialismOrBarbarism]

All you communists have are estimations as well

Yours is a qualitative adjustment, retaining the same economic categories as capitalism. Communism totally transcends capitalism.

[Havet]

Yours is a qualitative adjustment, retaining the same economic categories as capitalism. Communism totally transcends capitalism.

There's no adjustment about eliminating privilege.

[Dean]

So you want me to explain how mutualism will not allow for massive centralization of wealth? Simple. Because every single enterprise which achieved such level of centralization was caused by forceful action of an institution with the monopoly of force - the State (http://www.mutualist.org/id10.html).

Can you provide either
-examples of such monopolies
-your own explanation of how these systems work
- a shorter article explaining the same.

I'm not going to read that whole article, but I am interested in a debate. But you can't link to a massive work and expect me to read the whole thing for purposes of one thread. Besides, if you seriously believe the article (and aren't using it as a backup for a predetermined ideological attitude) you should be able to provide your own arguments, and explanations for them, which will undoubtedly be more succinct and relevant to the discussion.


Please keep in mind that the state is intimately involved in all capitalist enterprise, but so is capital. Therefore, any claim that the state is the sole creator of monopolies must be backed by explanations of specific state involvement, how those involvements culminated in the creation of the monopoly, and any indication as to why a free, capitalist enterprise wouldn't want to become a monopoly.

Really, why compulsion is there for an efficient capitalist enterprise (such as Microsoft) to not maintain a monopoly? And if you agree that the compulsion is there, what achilles heel does the monopolistic system have?

Furthermore, what makes monopolies the deciding factor in economic centralization? This would only serve the purposes of our discussion if you thought that mutualism consistently decentralized all economic structures. How does it, then?



Don't forget to say that to IcarusAngel as well
If he starts doing that to me, I'm sure I'll say something.

[Havet]

Can you provide either
-examples of such monopolies

Sure:

Standard Oil (http://www.dadyer.com/Economic%20Readings/witchhunting%20for%20robber%20barons.htm)
Wal-mart (http://www.walmartsubsidywatch.org/)
Microsoft (http://mises.org/journals/jls/15_2/15_2_1.pdf)


-your own explanation of how these systems work

It's really simple: businesses who want to increase profits bribe politicians to pass out regulation and legislation to decrease competition and/or raise the barriers to entry/exit, or by lobbying and receiving direct tax money in the form of subsidies.


- a shorter article explaining the same.

This (http://invisiblemolotov.wordpress.com/2009/04/14/austrian-marxist-theories-of-monopoly-capital/) is the best that I could find. But I would strongly recommend reading the whole article to the extent possible, given that it has several historical facts, as well as a strong marxist influence.


Really, why compulsion is there for an efficient capitalist enterprise (such as Microsoft) to not maintain a monopoly? And if you agree that the compulsion is there, what achilles heel does the monopolistic system have?

Achilles? Why none. That is the problem. It just keeps on sucking in money taken from taxpayers, by force, and then it is not made accountable for it. I agree with IcarusAngel on this regard (if he's out there, listening...). If a business receives money from the public, it should be accountable to the public.




Furthermore, what makes monopolies the deciding factor in economic centralization? This would only serve the purposes of our discussion if you thought that mutualism consistently decentralized all economic structures. How does it, then?



Monopolies, or artificially big business, are the deciding factor because they are able to extract surplus value from labor by using direct compulsory force through the State. Mutualism "consistently decentralizes all economic structures" because it seeks to destroy the state-privilege and install equality of opportunity. By destroying state-privilege, and allowing for direct accountability, direct democracy, market forces, whatever you want to call it, you make it impossible for any entity to naturally centralize resources to a point where they could restrict equality of opportunity.

[Havet]

Anyway, i'm NOT done talking about poker.

The whole posit is that its unfair because those who already have money are at an advantage is bollocks because someone can go from 0 to 10,000 (http://www.fulltiltpoker.com/chris-ferguson-challenge).

Fuck it, the whole POINT OF THE GAME is that you play with people who have similar money to you so that they dont have an advantage.that's why there is set buy ins

[Dean]

Monopolies, or artificially big business, are the deciding factor because they are able to extract surplus value from labor by using direct compulsory force through the State. Mutualism "consistently decentralizes all economic structures" because it seeks to destroy the state-privilege and install equality of opportunity. By destroying state-privilege, and allowing for direct accountability, direct democracy, market forces, whatever you want to call it, you make it impossible for any entity to naturally centralize resources to a point where they could restrict equality of opportunity.

This is all fundamentally reliant on one particular myth - that is that state privilege is the only method by which centralization of wealth can occur. But your first linked article provides another vehicle for centralization of wealth:


Regarding Standard Oil’s chief executive, one noted historian writes, “He (Rockefeller) iron-handedly ruined competitors by cutting prices until his victim went bankrupt or sold out, whereupon higher prices would be likely to return.”[1 (http://www.dadyer.com/Economic%20Readings/witchhunting%20for%20robber%20barons.htm#1)]

It is further important to note that we are not simply talking about monopolies, but all structures which, relying solely on the heightened market share or possession of capital, provide for more efficient methods of accrual of capital and other economic powers.


Where does your mutualism, by "[seeking] to destroy the state-privilege and install equality of opportunity" actually accomplish this? It is all good and well to say that you seek to end economic centralism, but the point is to place in power a state of economic relations which will actively combat the tendency for free-market competition to increasingly centralize, and subsequently represent smaller and smaller portions of society.

You've taken the first step, that is to accept that we should end centralized economic systems. But the next step is to find material systems and conditions which lend themselves to such decentralization. By saying that mutualism is ideologically supportive of such measures merely provides an idealism. And, as you know, idealism is abstract, disconnected from extant systems in human society. What systemic attributes does mutualism manifest which would lead to decentralization?

And if you think that economic centralism wouldn't occur under a "state-less" market (and subsequently, that abolition of the state would simply accomplish this aforementioned goal), I think you are far too deluded and attached to fantastical, immaterial idealism for us (or any of your discussion partners) to have any serious dialogue on the topic. Your (apparent) inability to understand, for instance, how competitive security firms (probably the best definition for a state after all!) can lead to centralized, hierarchical structures really underlines how detached you are from the economic systems in place today.


Anyway, i'm NOT done talking about poker.

The whole posit is that its unfair because those who already have money are at an advantage is bollocks because someone can go from 0 to 10,000 (http://www.fulltiltpoker.com/chris-ferguson-challenge).

Fuck it, the whole POINT OF THE GAME is that you play with people who have similar money to you so that they dont have an advantage.that's why there is set buy ins
This really underlines where we differ. Firstly, I don't think poker becomes unfair until one person can amass large sums of wealth. That could come about from any number of phenomena, and that is fundamentally irrelevant to the entire topic - that is, that increased wealth begets more of the same.

You think that "providing opportunities" is all that must be considered in terms of economic "justice." Communists, on the other hand, believe in promoting those modes of production that provide material benefit for the whole (or greater portions) of society. That someone "can go from 0 to 10,000" is quite immaterial to the physical outcome of economic systems.

Again, this is the disparity between idealism and materialism. Clearly, you have your head firmly planted in the sands of the former.

[Havet]

This is all fundamentally reliant on one particular myth - that is that state privilege is the only method by which centralization of wealth can occur. But your first linked article provides another vehicle for centralization of wealth:

It is further important to note that we are not simply talking about monopolies, but all structures which, relying solely on the heightened market share or possession of capital, provide for more efficient methods of accrual of capital and other economic powers.

You should have continued reading. The author was merely representing old, incorrect views on Standard Oil from the past, in order to prove the new, correct views which are more recent:

Predatory price cutting

Predatory price cutting is “the practice of deliberately underselling rivals in certain markets to drive them out of business, and then raising prices to exploit a market devoid of competition.”[10 (http://www.dadyer.com/Economic%20Readings/witchhunting%20for%20robber%20barons.htm#10)]

Professor John S. McGee, writing in the Journal of Law and Economics for October 1958, stripped this charge of any intellectual substance. Describing it as “logically deficient,” he concluded, “I can find little or no evidence to support it.[11 (http://www.dadyer.com/Economic%20Readings/witchhunting%20for%20robber%20barons.htm#11)]

In his extraordinary article, McGee scrutinized the testimony of Rockefeller’s competitors who claimed to have been victims of predatory price cutting. He found their claims to be shallow and misdirected. McGee pointed out that some of these very people later opened new refineries and successfully challenged Standard again.

Beyond the actual record, economic theory also argues against a winning policy of predatory price cutting in a free market for the following reasons:

1. Price is only one aspect of competition. Firms compete in a variety of ways: service, location, packaging, marketing, even courtesy. For price alone to draw customers away from the competition, the predator would have to cut substantially—enough to outweigh all the other competitive pressures the others can throw at him. That means suffering losses on every unit sold. If the predator has a war-chest of “monopoly profits” to draw upon in such a battle, then the predatory price cutting theorist must explain how he was able to achieve such ability in the absence of this practice in the first place!

2. The large firm stands to lose the most. By definition, the large firm is already selling the most units. As a predator, it must actually step up its production if it is to have any effect on competitors. As Professor McGee observed, “To lure customers away from somebody, he (the predator) must be prepared to serve them himself. The monopolizer thus finds himself in the position of selling more—and therefore losing more—than his competitors.”[12 (http://www.dadyer.com/Economic%20Readings/witchhunting%20for%20robber%20barons.htm#12)]

3. Consumers will increase their purchases at the “bargain prices.” This factor causes the predator to step up production even further. It also puts off the day when he can “cash in” on his hoped-for victory because consumers will be in a position to refrain from purchasing at higher prices, consuming their stockpiles instead.

4. The length of the battle is always uncertain. The predator does not know how long he must suffer losses before his competitors quit. It may take weeks, months, or even years. Meanwhile, consumers are “cleaning up” at his expense.

5. Any “beaten” firms may reopen. Competitors may scale down production or close only temporarily as they “wait out the storm.” When the predator raises prices, they enter the market again. Conceivably, a “beaten” firm might be bought up by someone for a “song,” and then, under fresh management and with relatively low capital costs, face the predator with an actual competitive cost advantage.

6. High prices encourage newcomers. Even if the predator drives everyone else from the market, raising prices will attract competition from people heretofore not even in the industry. The higher the prices go, the more powerful that attraction.

7. The predator would lose the favor of consumers. Predatory price cutting is simply not good public relations. Once known, it would swiftly erode the public’s faith and good will. It might even evoke consumer boycotts and a backlash of sympathy for the firm’s competitors.

In summary, let me quote Professor McGee once again:

Judging from the Record, Standard Oil did not use predatory price discrimination to drive out competing refiners, nor did its pricing practice have that effect. Whereas there may be a very few cases in which retail kerosene peddlers or dealers went out of business after or during price cutting, there is no real proof that Standard’s pricing policies were responsible. I am convinced that Standard did not systematically, if ever, use local price cutting in retailing, or anywhere else, to reduce competition. To do so would have been foolish; and, whatever else has been said about them, the old Standard organization was seldom criticized for making less money when it could readily have made more.[13 (http://www.dadyer.com/Economic%20Readings/witchhunting%20for%20robber%20barons.htm#13)]

Where does your mutualism, by "[seeking] to destroy the state-privilege and install equality of opportunity" actually accomplish this? It is all good and well to say that you seek to end economic centralism, but the point is to place in power a state of economic relations which will actively combat the tendency for free-market competition to increasingly centralize, and subsequently represent smaller and smaller portions of society.

There is no such thing as a tendency for free-market competition to increasingly centralize on a massive scale. There is no historical proof of such claim. If there is i'd like to see it.


You've taken the first step, that is to accept that we should end centralized economic systems. But the next step is to find material systems and conditions which lend themselves to such decentralization. By saying that mutualism is ideologically supportive of such measures merely provides an idealism. And, as you know, idealism is abstract, disconnected from extant systems in human society. What systemic attributes does mutualism manifest which would lead to decentralization?

cost principle (http://www.mutualist.org/id106.html), competition [1], absence of exploitation (http://www.infoshop.org/page/AnarchistFAQSectionG1), absence of privilege (http://www.panarchy.org/swartz/mutualism.5.html)

[1]: Tandy, Francis D., 1896, Voluntary Socialism (http://en.wikipedia.org/wiki/Voluntary_Socialism), chapter 6, paragraphs 9, 10 & 22.
Carson, Kevin, 2004, Studies in Mutualist Political Economy, chapter 2 (after Meek & Oppenheimer).

And if you think that economic centralism wouldn't occur under a "state-less" market (and subsequently, that abolition of the state would simply accomplish this aforementioned goal), I think you are far too deluded and attached to fantastical, immaterial idealism for us (or any of your discussion partners) to have any serious dialogue on the topic. Your (apparent) inability to understand, for instance, how competitive security firms (probably the best definition for a state after all!) can lead to centralized, hierarchical structures really underlines how detached you are from the economic systems in place today.

Who said security needs to be run for profit?


This really underlines where we differ. Firstly, I don't think poker becomes unfair until one person can amass large sums of wealth. That could come about from any number of phenomena, and that is fundamentally irrelevant to the entire topic - that is, that increased wealth begets more of the same.

Fine. How do you explain the case of Chris Fergusson?


You think that "providing opportunities" is all that must be considered in terms of economic "justice." Communists, on the other hand, believe in promoting those modes of production that provide material benefit for the whole (or greater portions) of society. That someone "can go from 0 to 10,000" is quite immaterial to the physical outcome of economic systems.

Oh, its immaterial, is it? How do you explain that it actually happened? Was it a mysterious God of poker who helped him out (lulz)?

[RGacky3]

Even if that something else doesn't rely on the exploitation of one's labor? Right...:rolleyes:

Your absolutely for the wage system, you just don't call it exploitation.

[Havet]

Your absolutely for the wage system, you just don't call it exploitation.

There's no point in calling it exploitation if nobody's being exploited. Words have meanings, you know?

[Dean]

Why are you unable to link to any source which is not distinctly and firmly grounded in your own free-market ideology?

It is obvious that you will find state presence in all major firms, because the state seeks to maintain their hegemony by colluding with other large firms. But the same is true across the capitalist market. Simply put, you're using the presence of the state, just like libertarians, as some anathema to which you can point every time you feel like something might be condemning your market economy and how you think society should be laid out.

It's an incredibly obtuse idealism, and you're ideas are only rooted in mutualist / capitalist ideology. You aren't appreciating massive sectors of our economic echelon for what they are.

Furthermore, your continued inability to explain clearly, in your own words what makes mutualism so special leads me to the obvious conclusion that you don't, in fact, seriously believe these theories of material consequence, but rather must support them in the furtherance of your own narrow ideology.

This debate is a big joke, because you are hiding behind links which prove nothing more than your own ghettoized mindset. You neither interest yourself in serious analysis, nor materialist reason, instead focusing solely on idealism.

I don't have the energy to baby you anymore, and I think I understand what your detractors feel like here.

I have one final note, though: what you do is incredibly easy, and is common only among Machiavellian debaters. It takes a lot more energy and personal focus to actually develop a rigorous focus on the systems of state and economic power in society, and I encourage you to do that.

Basically, start reading investigative journalism.

[Havet]

Why are you unable to link to any source which is not distinctly and firmly grounded in your own free-market ideology?

It is obvious that you will find state presence in all major firms, because the state seeks to maintain their hegemony by colluding with other large firms. But the same is true across the capitalist market. Simply put, you're using the presence of the state, just like libertarians, as some anathema to which you can point every time you feel like something might be condemning your market economy and how you think society should be laid out.

It's an incredibly obtuse idealism, and you're ideas are only rooted in mutualist / capitalist ideology. You aren't appreciating massive sectors of our economic echelon for what they are.

Furthermore, your continued inability to explain clearly, in your own words what makes mutualism so special leads me to the obvious conclusion that you don't, in fact, seriously believe these theories of material consequence, but rather must support them in the furtherance of your own narrow ideology.

This debate is a big joke, because you are hiding behind links which prove nothing more than your own ghettoized mindset. You neither interest yourself in serious analysis, nor materialist reason, instead focusing solely on idealism.

I don't have the energy to baby you anymore, and I think I understand what your detractors feel like here.

I have one final note, though: what you do is incredibly easy, and is common only among Machiavellian debaters. It takes a lot more energy and personal focus to actually develop a rigorous focus on the systems of state and economic power in society, and I encourage you to do that.

Basically, start reading investigative journalism.

Basically, start providing arguments to YOUR claims, else there is no point in continuing this conversation. Everytime I post a source, it is deemed "irrelevant" simply because of the place it comes from. You provide proof of your statements. Show me a case of completely free-markets with equality of opportunity (or lack of privilege) creating monopolies.

[RGacky3]

There's no point in calling it exploitation if nobody's being exploited. Words have meanings, you know?

I understand, but wage labor is when someone else is profiting from someone elses labor, and the laborer is having his situation (not having the means to provide for himself) exploited by his boss so that he must work for less than the value of his labor, that way, there is profit for the boss. Thats exploitation.

You can call it something else, you can justify it anyway possible, but capitalism is capitalism, whether its teh state or something else enforcing it, and exploitation is exploitation, whether or not you consider the boss justified or the wage system justified.

[Dean]

Basically, start providing arguments to YOUR claims, else there is no point in continuing this conversation. Everytime I post a source, it is deemed "irrelevant" simply because of the place it comes from. You provide proof of your statements. Show me a case of completely free-markets with equality of opportunity (or lack of privilege) creating monopolies.

Why? You know that completely free markets simply don't exist, because private firms inevitably use force to their own ends, and become de facto (an eventually de jure) states. The formation of states occur when a social class or organization (be it rooted in capital, markets or representative politics) has and utilizes the means of force to impose their own will (working toward their interests, of course) on political and industrial economy. These organizations don't call themselves "security firms" or "market forces" because it is only their character (in terms of material and public opinion) as responsive to the public masses that can legitimize them.

It is very easy to see how force works directly toward the self interest of those who control it. It is also easy to see that competitive self interest directly results in capitalism (an economic model meant to solidify the power of a firm) and how such accrual of capital directly results in the usage of force to both defend capital, and provide greater and more hospitable markets.

In a competitive market, force provides an absolutely efficient mode of capital - in fact, your own inexhaustible examples of state force benefiting capital proves how indispensable the two are to each other!

[Havet]

I understand, but wage labor is when someone else is profiting from someone elses labor, and the laborer is having his situation (not having the means to provide for himself) exploited by his boss so that he must work for less than the value of his labor, that way, there is profit for the boss. Thats exploitation.

And i've always opposed this ever since I stopped being an "ancappie"

[Havet]

Why? You know that completely free markets simply don't exist, because private firms inevitably use force to their own ends, and become de facto (an eventually de jure) states.

Can you show evidence for this claim?

[Dean]

Can you show evidence for this claim?

Well, Let's consider an example you recently lauded: Kowloon Walled City (http://en.wikipedia.org/wiki/Kowloon_Walled_City) whose power vacuum (http://en.wikipedia.org/wiki/Power_vacuum)* invited members of the Triads (http://en.wikipedia.org/wiki/Triad_%28underground_society%29)** to take control.

Somalia and rural parts of Afghanistan and Pakistan are a few other examples who endured recent or present power vacuums.

*A state of any given region or social organization whose hierarchical structure has an absent upper echelon
**Organized underground criminal society

[Dean]

Also, if you're interested in power structures, I'd suggest reading or watching People & Power on AlJazeera English (http://english.aljazeera.net/programmes/peopleandpower/). AJE has a lot of quality programs which tackle issues of media (http://english.aljazeera.net/programmes/listeningpost/) and economic structures (http://english.aljazeera.net/programmes/countingthecost/) as well.

[Havet]

Well, Let's consider an example you recently lauded: Kowloon Walled City (http://en.wikipedia.org/wiki/Kowloon_Walled_City) whose power vacuum (http://en.wikipedia.org/wiki/Power_vacuum)* invited members of the Triads (http://en.wikipedia.org/wiki/Triad_%28underground_society%29)** to take control.

Somalia and rural parts of Afghanistan and Pakistan are a few other examples who endured recent or present power vacuums.

*A state of any given region or social organization whose hierarchical structure has an absent upper echelon
**Organized underground criminal society

I did not laud Kowloon Walled City. I don't see where you could have assumed that. I said it was a good example of anarcho-capitalism. That's it.

And it is easy for organized crime to gain control of a place such as Kowloon Walled city given that it is a closed "community", restricted of trade with the outside (by hong kong's laws). I mean, just think about it. Police is after a gang, so it naturally goes where the police has no authority, installing its own.