I like it because it broadens my spectrum of things into what I know nothing about.
The folks on this board (Substack) are way smarter than I am, nor ever will be, but you don't mentally benefit from hanging out with a bunch of dolts, knuckleheads, or self pitying useless eaters, although I'm sure some do, because the feeling of superiority is intoxicating for them.
I ALWAYS learn new stuff here, and I'm grateful for the broadened spectrum of experiences brought to the floor of this pub.
Can someone pass the peanuts? I need another beer from the tap to wash down all this salty goodness.
Thank you for sharing this essay, Dr. Malone. I thought I knew about monopolies, but I realize I didn’t understand the difference between one subsidized by the government and one that is not. Makes a big difference. My background is not in economics to I appreciate being enlightened.
My default position on anti-trust laws had previously been that they were a good thing and needed to be enforced. But thanks to this article, I now see an analogy between “regulatory capture” and “anti-trust laws.” If we can’t trust the government on the former, how can we trust them on the latter?
Wow, Robert, that article was a ride; started out with some promise of realistic assessment and ended with full blown fascist apologist.
I’d point out just three things for you to reconsider.
The first is that royal fiat was not needed to establish monopolies and oligopolies in the 20th century. Untouchable money (from both criminal and skimable sources) and collusion were sufficient.
The so vaunted “bright idea” isn’t a formative requirement, any reasonable idea will do, once big money (especially if being laundered) backs it until it has taken out competitors, even those with better ideas and better values, but who couldn’t fund indefinite losses against competitors with such inexhaustible dark funding.
For example, with the right connections, like a wealthy grandfather who was a Federal Reserve Director and parents who were connected to the deep state, a teenager could get an operating system from a local computer club, and with government adoption and deep state participation, propel that into a global operating system monopoly, that kneecapped all competitors in short order, setting up the mechanism for total global surveillance.
The assertion that the market will determine price, and therefore select winners and losers, doesn’t work in the face of a defacto single sourced offering. And should that offering be a utility of human existence, then the buyer has no choice through their own means to negotiate. The price is take-it or leave-it. It’s not a choice that one can buy a $1 can or corned beef or a $2 can of corned beef when the only market places you can buy it at are owned by Blackrock. That the sign over the door may say Safeways, Meijer, Vons, or Piggly Wiggly are of zero competitive significance; that’s the psyop.
In an era where individuals and corporations are wealthier than nation-states, and certainly wealthier than their legislative assemblies, the states as constituted are not the problem but rather it is the corruption of the states by big money and organised crime (including the more euphemistically acceptable term, ‘big business’ ‘big pharma’) that is the enemy of we the people. That is what Jefferson was saying. Taken to the extreme, individuals, without a state to negotiate on their behalf, including blockading excessive private accumulation of power, will have no free choices, no democracy. They will only be able to shop at the company store for food, energy, shelter, and religion. And history has proven time and again, people shopping at the company store never have enough, while growing ever deeper into debt and despair, until death provides them, but not their descendants, relief.
Keeping close to home, Robert, I ask you to lastly reconsider what has been the consequences in the lives of you, Jill and we the people:
- of John D Rockefeller’s Standard Oil monopoly and then oligopoly?
- of Bill Gate’s, Microsoft operating system and applications monopoly?
- of Jeff Bezos’ Amazon marketplace oligopoly?
- of Larry Page and Sergey Brin’s Google search engine monopoly and telecom operating system oligopoly?
How is that working out for us?
These and others like them are who Milei is carrying water for. Is that really the team you are barracking for?
I liked the Sagecrew post for the poignancy of the complaint. However, I don't see exactly how you could so confidently charge such a nuanced and referenced essay with such a blunt moniker as fascism. The scenarios you sketched seem plausible, but is it really 'fascism' when laundered or otherwise 'dark' money are in play without restraint? That seems more like a failed state than a fascist state.
The 'problem definition' gets a major clue when the spouses of more than one of these 'modern monopolists' you proposed come out publicly against "obscene wealth." Does the B Corporation and B Lab movement have any reasonable chance of corporate reform?
How DOES one govern a legally fictitious 'person' i.e. a corporation WITHOUT caprice? Is a legally fictitious person even capable of morality e.g. loving their neighbor?
WTFeng, thanks for the feedback regarding bluntness. I respect and admire Dr Malone, an believe he would want and needs frankness as well as platitudes given the firehose of topics he is exposed to .
As for B Corporations I have nothing to say aside that the badge is a marketing gimmick and a part of the long running societal-breakdown psyops.
Regarding the personification of corporations, the following is a comment I placed on Robert’s January 16th substack entitled “Davos Bacchanal Redux”.
“A great advance forward for freedom and common sense would be to repeal all legislation and court decisions that have allowed Corporations to be Persons. That would put culpability right back in the personal laps of whom it belongs, the operators and shareholders of the corporations. Its origination was a grave mistake for citizenry and a gigantic win for the puppet masters.”
You're welcome. Would you elaborate on Bcorp's as psyops even unwittingly? Perhaps you've made a conflation between Bcorps and 'benefit corporations'. That conflation may qualify as a psyops!
B Labs' distinction between shareholder value and stakeholder value appears to be in the direction of goodness--at least. It might be a structure that could make substantial reform if it were oriented more toward subsidiarity with more local community involvement e.g. community mediation institutions.
The original idea of legal corporate structure shielding innovators from a failed attempt to launch and sustain a public benefit seemed sound enough. Perhaps the ambiguity of a legal fiction provided the 'requisite variety' necessary for sufficient governance. It makes sense to preserve preexisting capital at least until there is an IPO. After the first round, I think the legal fiction should 1.) terminate and 2.) real liability commence for all the owners and 3.) the state recognized branding.
WTFeng, the following is from the Google enquiry, “What is the connection between B-Corporations and ESG?”
Reply, “ESG business practices are central to B Corp Certification, which includes an assessment of a company's impact on environmental, social, and governance factors. They also align with the three pillars in B Lab U.S. & Canada's Theory of Change: climate justice, racial equity, and a stakeholder-driven economy.”
If you want the full link to the B-Corp document, just redo the search.
ESG is the psyop.
“As the world becomes more aware of the impact of industry on the environment and social justice, companies are adopting new strategies that prioritize Environmental, Social, and Governance factors. Corporate responsibility for ESG issues includes addressing climate change through sustainable practices, promoting diversity, equity, and inclusion initiatives, and ensuring good governance practices. A strong ESG strategy benefits from having a strong data-driven DEI foundation. It’s important not only for meeting regulatory requirements but also for business success in the long run. We would like to discuss the upcoming ESG series and why DEI should be the foundation for a company’s ESG strategy in the theme of PowerToChange.”
Well, Mr. Sage, help me, please. Here's guy in Argentina who is standing up to the globalist cabal and in your mind he's not pure enough? Or he's playing both sides? If you had been a citizen of Argentina prior to the election, would you have voted for Milei? If not, why not? At the very least, is not Milei a step in the right direction?
To deem the article that of a “ blown fascist apologist” is a bit much. Perhaps we can agree that a primary problem we face in the US, is that of a corrupted government. Name one country where that is not a problem. Governments are corrupt because people are corrupt. Now we wander close to the line of religion bought “at the company store,” but we don’t have to shop there. While a believer, I am not a theocrat, and would fervently argue for the voice of the atheist to be heard in the public square. Your reference to Jefferson is in the context of his disagreement with Hamilton? Perhaps we are closer in belief than I thought. WTFeng mentioned “subsidiarity” in passing, and that is something that I can wholeheartedly endorse – decentralization, local autonomy, states’ rights – do these represent common ground for us? But I don’t see Milei as part of the problem.
Milei, he ran against the system, made great speeches, however Milei suck people in with his act.
No one paid attention to his actually policy. His main financial advisor is X head of latin America for J.P Morgan and Deutsche Bank, Jeff Epstein' s former bankers.
His plan to dollarize Argentina's economy , the question is what is then IMF trying to do? Use debit bondage to force the state to sell state assets to foreign corporations and banks?
So how is Milei going to finance the dollar conversion, with outside Foreign financing, from Wall Street and the "City of London" The Argentina has no dollars to use. So folks like J.P. Morgan and Blackrock will buy up state assets.
Milei has psyops the Argentina people so instead of the IMF, it will be Wall Street and it will happen quicker this time.
The man Milei put in charge of the Argentina Central Bank is also X-J.P. Morgan and Deutsche Bank.
Source: Whitney Webb has been a professional writer, researcher and journalist since 2016. She has written for several websites and, from 2017 to 2020, was a staff writer and senior investigative reporter for Mint Press News. She is contributing editor of Unlimited Hangout and author of the book One Nation Under Blackmail.
Argentina's Milei taps Bausili as new central bank chief - sources
Bausili previously worked for Deutsche Bank as a debt origination director, first in New York and then in Buenos Aires. He worked for over a decade at JPMorgan focused on capital markets and derivatives marketing covering Argentina, Chile and Peru.
The Bloomberg news agency is correcting an article that suggested that Argentina’s president-elect Javier Milei is converting to Judaism, quoting an aide as saying merely that Milei intends to do this.
Milei, a right-leaning libertarian firebrand who won the November 19 election by a landslide, seeks to become Jewish, according to the corrected language of the article published Tuesday.
Milei, who has multiple Jewish advisors, contacts friends and mentors, is not currently known to be in a formal conversion process. However, his first stop upon arriving in New York this week was the gravesite of late Chabad Rabbi Menachem Mendel Schneerson.
Once upon a time back in the early 1980s, I was taking an introductory economics class at UC Berkeley and being frustrated by all the Keynesian macro/market failures micro nonsense I was being fed, so I took a long trip by public transit to San Jose to a libertarian bookstore just to buy a copy of Murray Rothbard's _Man, Economy, and State_ (there was no amazon.com or mises.org on-line bookstores to order such books from back then).
I did get a real introduction to economics from reading Rothbard's book, and having bought and read several bookshelves of Austrian-oriented economics books since then, I would say that it still remains the best single introductory work on the subject I have come across, especially if you are trying to understand Austrian economics deeply enough to grasp President Milei's critique of neoclassical economics. Your essay is spot on the mark.
President Milei also mentioned Israel Kirzner in his speech, and Kirzner's works (like his book _The Economic Point of View_) are thought-provoking in how they go beyond the limitations of traditional long-run equilibrium models for understanding the nature and importance of entrepreneurship for dealing with non-equilibrium situations in the real world.
Milei neglected to mention the Austrian economist (and Rothbard's and Kirzner's mentor), Ludwig von Mises, who in 1920 independently co-discovered (almost simultaneously with an obscure Soviet economist and a famous German sociologist) that in a dynamic world socialist central planners cannot generate the price information about producer goods needed for rational planning of production. While Friedrich Hayek would later become justly famous for his own take on the socialist calculation problem, it is Mises who really wrote the book on the flaws of socialism.
Great analysis! One of the most restrictive "markets", if you can call it that, is the health care market. It is so dysfunctional as a result of government regulation, how can anyone be surprised when it can't cure us. Has anyone else noticed we are getting sicker, not healthier?
Absolutely the TRUTH!!! Medical care....is not Health Care! Health Care is PREVENTION! Many have probably heard the story of how Chinese doctors long ago... were paid to keep their patients well. When their patients got sick, the doctors had to take care of them free of charge. Today, many people are so naive and unaware; they are paying doctors for drugs and treatments, which could make them ill. Drugs are not answers! Awareness of Causes of Illness are; and Elimination of the Causes. Unfortunately J.D. Rockefeller's Drug Monopoly was set up in the early 1900s by getting his people on all medical college boards; in order to promote allopathic medicine using his patented petroleum-based drugs.
Barbara Charis: "Absolutely the TRUTH!!! Medical care....is not Health Care!"
Especially when the industry has show itself to be a bloated, self driven financial cow that makes more money the sicker (or dead-er) you get, incentivized by government and Big Pharm kickbacks.
The great awakening is all about opening the eyes of those who "thought" that healthcare was available to keep us alive and well, but realize it's to keep us sick and dependent.
Eye opening, and scary to some, no doubt.
Personally, it's made me realize how much more responsible for my own health I really am, and need to be.
and we now are permitted to pay for some group plan (to minimize the hospitals from bankrupting us), a PCP and specialist that is corporate-owned and perhaps add to our costs with 'deductibles'. It's not that I think that health care should be NC, but the costs should be open. I taught a course in 'Practice Management' to doctoral students in my field, and it was remarkable that so few (nearly none) of my students had any idea about how the current reimbursement scheme has developed from the 1960's, and how many held the opinion that there should be no out-of-pocket costs to patients. They may experience the reality of this as they enter the workforce, but they may not. Most wanted to be employees of some unknown business.
Yes. The CFR, WTO, WHO and others have been part of the 'Globalists' for decades. Most have thought that these were figments of the 'Right-wing' clans. Now, we see.
The "CFR" officially began in 1921 - MANY decades before WTO & WTC.
But (anything) with "World" attached to it has the "UN" behind it - which is bad news for "free" peoples anywhere on earth; and the "Collective Left" have been adept at disguising what they are really up to, i.e., absolute control (or outright ownership) of the (global) means of production - and specifically the use of CARBON.
It is buying up single family homes, the younger generation will not benefit from this monopolization of real estate. They will become renters, WEF strategy moving right along.
I will gleefully accept the likes of any government leader of the likes of Mile compared to the majority of the globalists (let's be real, Communists) mongrels that inhabit the WEF (Weakening Economic Freedom)!
Excellent Dr. Malone. Cracking open long static paradigms in a reexamination is always fascinating. I was also confused by this part of the speech that Milei gave but now am very pleased that he included it and that you were curious enough to research it in this way. Thank you. I think there are lots of modern day examples of monopolies that exist by virtue of privilege they've been granted by the USG. Blackrock certainly as mentioned in some of the comments, but also too big to fail banks, Google, and others in the Magnificent 7. Tesla would not exist without a deeply distorted scheme of government incentives offered to consumers for purchases and to Tesla itself for carbon offsets. It is not hard to understand why government would want to concentrate power and wealth in the Corporate world as long as they can control it and benefit from it. Might this be ultimately what the WEF is all about... leveraging such a scheme across national borders to further concentrate power and wealth... if so then ultimately it is free countries that will need to fight back against it for most definitely it is fascism at its very core. While he was cautious, it strikes me that Milei has in fact subtly identified the very existential risk that the WEF and socialist governments represent and while he may not have attacked monopolies per se he signaled that Argentina and governments generally should not be offering sustenance for the creation of monopolies if they wish to be free and lands of liberty. Brilliant on your part Dr. Malone and on Javier Milei's part as well.
I've studied this topic extensively. Here is a layman's explanation.
There is no such thing as a natural monopoly. It's a fallacy. Why? A monopoly is purportedly bad because it can exercise pricing power due to lack of competition. Even if we accept the premise of this position, in a free market the inevitable result of this behavior is more competition (someone will start another company and undercut prices). Therefore the only way to retain monopoly pricing power is to prevent competition. It’s not possible for competition to be prevented in a free market. If competition doesn’t exist, it is either because the company is not exercising its pricing power (i.e. selling at a loss or break-even, making it unattractive for competition to enter the market - and BTW, this benefits the consumer with lower prices) or because the company has no market (which would also suppress any desire to compete with it), and in either case, there is no “harm” to anyone. If a company is suppressing competition by selling at a loss with the expectation that eventually it will apply its pricing power, there is nothing preventing others from executing the same strategy, and of course the strategy is short term. For example, if all the retailers in the country want to try to collude on pricing, let them. It will only last for a short time, as one of them will be able to make more money (and take more share) by breaking out of the collusion and lowering prices. There is no long term incentive to collude, and if they do, it's freedom of contract to do so; or another retailer could come in and undercut the group. Instead, what happens in the long term is innovation. Note how retail went from local stores, to Wal-Mart to Amazon. Scale and service over time changed to bring prices down and service up. Many thought Wal-Mart was a "monopoly" or close to one. Then along came Amazon.
THE ONLY COMPANIES THAT EXERCISE MONOPOLY POWER ARE STATE-CREATED (the AT&T monopoly was entirely a government sponsored monopoly and had to be broken up because of lack of innovation). The force of the state physically prevents or suppresses competition and creates monopoly power (another example is the Federal Reserve - it has a monopoly on printing money and government has granted it this power through the Federal Reserve Act). Note the Internet and companies around it are blossoming. Why? Because it's a free market with very little regulation and a lot of competition. Banking, education and healthcare are all heavily regulated and subsidized - they are not pure monopolies, but more like cartels.
The first thing any successful company sees is competition from others. Any successful entrepreneur would admit to this fact. Price fixing just creates another weakness to compete against (the high price). But government interference or ineptitude can keep others from competing against the price fixing.
Many claim Standard Oil was a monopoly. It wasn't at all but it created our ridiculous anti trust law. Standard Oil was about freedom to contract, huge supply chain efficiencies that put small, inefficient producers out of business, and safer oil. See these five parts to the story of Std Oil which is very well researched:
Regulation is interference by force and immoral. It is aggression against others. I recommend the articles and videos below. Note this is mostly based on logic and an understanding of human behavior, not just data and statistics. The first one below is the one to start with. I can also recommend books that went through history and showed how companies that were assumed to be "monopolies" were not. Alcoa was one example. They had huge market share but what's interesting is prices kept falling! Why? Innovation by Alcoa and the big players brought prices down. Scale leads to capital to be invested to provide better products/services at a lower price. Big is not bad.
And then there was the original steel industry. A new company found a way to make stronger steel and started to sell it as such. Negative ad campaigns by the largest company curtailed all sales until the new company was forced to sell its company, which the large company then bought to use the stronger material for its railway track, as steel was a secondary business.
Yes, and many had to serve old no-growth areas that were costly to serve but with gov fixing prices . . . They could not even give volume discounts - was called discrimination!
Whose on top bus or gov? Doesn't matter anymore - they did a mind meld and rub each other's backs.
You got that right. Proft over prevention or maintenance. Take a ride on any NJ / NY train and you'll have to wear a helmet so you don't smack your beaner on the sidewall in a window seat, as the train wobbles up and down along the tracks at 30 plus miles an hour. Somewhere along the line they just figured they'd take care of the problems that arose, vs fixing things before they happen. This is why I would rather sit in automotive traffic, than to take a wobble wagon anywhere
Yep. In the Midwest there were good alternatives for passenger coach travel. I travelled to CA from the Midwest in the 50's and 60's and it was a pleasurable trip. even if it was 'coach'.
A bit of hypocrisy there by the gov re Standard oil etc. They may have tried to limit the size of these companies but then imposed prorationing to limit the yield of individual wells. Doubt Standard felt a pinch but wildcaters like my grandfather were virtually put out of business.
I was talking to a fella who works at one of the companies I deal with frequently, who said he just came back from Arizona visiting mom and brother. He said they live in an old mining town that used to be flourishing from the copper industry in which the town was built from, supporting from the workers who worked in the mines.
He said that the entire town was devastated (blight) when the local mines were purchased (many other mines, not just the one of this town) by a conglomerate which was most likely from european source. As soon as they purchased the mine, they let everyone who worked there go, then flooded the mine with water. This fella said they did this to all the mines so they could keep the price of copper artificially high, with reduced production. This reminded me of the diamond industry, where prices are kept high, even though production of diamonds if allowed to go to market would flood the market.
His mom's town is but a shadow of what it was previously, as crime and lack of any interest in staying there from not having any industry to support residents has reduced it to what it is today.
Very interesting links. Thank you for sharing your immense knowledge.
I am thrilled you took this on Dr. Malone. With that said - I have been getting Cato's newsletters for more than a decade. I was reading Mises Wire just this morning on Rising Interest Rates and the "Great Reset" Bubble and reviewing Rothbard on Wikipedia this morning. What do they have in common - Libertarian viewpoints. I would be a libertarian myself if it allowed for a robust understanding of human nature and a heart for humanity and adjusted their thought processes with this in mind. I read their output, I see they do not always agree and freely bash one another. Rothbard went from liking Ayn Rand to loving her then despising her.
I stick by my comment from the 18th “Milei is a classic econ book reader that fails to see the reality that 90+% of the world's wealth (and thus all corporations) is control by Vanguard, BlackRock and a few others. And they are control by the financial founding families who that allow them to claim that 90+%.”
I will add the following: Those financial founding families are the barons and bankers of the western world domain.
Capitalism or a true free market is still subject to the whims of fallen man. It was cutthroat in the 19th century as the barons destroyed competitors, bought up all necessary material for their dynasties, stifled other less-costly and more viable alternatives which allowed them to overprice all their products. Government saw a need to correct these monopolies but failed to implement sound policies. At the same time these same barons were bailing out $$ our broke government all while this was going on. The Theory of Moral Sentiments is no constraint on greed.
But how much of what those barons accomplished was done by compliance by the fed thru lobbying? Lobbyists have always been my ideal boogiemen. They have been conduits of money and other perks between those barons and politicians and I have always wished laws could be passed outlawing the critters.
Perhaps K street is the outgrowth of the Wilson era? However Mark Twain's gilded age, after the Civil War and before the Progressive era there were lobbyist, groups of solders, workers, business owners and more. It is true that certain barons were persuasive in getting gov loans or outright money to do their bidding, perhaps while curtailing the efforts of others. Even the fledgling car industry was able form a cabal to keep others out.
If the lobby goals were entirely beneficial, which I'm sure many were, it would seem worthy. For the longest time now your assessment has proven right. Do this for me and you get reelected and your family member can be part of the business. Senator Byrd is past example of being both a senator and his own best lobbyist. West Virginia is plastered with his name but is still a poor state for his being the king for 51 year service.
The argument I hear supporting lobbies is that they are our conduits to the gov. Well, there has never been one doing anything I benefitted from and many causing all kinds of grief. Today we have ample opportunities to contact our reps and if more of us did so suspect our views might be more appreciated, all the more so if not having to compete with lobbies working against out interests.
Yes. I think that most of the lobbies are just arms of some large corporate groups. I contact my Rep. via email, most of the time, and get a standardized 'Thank you for contacting me ...........' When I have contacted the office I get some canned response that tells me that he doesn't really care what my opinion is. This guy has figured out how to vote in favor of what his more conservative constituents prefer when it's sure the measure will fail and against the locals when he thinks he might influence the vote. Most recent - the CR of ~ 1/18 that left the budget bloated and the border open.
Go local. That is what I am doing and am being heard. A big change is in the offing and pols can no more rely on the lying msm than we can so they may well be paying more attention. My mantra, build strong states and revitalize the 10th amendment
You are fortunate to have a rep that understands the top down pressures and the end game enough to want to shore-up TX as a free state. Many are not so lucky. I have two friends in TX that see their rep as a rino - always hoping to replace them. My rep and senator are descent but not aggressive enough.
Thanks for sharing; I didn’t catch that when I saw his speech. Even in last interview I saw, he was quoting Milton Friedman, a world apart from what you shared. Thanks for keeping us informed!
As an economist and money manager, I was also struggling with Milei’s WEF speech as it pertains to monopolies. Thanks for the refresher on Rothbard, who, along with others from the Austrian School, I had read and enjoyed decades ago.
As far as Blackrock, Vanguard, and State Street, I think you and others continue to misunderstand how much passive index strategies and custody accounts have to do with “control” and “ownership” of companies. I would strongly encourage you to seek counsel from someone at the top at Vanguard (for example) and discuss what voting rights they exercise for all the shares in their mutual funds and ETFs, and what criteria they use when voting those shares. With State Street, ask them why they show up as “shareholder” for so many company shares, and what sort of voting rights they have for those shares. I think Ed Dowd should be able to help you directly with these conversations (and also enable introductions to senior people at VG, SS, and BR). Why not educate yourself and others, rather than propagate the narrative from a position of limited knowledge?
Thanks for your comment but the essence of your position escapes me. Are you implying that these firms are quasi-monopolies due to their size? Or that their respective boards collude with one another and consequently limit competition? Sorry to be dense, but more detail with a conclusion or two would be helpful.
If you look at company ownership percentages you will see big stakes owned by large equity managers like BR and VG, and by State Street bank (which serves as a “custody” platform for shares). This fact is often interpreted by the anti-Globalist crowd as an example of collusion to control corporations and the world. (Disclosure: I am generally against the WEF agenda and would support RFK, Jr or Vivek as POTUS.)
In fact, the reason these first 2 companies own so many shares is because they run funds that are passively invested in indices like the S&P 500, and they have investment rules that require that they invest their client money into specific stocks at specific amounts that reflect the index they are trying to mimic. Passive investing has become huge in terms of Assets Under Managment (AUM) due to the success of these low cost, low turnover strategies for tax paying investors. These funds/strategies have also enjoyed a huge increase in AUM due to good performance, resulting mainly from the dominance of global indices by the rapid growth (and share price appreciation) of top technology companies (Tesla, NVDA, MSFT, Alphabet/Google, Apple, Meta/FB, Netflix, etc) over the last 20 years. In the case of VG, the company is actually a cooperative, meaning all the funds are owned by the investors/shareholders (which are mostly individual or retail investors like me and Dr. Malone).
So these companies, VG and BR, have happily benefitted from being passive investors (with significant increase in AUM) in the S&P 500, not from being aggressive, active managers plotting to control the world.
SS, serves to custody equity shares at a very low cost, because now shares exist as electronic blips (rather than paper certificates) and some entity has to manage the documentation and execution of all these ownership and transactional events. Again, these are accounting functions more than influence functions.
Each company manages the voting of these shares in different ways, and there is an effort underway to push these voting rights through to underlying shareholders like happens with individual corp shares (not in a pooled format i.e., mutual funds, ETFs, etc) at some companies. For most investors, they don’t want the hassle of having to educate themselves and vote as a shareholder on a regular basis on a variety of mundane topics including board members.
Now, do these large aggregated positions give the potential for influence to these companies (VG, BR, and SS)? Absolutely. Is there evidence that they are colluding to effect change? I don’t think so, but I am encouraging the people who believe the opposite to do more work on the subject rather than amplify narratives about which they are generally under informed.
All the above information is off the top of my head, and I retired 8 years ago, so forgive any errors. I do believe I am directionally accurate.
Well done Team Malone. This is a very impressive essay on complex economic philosophy and it is very relevant to real problems in the Governments and economies of what we may broadly call The West. (if not the whole world) It seems this discussion is a long way from pandemic public health governance issues and mRNA by which we came to know Dr. Malone but then again maybe we are not. At its core both of these discussions are about individual freedom of choice vs government regulation and coercion and whether we are talking about health care or more mundane purchase decisions there is a philosophical and practical connection. Many of us are in the process of getting a handle on who Argentina's Javier Milei really is and what he stands for. Indeed, we have learned through COVID to take what is said about anyone with a grain of salt. Nice to see the Malones applying their keen insight in new avenues of interest and doing a great job in the process. That is not easy. Clearly a lot of thought and study went into this. Thank you from Ontario.
Yes, the attacks against Milei are the same as those against you: someone or some people (with apologies to good "people") are instigating others to attack so as to divide and conquer. I've never been a fan of the term "controlled opposition," but that is what it is.
Question everything, especially attacks against our own. Because we must start with, everything is a lie. Now prove truth.
At least the old monopolists were content to become fabulously rich, build castles in Newport and, at least had the minimal decency to fund hospitals,, museums and charities.
The globalist pukes of today want to control our thoughts, speech schools and government. All the while freezing their evil brains for posterity and building post-apocalyptic underground lairs that a Bond villain would envy. Time for the peasants to sharpen the pitchforks and light the torches. Starting with Schwab.
As tempting as it is to see monopolies as seeded by distortions due to state action, monopolies, in acting in their own interest, will buy up competitors and/or products to remove them from the marketplace to manage their competition. The more money they have, the easier and more prevalent this behavior becomes. (I am just waiting for the day this happens to Substack.)
If there are no restrictions, Gates could gobble up all the farmland or at least enough to make prices rise and/or cause starvation.
Some people are given to gluttony and nothing is ever enough. They might be heads of corporations, heads of state or individuals.
Jefferson wanted an 11th Amendment to the Bill of Rights that would have made it illegal for corporations to own other corporations. Corporations would have held the status of artificial persons, not natural persons. At the very least, it would have made things possibly more transparent.
Look where we are now: all securities have been pooled and the investors that think they have property rights are at the bottom of the food chain in the priority list in bankruptcy. The NYSE has just backed off doing the same thing to land rights - but for how long?
Didn’t he start out with Paul Allen in programming BASIC and then the IBM PC? There were complaints raised around that time over unethical behavior, right? I don’t really remember. I saw a recent quote saying his most profitable investment has been vaccines. And funding the WHO and WEF promoting forced vaccination won’t be bad for his bottom line, either, right? I’m not sure I understand you.
I am in no way saying the state never plays a role. I’m just saying corporate behavior left unchecked is not good, either. Particularly when they can ignore externalities and eliminate competition. Milei can point to growth - but what of the growth that might have occurred if the markets were truly free? We’ll never know. Now I’m thinking of big pharma and just how many competitive products that are kept from the market. Like Ivermectin.
What I am saying is that a lot of creatures like gates flourish in the swamp created by gov intervention in business. My ignorance of business is vast but my experience with sociopaths suggests to me he benefited from it in an unsavory way.
Yes he did work for IBM developing a clumsy OS, while developing DOS. He then added Windows. OS2 was never competitive. Then several companies came up with word processing and more but on his Microsoft OS
They had to do what BG wanted and he did some undercutting anyway. In the end by hook and crook, in the app domain he has killed them all
Excellent discussion all. I was a bit worried about whether you would like this essay.- thanks
Robert
I like it because it broadens my spectrum of things into what I know nothing about.
The folks on this board (Substack) are way smarter than I am, nor ever will be, but you don't mentally benefit from hanging out with a bunch of dolts, knuckleheads, or self pitying useless eaters, although I'm sure some do, because the feeling of superiority is intoxicating for them.
I ALWAYS learn new stuff here, and I'm grateful for the broadened spectrum of experiences brought to the floor of this pub.
Can someone pass the peanuts? I need another beer from the tap to wash down all this salty goodness.
Thank you for sharing this essay, Dr. Malone. I thought I knew about monopolies, but I realize I didn’t understand the difference between one subsidized by the government and one that is not. Makes a big difference. My background is not in economics to I appreciate being enlightened.
Btw, I’m praying for President Milei’s success!
My default position on anti-trust laws had previously been that they were a good thing and needed to be enforced. But thanks to this article, I now see an analogy between “regulatory capture” and “anti-trust laws.” If we can’t trust the government on the former, how can we trust them on the latter?
Wow, Robert, that article was a ride; started out with some promise of realistic assessment and ended with full blown fascist apologist.
I’d point out just three things for you to reconsider.
The first is that royal fiat was not needed to establish monopolies and oligopolies in the 20th century. Untouchable money (from both criminal and skimable sources) and collusion were sufficient.
The so vaunted “bright idea” isn’t a formative requirement, any reasonable idea will do, once big money (especially if being laundered) backs it until it has taken out competitors, even those with better ideas and better values, but who couldn’t fund indefinite losses against competitors with such inexhaustible dark funding.
For example, with the right connections, like a wealthy grandfather who was a Federal Reserve Director and parents who were connected to the deep state, a teenager could get an operating system from a local computer club, and with government adoption and deep state participation, propel that into a global operating system monopoly, that kneecapped all competitors in short order, setting up the mechanism for total global surveillance.
The assertion that the market will determine price, and therefore select winners and losers, doesn’t work in the face of a defacto single sourced offering. And should that offering be a utility of human existence, then the buyer has no choice through their own means to negotiate. The price is take-it or leave-it. It’s not a choice that one can buy a $1 can or corned beef or a $2 can of corned beef when the only market places you can buy it at are owned by Blackrock. That the sign over the door may say Safeways, Meijer, Vons, or Piggly Wiggly are of zero competitive significance; that’s the psyop.
In an era where individuals and corporations are wealthier than nation-states, and certainly wealthier than their legislative assemblies, the states as constituted are not the problem but rather it is the corruption of the states by big money and organised crime (including the more euphemistically acceptable term, ‘big business’ ‘big pharma’) that is the enemy of we the people. That is what Jefferson was saying. Taken to the extreme, individuals, without a state to negotiate on their behalf, including blockading excessive private accumulation of power, will have no free choices, no democracy. They will only be able to shop at the company store for food, energy, shelter, and religion. And history has proven time and again, people shopping at the company store never have enough, while growing ever deeper into debt and despair, until death provides them, but not their descendants, relief.
Keeping close to home, Robert, I ask you to lastly reconsider what has been the consequences in the lives of you, Jill and we the people:
- of John D Rockefeller’s Standard Oil monopoly and then oligopoly?
- of Bill Gate’s, Microsoft operating system and applications monopoly?
- of Jeff Bezos’ Amazon marketplace oligopoly?
- of Larry Page and Sergey Brin’s Google search engine monopoly and telecom operating system oligopoly?
How is that working out for us?
These and others like them are who Milei is carrying water for. Is that really the team you are barracking for?
I liked the Sagecrew post for the poignancy of the complaint. However, I don't see exactly how you could so confidently charge such a nuanced and referenced essay with such a blunt moniker as fascism. The scenarios you sketched seem plausible, but is it really 'fascism' when laundered or otherwise 'dark' money are in play without restraint? That seems more like a failed state than a fascist state.
The 'problem definition' gets a major clue when the spouses of more than one of these 'modern monopolists' you proposed come out publicly against "obscene wealth." Does the B Corporation and B Lab movement have any reasonable chance of corporate reform?
https://en.wikipedia.org/wiki/B_Corporation_(certification)
How DOES one govern a legally fictitious 'person' i.e. a corporation WITHOUT caprice? Is a legally fictitious person even capable of morality e.g. loving their neighbor?
https://en.wikipedia.org/wiki/Corporation#Personhood
WTFeng, thanks for the feedback regarding bluntness. I respect and admire Dr Malone, an believe he would want and needs frankness as well as platitudes given the firehose of topics he is exposed to .
As for B Corporations I have nothing to say aside that the badge is a marketing gimmick and a part of the long running societal-breakdown psyops.
Regarding the personification of corporations, the following is a comment I placed on Robert’s January 16th substack entitled “Davos Bacchanal Redux”.
“A great advance forward for freedom and common sense would be to repeal all legislation and court decisions that have allowed Corporations to be Persons. That would put culpability right back in the personal laps of whom it belongs, the operators and shareholders of the corporations. Its origination was a grave mistake for citizenry and a gigantic win for the puppet masters.”
You're welcome. Would you elaborate on Bcorp's as psyops even unwittingly? Perhaps you've made a conflation between Bcorps and 'benefit corporations'. That conflation may qualify as a psyops!
B Labs' distinction between shareholder value and stakeholder value appears to be in the direction of goodness--at least. It might be a structure that could make substantial reform if it were oriented more toward subsidiarity with more local community involvement e.g. community mediation institutions.
The original idea of legal corporate structure shielding innovators from a failed attempt to launch and sustain a public benefit seemed sound enough. Perhaps the ambiguity of a legal fiction provided the 'requisite variety' necessary for sufficient governance. It makes sense to preserve preexisting capital at least until there is an IPO. After the first round, I think the legal fiction should 1.) terminate and 2.) real liability commence for all the owners and 3.) the state recognized branding.
WTFeng, the following is from the Google enquiry, “What is the connection between B-Corporations and ESG?”
Reply, “ESG business practices are central to B Corp Certification, which includes an assessment of a company's impact on environmental, social, and governance factors. They also align with the three pillars in B Lab U.S. & Canada's Theory of Change: climate justice, racial equity, and a stakeholder-driven economy.”
If you want the full link to the B-Corp document, just redo the search.
ESG is the psyop.
“As the world becomes more aware of the impact of industry on the environment and social justice, companies are adopting new strategies that prioritize Environmental, Social, and Governance factors. Corporate responsibility for ESG issues includes addressing climate change through sustainable practices, promoting diversity, equity, and inclusion initiatives, and ensuring good governance practices. A strong ESG strategy benefits from having a strong data-driven DEI foundation. It’s important not only for meeting regulatory requirements but also for business success in the long run. We would like to discuss the upcoming ESG series and why DEI should be the foundation for a company’s ESG strategy in the theme of PowerToChange.”
https://www.linkedin.com/pulse/importance-dei-companys-esg-strategy-wifasia/
Well, Mr. Sage, help me, please. Here's guy in Argentina who is standing up to the globalist cabal and in your mind he's not pure enough? Or he's playing both sides? If you had been a citizen of Argentina prior to the election, would you have voted for Milei? If not, why not? At the very least, is not Milei a step in the right direction?
To deem the article that of a “ blown fascist apologist” is a bit much. Perhaps we can agree that a primary problem we face in the US, is that of a corrupted government. Name one country where that is not a problem. Governments are corrupt because people are corrupt. Now we wander close to the line of religion bought “at the company store,” but we don’t have to shop there. While a believer, I am not a theocrat, and would fervently argue for the voice of the atheist to be heard in the public square. Your reference to Jefferson is in the context of his disagreement with Hamilton? Perhaps we are closer in belief than I thought. WTFeng mentioned “subsidiarity” in passing, and that is something that I can wholeheartedly endorse – decentralization, local autonomy, states’ rights – do these represent common ground for us? But I don’t see Milei as part of the problem.
FYI: Whitney Webb on TLAV discussing President of Argentina, Javier Milei
https://odysee.com/@UnlimitedHangout:a/argentina:3d4
Milei, he ran against the system, made great speeches, however Milei suck people in with his act.
No one paid attention to his actually policy. His main financial advisor is X head of latin America for J.P Morgan and Deutsche Bank, Jeff Epstein' s former bankers.
His plan to dollarize Argentina's economy , the question is what is then IMF trying to do? Use debit bondage to force the state to sell state assets to foreign corporations and banks?
So how is Milei going to finance the dollar conversion, with outside Foreign financing, from Wall Street and the "City of London" The Argentina has no dollars to use. So folks like J.P. Morgan and Blackrock will buy up state assets.
Milei has psyops the Argentina people so instead of the IMF, it will be Wall Street and it will happen quicker this time.
The man Milei put in charge of the Argentina Central Bank is also X-J.P. Morgan and Deutsche Bank.
Source: Whitney Webb has been a professional writer, researcher and journalist since 2016. She has written for several websites and, from 2017 to 2020, was a staff writer and senior investigative reporter for Mint Press News. She is contributing editor of Unlimited Hangout and author of the book One Nation Under Blackmail.
Argentina's Milei taps Bausili as new central bank chief - sources
Bausili previously worked for Deutsche Bank as a debt origination director, first in New York and then in Buenos Aires. He worked for over a decade at JPMorgan focused on capital markets and derivatives marketing covering Argentina, Chile and Peru.
https://www.reuters.com/world/americas/argentinas-milei-taps-bausili-new-cenbank-chief-sources-2023-12-06/
The Bloomberg news agency is correcting an article that suggested that Argentina’s president-elect Javier Milei is converting to Judaism, quoting an aide as saying merely that Milei intends to do this.
Milei, a right-leaning libertarian firebrand who won the November 19 election by a landslide, seeks to become Jewish, according to the corrected language of the article published Tuesday.
https://www.timesofisrael.com/liveblog_entry/story-on-argentina-president-elect-converting-to-judaism-walked-back/
Milei, who has multiple Jewish advisors, contacts friends and mentors, is not currently known to be in a formal conversion process. However, his first stop upon arriving in New York this week was the gravesite of late Chabad Rabbi Menachem Mendel Schneerson.
Once upon a time back in the early 1980s, I was taking an introductory economics class at UC Berkeley and being frustrated by all the Keynesian macro/market failures micro nonsense I was being fed, so I took a long trip by public transit to San Jose to a libertarian bookstore just to buy a copy of Murray Rothbard's _Man, Economy, and State_ (there was no amazon.com or mises.org on-line bookstores to order such books from back then).
I did get a real introduction to economics from reading Rothbard's book, and having bought and read several bookshelves of Austrian-oriented economics books since then, I would say that it still remains the best single introductory work on the subject I have come across, especially if you are trying to understand Austrian economics deeply enough to grasp President Milei's critique of neoclassical economics. Your essay is spot on the mark.
President Milei also mentioned Israel Kirzner in his speech, and Kirzner's works (like his book _The Economic Point of View_) are thought-provoking in how they go beyond the limitations of traditional long-run equilibrium models for understanding the nature and importance of entrepreneurship for dealing with non-equilibrium situations in the real world.
Milei neglected to mention the Austrian economist (and Rothbard's and Kirzner's mentor), Ludwig von Mises, who in 1920 independently co-discovered (almost simultaneously with an obscure Soviet economist and a famous German sociologist) that in a dynamic world socialist central planners cannot generate the price information about producer goods needed for rational planning of production. While Friedrich Hayek would later become justly famous for his own take on the socialist calculation problem, it is Mises who really wrote the book on the flaws of socialism.
Great analysis! One of the most restrictive "markets", if you can call it that, is the health care market. It is so dysfunctional as a result of government regulation, how can anyone be surprised when it can't cure us. Has anyone else noticed we are getting sicker, not healthier?
excellent observation.
Absolutely the TRUTH!!! Medical care....is not Health Care! Health Care is PREVENTION! Many have probably heard the story of how Chinese doctors long ago... were paid to keep their patients well. When their patients got sick, the doctors had to take care of them free of charge. Today, many people are so naive and unaware; they are paying doctors for drugs and treatments, which could make them ill. Drugs are not answers! Awareness of Causes of Illness are; and Elimination of the Causes. Unfortunately J.D. Rockefeller's Drug Monopoly was set up in the early 1900s by getting his people on all medical college boards; in order to promote allopathic medicine using his patented petroleum-based drugs.
Oh so true! Medical care is not health care!
This was a very interesting article, Dr Malone. I learn so much from you.
Barbara Charis: "Absolutely the TRUTH!!! Medical care....is not Health Care!"
Especially when the industry has show itself to be a bloated, self driven financial cow that makes more money the sicker (or dead-er) you get, incentivized by government and Big Pharm kickbacks.
The great awakening is all about opening the eyes of those who "thought" that healthcare was available to keep us alive and well, but realize it's to keep us sick and dependent.
Eye opening, and scary to some, no doubt.
Personally, it's made me realize how much more responsible for my own health I really am, and need to be.
Totally agree! Big Pharma, insurance companies and bureaucrats controlling “health care”.
Health care is that which it is not.
and we now are permitted to pay for some group plan (to minimize the hospitals from bankrupting us), a PCP and specialist that is corporate-owned and perhaps add to our costs with 'deductibles'. It's not that I think that health care should be NC, but the costs should be open. I taught a course in 'Practice Management' to doctoral students in my field, and it was remarkable that so few (nearly none) of my students had any idea about how the current reimbursement scheme has developed from the 1960's, and how many held the opinion that there should be no out-of-pocket costs to patients. They may experience the reality of this as they enter the workforce, but they may not. Most wanted to be employees of some unknown business.
Blackrock, is it or is it not, a monopolistic tyrant?
which benefit from an exclusive monopoly granted by the State under Obama. That is what catapulted them into the big leagues.
so yes
I am not familiar with what monopoly was granted under Obama. Can you clarfy?
Oh SNAP, that's easy !
Obummer made it a monopoly for men to marry other men, pretending to be women....
(you know Big Mike approved.)
Haha,
I was a big fan of Geraldine (Flip Wilson) as a kid, but I knew he was doing it for comedic effect (entertainment).
( but then again, I had such a distorted point of view back then...)
8-)
Haha, "back then"....
Let us not forget that the CEO of BlackRock - Larry Fink* - is a "COUNCIL on FORIGN RELATIONS" member.
*"Fink" is an apt description of this one-world-order (globalist) "CFR"member & BlackRock CEO Larry Fink.
Yes. The CFR, WTO, WHO and others have been part of the 'Globalists' for decades. Most have thought that these were figments of the 'Right-wing' clans. Now, we see.
The "CFR" officially began in 1921 - MANY decades before WTO & WTC.
But (anything) with "World" attached to it has the "UN" behind it - which is bad news for "free" peoples anywhere on earth; and the "Collective Left" have been adept at disguising what they are really up to, i.e., absolute control (or outright ownership) of the (global) means of production - and specifically the use of CARBON.
I didn't specify who came first.
No biggie...
If they benefit from government subsidy or regulation, then they may have monopolistic attributes.
It is buying up single family homes, the younger generation will not benefit from this monopolization of real estate. They will become renters, WEF strategy moving right along.
I will gleefully accept the likes of any government leader of the likes of Mile compared to the majority of the globalists (let's be real, Communists) mongrels that inhabit the WEF (Weakening Economic Freedom)!
Excellent Dr. Malone. Cracking open long static paradigms in a reexamination is always fascinating. I was also confused by this part of the speech that Milei gave but now am very pleased that he included it and that you were curious enough to research it in this way. Thank you. I think there are lots of modern day examples of monopolies that exist by virtue of privilege they've been granted by the USG. Blackrock certainly as mentioned in some of the comments, but also too big to fail banks, Google, and others in the Magnificent 7. Tesla would not exist without a deeply distorted scheme of government incentives offered to consumers for purchases and to Tesla itself for carbon offsets. It is not hard to understand why government would want to concentrate power and wealth in the Corporate world as long as they can control it and benefit from it. Might this be ultimately what the WEF is all about... leveraging such a scheme across national borders to further concentrate power and wealth... if so then ultimately it is free countries that will need to fight back against it for most definitely it is fascism at its very core. While he was cautious, it strikes me that Milei has in fact subtly identified the very existential risk that the WEF and socialist governments represent and while he may not have attacked monopolies per se he signaled that Argentina and governments generally should not be offering sustenance for the creation of monopolies if they wish to be free and lands of liberty. Brilliant on your part Dr. Malone and on Javier Milei's part as well.
I've studied this topic extensively. Here is a layman's explanation.
There is no such thing as a natural monopoly. It's a fallacy. Why? A monopoly is purportedly bad because it can exercise pricing power due to lack of competition. Even if we accept the premise of this position, in a free market the inevitable result of this behavior is more competition (someone will start another company and undercut prices). Therefore the only way to retain monopoly pricing power is to prevent competition. It’s not possible for competition to be prevented in a free market. If competition doesn’t exist, it is either because the company is not exercising its pricing power (i.e. selling at a loss or break-even, making it unattractive for competition to enter the market - and BTW, this benefits the consumer with lower prices) or because the company has no market (which would also suppress any desire to compete with it), and in either case, there is no “harm” to anyone. If a company is suppressing competition by selling at a loss with the expectation that eventually it will apply its pricing power, there is nothing preventing others from executing the same strategy, and of course the strategy is short term. For example, if all the retailers in the country want to try to collude on pricing, let them. It will only last for a short time, as one of them will be able to make more money (and take more share) by breaking out of the collusion and lowering prices. There is no long term incentive to collude, and if they do, it's freedom of contract to do so; or another retailer could come in and undercut the group. Instead, what happens in the long term is innovation. Note how retail went from local stores, to Wal-Mart to Amazon. Scale and service over time changed to bring prices down and service up. Many thought Wal-Mart was a "monopoly" or close to one. Then along came Amazon.
THE ONLY COMPANIES THAT EXERCISE MONOPOLY POWER ARE STATE-CREATED (the AT&T monopoly was entirely a government sponsored monopoly and had to be broken up because of lack of innovation). The force of the state physically prevents or suppresses competition and creates monopoly power (another example is the Federal Reserve - it has a monopoly on printing money and government has granted it this power through the Federal Reserve Act). Note the Internet and companies around it are blossoming. Why? Because it's a free market with very little regulation and a lot of competition. Banking, education and healthcare are all heavily regulated and subsidized - they are not pure monopolies, but more like cartels.
The first thing any successful company sees is competition from others. Any successful entrepreneur would admit to this fact. Price fixing just creates another weakness to compete against (the high price). But government interference or ineptitude can keep others from competing against the price fixing.
Many claim Standard Oil was a monopoly. It wasn't at all but it created our ridiculous anti trust law. Standard Oil was about freedom to contract, huge supply chain efficiencies that put small, inefficient producers out of business, and safer oil. See these five parts to the story of Std Oil which is very well researched:
https://www.masterresource.org/epstein-alex/vindicating-capitalism-standard-oil-i/
https://www.masterresource.org/epstein-alex/vindicating-capitalism-standard-oil-ii/
https://www.masterresource.org/epstein-alex/vindicating-capitalism-standard-oil-iii/
https://www.masterresource.org/epstein-alex/the-real-history-of-the-standard-oil-company-part-iv-pioneering-in-big-business/
https://www.masterresource.org/epstein-alex/capitalism-vindicated-standard-oil-part-v/
Regulation is interference by force and immoral. It is aggression against others. I recommend the articles and videos below. Note this is mostly based on logic and an understanding of human behavior, not just data and statistics. The first one below is the one to start with. I can also recommend books that went through history and showed how companies that were assumed to be "monopolies" were not. Alcoa was one example. They had huge market share but what's interesting is prices kept falling! Why? Innovation by Alcoa and the big players brought prices down. Scale leads to capital to be invested to provide better products/services at a lower price. Big is not bad.
Other materials:
https://mises.org/library/myth-natural-monopoly
ttps://mises.org/wire/capitalism-and-misunderstanding-monopoly
https://mises.org/library/antitrust-policy-both-harmful-and-useless
https://www.youtube.com/watch?v=WSVR9xJ-1Vc
https://www.youtube.com/watch?v=-q1fSNzYNhg
https://mises.org/library/net-neutrality-scam
https://mises.org/blog/ditch-net-neutrality-now
https://mises.org/library/peter-klein-net-neutrality-lie
https://mises.org/library/question-cable-monopoly
https://mises.org/library/why-public-utility-monopolies-fail
And then there was the original steel industry. A new company found a way to make stronger steel and started to sell it as such. Negative ad campaigns by the largest company curtailed all sales until the new company was forced to sell its company, which the large company then bought to use the stronger material for its railway track, as steel was a secondary business.
Re railroads remember when gov decided to make them all better and they went to hell in a hand basket?
Yes, and many had to serve old no-growth areas that were costly to serve but with gov fixing prices . . . They could not even give volume discounts - was called discrimination!
Whose on top bus or gov? Doesn't matter anymore - they did a mind meld and rub each other's backs.
You got that right. Proft over prevention or maintenance. Take a ride on any NJ / NY train and you'll have to wear a helmet so you don't smack your beaner on the sidewall in a window seat, as the train wobbles up and down along the tracks at 30 plus miles an hour. Somewhere along the line they just figured they'd take care of the problems that arose, vs fixing things before they happen. This is why I would rather sit in automotive traffic, than to take a wobble wagon anywhere
Yep. In the Midwest there were good alternatives for passenger coach travel. I travelled to CA from the Midwest in the 50's and 60's and it was a pleasurable trip. even if it was 'coach'.
A bit of hypocrisy there by the gov re Standard oil etc. They may have tried to limit the size of these companies but then imposed prorationing to limit the yield of individual wells. Doubt Standard felt a pinch but wildcaters like my grandfather were virtually put out of business.
NAPman:
You bring up an interesting thought.
I was talking to a fella who works at one of the companies I deal with frequently, who said he just came back from Arizona visiting mom and brother. He said they live in an old mining town that used to be flourishing from the copper industry in which the town was built from, supporting from the workers who worked in the mines.
He said that the entire town was devastated (blight) when the local mines were purchased (many other mines, not just the one of this town) by a conglomerate which was most likely from european source. As soon as they purchased the mine, they let everyone who worked there go, then flooded the mine with water. This fella said they did this to all the mines so they could keep the price of copper artificially high, with reduced production. This reminded me of the diamond industry, where prices are kept high, even though production of diamonds if allowed to go to market would flood the market.
His mom's town is but a shadow of what it was previously, as crime and lack of any interest in staying there from not having any industry to support residents has reduced it to what it is today.
Very interesting links. Thank you for sharing your immense knowledge.
And this is why you're the man to follow; you catch things that are missed my many. Thank you!
I am thrilled you took this on Dr. Malone. With that said - I have been getting Cato's newsletters for more than a decade. I was reading Mises Wire just this morning on Rising Interest Rates and the "Great Reset" Bubble and reviewing Rothbard on Wikipedia this morning. What do they have in common - Libertarian viewpoints. I would be a libertarian myself if it allowed for a robust understanding of human nature and a heart for humanity and adjusted their thought processes with this in mind. I read their output, I see they do not always agree and freely bash one another. Rothbard went from liking Ayn Rand to loving her then despising her.
I stick by my comment from the 18th “Milei is a classic econ book reader that fails to see the reality that 90+% of the world's wealth (and thus all corporations) is control by Vanguard, BlackRock and a few others. And they are control by the financial founding families who that allow them to claim that 90+%.”
I will add the following: Those financial founding families are the barons and bankers of the western world domain.
Capitalism or a true free market is still subject to the whims of fallen man. It was cutthroat in the 19th century as the barons destroyed competitors, bought up all necessary material for their dynasties, stifled other less-costly and more viable alternatives which allowed them to overprice all their products. Government saw a need to correct these monopolies but failed to implement sound policies. At the same time these same barons were bailing out $$ our broke government all while this was going on. The Theory of Moral Sentiments is no constraint on greed.
But how much of what those barons accomplished was done by compliance by the fed thru lobbying? Lobbyists have always been my ideal boogiemen. They have been conduits of money and other perks between those barons and politicians and I have always wished laws could be passed outlawing the critters.
Perhaps K street is the outgrowth of the Wilson era? However Mark Twain's gilded age, after the Civil War and before the Progressive era there were lobbyist, groups of solders, workers, business owners and more. It is true that certain barons were persuasive in getting gov loans or outright money to do their bidding, perhaps while curtailing the efforts of others. Even the fledgling car industry was able form a cabal to keep others out.
If the lobby goals were entirely beneficial, which I'm sure many were, it would seem worthy. For the longest time now your assessment has proven right. Do this for me and you get reelected and your family member can be part of the business. Senator Byrd is past example of being both a senator and his own best lobbyist. West Virginia is plastered with his name but is still a poor state for his being the king for 51 year service.
The argument I hear supporting lobbies is that they are our conduits to the gov. Well, there has never been one doing anything I benefitted from and many causing all kinds of grief. Today we have ample opportunities to contact our reps and if more of us did so suspect our views might be more appreciated, all the more so if not having to compete with lobbies working against out interests.
Yes. I think that most of the lobbies are just arms of some large corporate groups. I contact my Rep. via email, most of the time, and get a standardized 'Thank you for contacting me ...........' When I have contacted the office I get some canned response that tells me that he doesn't really care what my opinion is. This guy has figured out how to vote in favor of what his more conservative constituents prefer when it's sure the measure will fail and against the locals when he thinks he might influence the vote. Most recent - the CR of ~ 1/18 that left the budget bloated and the border open.
Go local. That is what I am doing and am being heard. A big change is in the offing and pols can no more rely on the lying msm than we can so they may well be paying more attention. My mantra, build strong states and revitalize the 10th amendment
You are fortunate to have a rep that understands the top down pressures and the end game enough to want to shore-up TX as a free state. Many are not so lucky. I have two friends in TX that see their rep as a rino - always hoping to replace them. My rep and senator are descent but not aggressive enough.
Agree! That is how they operate, everyone gets a turn to vote no or yes for cover with their constituents.
Agree!
Thanks for sharing; I didn’t catch that when I saw his speech. Even in last interview I saw, he was quoting Milton Friedman, a world apart from what you shared. Thanks for keeping us informed!
Thanks for this essay!
As an economist and money manager, I was also struggling with Milei’s WEF speech as it pertains to monopolies. Thanks for the refresher on Rothbard, who, along with others from the Austrian School, I had read and enjoyed decades ago.
As far as Blackrock, Vanguard, and State Street, I think you and others continue to misunderstand how much passive index strategies and custody accounts have to do with “control” and “ownership” of companies. I would strongly encourage you to seek counsel from someone at the top at Vanguard (for example) and discuss what voting rights they exercise for all the shares in their mutual funds and ETFs, and what criteria they use when voting those shares. With State Street, ask them why they show up as “shareholder” for so many company shares, and what sort of voting rights they have for those shares. I think Ed Dowd should be able to help you directly with these conversations (and also enable introductions to senior people at VG, SS, and BR). Why not educate yourself and others, rather than propagate the narrative from a position of limited knowledge?
Thanks, again!
thanks for the suggestion.
Thanks for your comment but the essence of your position escapes me. Are you implying that these firms are quasi-monopolies due to their size? Or that their respective boards collude with one another and consequently limit competition? Sorry to be dense, but more detail with a conclusion or two would be helpful.
If you look at company ownership percentages you will see big stakes owned by large equity managers like BR and VG, and by State Street bank (which serves as a “custody” platform for shares). This fact is often interpreted by the anti-Globalist crowd as an example of collusion to control corporations and the world. (Disclosure: I am generally against the WEF agenda and would support RFK, Jr or Vivek as POTUS.)
In fact, the reason these first 2 companies own so many shares is because they run funds that are passively invested in indices like the S&P 500, and they have investment rules that require that they invest their client money into specific stocks at specific amounts that reflect the index they are trying to mimic. Passive investing has become huge in terms of Assets Under Managment (AUM) due to the success of these low cost, low turnover strategies for tax paying investors. These funds/strategies have also enjoyed a huge increase in AUM due to good performance, resulting mainly from the dominance of global indices by the rapid growth (and share price appreciation) of top technology companies (Tesla, NVDA, MSFT, Alphabet/Google, Apple, Meta/FB, Netflix, etc) over the last 20 years. In the case of VG, the company is actually a cooperative, meaning all the funds are owned by the investors/shareholders (which are mostly individual or retail investors like me and Dr. Malone).
So these companies, VG and BR, have happily benefitted from being passive investors (with significant increase in AUM) in the S&P 500, not from being aggressive, active managers plotting to control the world.
SS, serves to custody equity shares at a very low cost, because now shares exist as electronic blips (rather than paper certificates) and some entity has to manage the documentation and execution of all these ownership and transactional events. Again, these are accounting functions more than influence functions.
Each company manages the voting of these shares in different ways, and there is an effort underway to push these voting rights through to underlying shareholders like happens with individual corp shares (not in a pooled format i.e., mutual funds, ETFs, etc) at some companies. For most investors, they don’t want the hassle of having to educate themselves and vote as a shareholder on a regular basis on a variety of mundane topics including board members.
Now, do these large aggregated positions give the potential for influence to these companies (VG, BR, and SS)? Absolutely. Is there evidence that they are colluding to effect change? I don’t think so, but I am encouraging the people who believe the opposite to do more work on the subject rather than amplify narratives about which they are generally under informed.
All the above information is off the top of my head, and I retired 8 years ago, so forgive any errors. I do believe I am directionally accurate.
Below is a link to an article I found useful.
https://www.morningstar.com/sustainable-investing/how-blackrock-state-street-vanguard-cast-their-esg-proxy-votes
Very helpful; thanks!
I think H8SBAD was giving them a pass.
Well done Team Malone. This is a very impressive essay on complex economic philosophy and it is very relevant to real problems in the Governments and economies of what we may broadly call The West. (if not the whole world) It seems this discussion is a long way from pandemic public health governance issues and mRNA by which we came to know Dr. Malone but then again maybe we are not. At its core both of these discussions are about individual freedom of choice vs government regulation and coercion and whether we are talking about health care or more mundane purchase decisions there is a philosophical and practical connection. Many of us are in the process of getting a handle on who Argentina's Javier Milei really is and what he stands for. Indeed, we have learned through COVID to take what is said about anyone with a grain of salt. Nice to see the Malones applying their keen insight in new avenues of interest and doing a great job in the process. That is not easy. Clearly a lot of thought and study went into this. Thank you from Ontario.
Yes, the attacks against Milei are the same as those against you: someone or some people (with apologies to good "people") are instigating others to attack so as to divide and conquer. I've never been a fan of the term "controlled opposition," but that is what it is.
Question everything, especially attacks against our own. Because we must start with, everything is a lie. Now prove truth.
At least the old monopolists were content to become fabulously rich, build castles in Newport and, at least had the minimal decency to fund hospitals,, museums and charities.
The globalist pukes of today want to control our thoughts, speech schools and government. All the while freezing their evil brains for posterity and building post-apocalyptic underground lairs that a Bond villain would envy. Time for the peasants to sharpen the pitchforks and light the torches. Starting with Schwab.
And libraries. Spent much of my childhood in Carnegie libraries.
Doctor Malone, I absolutely 💯 tune in to your substack. I ALWAYS find it very educational and informative.
That being said, I'm missing the lead on this topic and all of the focus on the very colorful and energetic Melei.
Can you please advise on why all of the interest, attention and focus on Melei's actions and speeches?
I would like to know how his actions 🎬 affect the BIG PICTURE.
THANK 😊 YOU.
As tempting as it is to see monopolies as seeded by distortions due to state action, monopolies, in acting in their own interest, will buy up competitors and/or products to remove them from the marketplace to manage their competition. The more money they have, the easier and more prevalent this behavior becomes. (I am just waiting for the day this happens to Substack.)
If there are no restrictions, Gates could gobble up all the farmland or at least enough to make prices rise and/or cause starvation.
Some people are given to gluttony and nothing is ever enough. They might be heads of corporations, heads of state or individuals.
Jefferson wanted an 11th Amendment to the Bill of Rights that would have made it illegal for corporations to own other corporations. Corporations would have held the status of artificial persons, not natural persons. At the very least, it would have made things possibly more transparent.
Look where we are now: all securities have been pooled and the investors that think they have property rights are at the bottom of the food chain in the priority list in bankruptcy. The NYSE has just backed off doing the same thing to land rights - but for how long?
But how did Gates get all that money to begin with?
Didn’t he start out with Paul Allen in programming BASIC and then the IBM PC? There were complaints raised around that time over unethical behavior, right? I don’t really remember. I saw a recent quote saying his most profitable investment has been vaccines. And funding the WHO and WEF promoting forced vaccination won’t be bad for his bottom line, either, right? I’m not sure I understand you.
I am in no way saying the state never plays a role. I’m just saying corporate behavior left unchecked is not good, either. Particularly when they can ignore externalities and eliminate competition. Milei can point to growth - but what of the growth that might have occurred if the markets were truly free? We’ll never know. Now I’m thinking of big pharma and just how many competitive products that are kept from the market. Like Ivermectin.
What I am saying is that a lot of creatures like gates flourish in the swamp created by gov intervention in business. My ignorance of business is vast but my experience with sociopaths suggests to me he benefited from it in an unsavory way.
lol. Can’t argue with that!
Creatures....
Such a nice way of saying it. You been hanging with James lately ?
(lol)
Love both you guys, no matter how nicey wicey you get.
lmao.
Yes he did work for IBM developing a clumsy OS, while developing DOS. He then added Windows. OS2 was never competitive. Then several companies came up with word processing and more but on his Microsoft OS
They had to do what BG wanted and he did some undercutting anyway. In the end by hook and crook, in the app domain he has killed them all
Well said. Thank you Kim.
That photo is giving me clockwork orange flashbacks..... Hopefully not a representation of his plans for Argentina.