SoylentNews is people
SoylentNews
In a followup to an article discussed previously here on SoylentNews:
Bloomberg has a three-part series on the use of an obscure legal document that unscrupulous lenders are using against small businesses.
- In Part 1 - I Hereby Confess Judgement, (the part discussed earlier on SoylentNews,) they go into detail on what the predatory lenders are doing to small businesses using a document known as a "Confession of Judgement" to extract court wins from small businesses without a trial.
- In Part 2 - The $1.7 Million Man, they go into how a debt collector became NYC's top earning official.
- In Part 3 - Rubber Stamp Justice, the article describes how the courts are involved, and what some of them are doing to prevent this abuse.
After the story was released on Bloomberg, the New York State Attorney General's office opened a formal investigation last month.
This discussion has been archived.
No new comments can be posted.
Predatory Lending is Crushing Small Businesses (continued)
|
Log In/Create an Account
| Top
| 61 comments
| Search Discussion
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
I think my career is ruined!
(Score: 4, Insightful) by c0lo on Tuesday December 04 2018, @11:31AM (44 children)
Because the more predatory lenders and debt collectors, the better and more productive the small businesses will become, right?
Only, this has to be by the means of magic, 'cause there's no real life logic to drive towards this result.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 0) by Anonymous Coward on Tuesday December 04 2018, @12:33PM (7 children)
Are adults babies are what?
The worst part is that government is participating.
(Score: 3, Insightful) by c0lo on Tuesday December 04 2018, @01:46PM
It seems you don't know quite a lot about the real world.
But you somehow had the mystical revelation that, for everything that is bad in real-world, the govt and noone else is to blame.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 0) by Anonymous Coward on Tuesday December 04 2018, @06:27PM (5 children)
https://en.wikipedia.org/wiki/Predatory_lending [wikipedia.org]
Basically, if a lender is lending money and has no intention of servicing it like a "normal" loan. Typically, they manage this by burying the "hook" in innocuous sounding legalese in a 20 page document. You know, bigger army (of lawyers) diplomacy.
(Score: 0) by Anonymous Coward on Tuesday December 04 2018, @09:43PM (4 children)
I don't get it. Legalese is the product of a monopoly on adjudication that we call "government".
(Score: 3, Insightful) by Pav on Tuesday December 04 2018, @10:22PM (3 children)
Libertarianism is the fantasy that not being part of a power structure means you won't be enslaved or killed by one. Just visit Somalia... no government, but if you aren't in good standing with the local clan you're maggot meat. Democratic socialism is as close as we've managed to get as a species to dilute/distribute power. Democracy is our unintuitive answer to who should we trust to make decisions ie. everyone and noone. A high taxing economy answers a similar and related question - who should be trusted to run the economy ie. everyone and noone. Democratic socialism allows capitalism to exist without degrading to inefficient monopoly... and this is how it worked in 90%-top-marginal-tax-rate USA post WWI to Reagan... Unfortunately Reagan started the unravelling of the US, and neoliberalism has been unravelling the rest of the western world, and for some reason Libertarians think stripping away government even more will fix the problem.
(Score: 0) by Anonymous Coward on Tuesday December 04 2018, @11:43PM
Because those Libertarians are idiots who just want to be left alone to live their lives as they see fit. They start from a basic principle and then stop. "Freedom good" full stop. Trying to explain that limiting some freedoms results in greater freedoms for more people is like trying to tell flat earthers that the planet is spherical. They've already made their assumption and their entire personal identity is flowing from that one simple idea.
Everything after is just a bunch of hand waving jumping around nonsense to try and fit their initial assumption. However there are rational Libertarians, but it seems most of them are marginalized by their own party for attempting a rational middle ground.
(Score: 2) by Bot on Thursday December 06 2018, @12:20AM (1 child)
>Democratic socialism is as close as we've managed to get as a species to dilute/distribute power
It is also the hegelian synthesis the actual elite wants, until technocracy can be implemented.
Power now resides in money. Credit is cancer. Your hard earned money is indistinguishable from the one central banks make out of thin air.
Account abandoned.
(Score: 2) by Pav on Thursday December 06 2018, @02:04AM
Power now resides in money? It ALWAYS did... democratic government was supposed to be an answer to that problem, and to be honest it was after WWII, and took some time for power elites to subvert it as much as they have. Still, democratic government continues to be a lever that can be used to regain control - in an ungoverned oligarchy that wouldn't exist. Credit is cancer? This is a symptom of the weakness of democratic government - specifically the strict regulation around credit that was repealed through lobbyist pressure. Paper money is certainly not the issue... plenty of economies crashed in the days of gold... even sometimes BECAUSE they were gold eg. the Spanish Empire deflating their own economy and also the economies of western Europe with gold and silver from the Americas. Masa Musa, purportedly the richest man in history, singlehandedly caused ten years of inflation on his way through Egypt on his way to Mecca. BTW, better extraction methods are going to destroy golds value. Most gold deposits are in quartz matrices deposited in deep sea volcanic vents, most of which are subducted long before they can become part of a continental crust - when deep sea mining becomes a thing gold will plummet in price. Aluminium used to be a precious metal after all.
(Score: 5, Insightful) by Thexalon on Tuesday December 04 2018, @12:42PM (34 children)
It's the "logic" of libertarian-land, a mythical nation where businesses never engage in rent-seeking nor use any deceptive practice, oligopoly and monopoly don't exist, and government action never has a legitimate purpose. A place where "the magic of the markets" fixes every problem, even the ones that aren't short-term profitable to fix. A place that has never existed outside of the minds of Ayn Rand, Ludwig von Mises, and their fanboys.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 3, Interesting) by Arik on Tuesday December 04 2018, @01:24PM (17 children)
No, that's a straw man and a distortion. Libertarianism is actually the only political ideology which deals with rent-seeking explicitly. It posits not an environment where rent-seeking magically goes away for no reason, but one where it is *minimized* by the simple expedient of *minimizing* the ability of the state itself to hand out favors first and foremost. If officeholders no longer have so much power to hand out rents, then it makes sense that fewer would spend time and money seeking favors, no?
"oligopoly and monopoly don't exist"
Again, a deception and a distortion. Again, unlike other political ideologies, libertarianism actually addresses these issues instead of sweeping them under the rug, ignoring them, or embracing them. Monopolies often, if not always, stem from the original monopoly - the government itself. They use that government ability to hand out favors, first to gain their monopoly, then to maintain it. Reducing the ability of the government to hand out such favors is a simple and obvious step to reduce the negative impact of monopolies and would-be monopolies, and only Libertarians advocate taking it.
"and government action never has a legitimate purpose"
That's not even a distortion, it's full-fledged nonsense. Libertarians hold to the legitimate purposes of the government as described in (among other places) the US Declaration of Independence, while others by expanding the list towards infinity dilute and distract from those purposes.
Your post reeks of projection.
If laughter is the best medicine, who are the best doctors?
(Score: 2, Insightful) by Anonymous Coward on Tuesday December 04 2018, @02:33PM (5 children)
Yes, because only the government can engage in rent-seeking and trading it. No, the Pickertons were angels.
(Score: 2, Informative) by khallow on Tuesday December 04 2018, @10:50PM (4 children)
Exactly. Welcome to the coal police [wikipedia.org], Buttercup. In that link, it describes how the state of Pennsylvania legalized the very sort of rent-seeking you claim to care about with the Pinkertons.
(Score: 2) by Mykl on Wednesday December 05 2018, @01:33AM (3 children)
Nice single data point. Let's get back to TFA and the legal loopholes being exploited at the moment.
This is clearly not government-sponsored rent-seeking. It's a loophole in the law, one which was not intended for the purpose to which it is being used and which the government is hopefully working to close off in order to protect people.
A libertarian utopia would make no attempt to address the problems outlined - after all, it's technically legal and "the market will sort it out"!
(Score: 1) by khallow on Wednesday December 05 2018, @02:57AM (2 children)
Not my single data point, let us note! I merely illuminated how in the example given the Pinkertons acquired so much power back then.
To the contrary, there are four ways the government (here the New York state government and its local governments) sponsors this. First, through the loopholes in the law that you already mentioned. It doesn't matter if this is an unintended consequence or not. Second, through the New York City Marshall who is sending these debt collection orders through like a factory and collecting 5%. Finally, there's the court case filers who are automatically processing these claims. They claim it's a money loser for them, but maybe it's not. One mentioned doing eight a day with same day service for $225 a pop. That's $1800 a day.
Finally, New York state uniquely has the muscle to coerce nationwide banks into giving up their clients. The largest banks all have a strong presence in New York City, the financial capitol of the US, and hence, are vulnerable to New York state government abuse. That's really how one can inflict so much harm on people on the other side of the US. Alabama, for example, couldn't pull that off.
(Score: 2) by Mykl on Wednesday December 05 2018, @03:27AM (1 child)
But would a confession of judgement clause be made illegal in a Libertarian utopia? I suspect the attitude would be "if you don't like the terms then don't sign the contract" with no allowance for deception, legalese etc.
My position is that Libertarians are no better equipped to deal with dodgy contracts (and likely less equipped) than other societies.
(Score: 1) by khallow on Wednesday December 05 2018, @04:06AM
Depends. A fair number would disagree that one can sign away rights in a contract. And even of those who do have that opinion, a contract made in bad faith would void that confession of judgment.
(Score: 5, Insightful) by Immerman on Tuesday December 04 2018, @03:22PM (8 children)
What makes you think rent-seekers need government help? There's vanishingly few markets where the upstart little guy can compete on equal footing with large established players, which means most markets are naturally dominated by a few large businesses ripe for forming an oligopoly - at which point it's nigh-impossible for any new competition to emerge, since the established players can simply coordinate to deflate profits, even operate at a loss until the new competitor is driven out of business. It happens all the time today, without any help from governments.
If you want anything resembling a free market, then you need some authority to keep businesses from becoming so large that they can dominate that market - in fact I would venture the opinion that limiting the accumulation of excessive economic power by private individuals is one of the most legitimate justifications for a Government. Without that, your choice is only between whether the large businesses corrupt the government, or operate the military/police directly without any illusions of liberty or justice. Our species has a long history with that already, and I for one have no interest in moving back in that direction.
(Score: 2) by Arik on Tuesday December 04 2018, @11:38PM (7 children)
The observable fact that successful ones always turn out to have it would be a good pointer in that direction.
"There's vanishingly few markets where the upstart little guy can compete on equal footing with large established players,"
True.
"which means most markets are naturally dominated by a few large businesses ripe for forming an oligopoly"
Nonsense.
Alternative explanation - it means that established markets have been (and appear to almost inevitably be) over regulated, creating the conditions for oligopoly to rise and be nurtured.
It's a simple equation. The more power the government exercises over the market, the more the incentive for all the various players in the market to lobby the government for rent.
The incentive may rise in a roughly equal fashion, but of course the ability does not. Inevitably, when the government power being exercised over a market is expanded or increased, this leads to increased lobbying efforts, and the lobbying efforts of the largest, best financed players are notably more effective than those of smaller, less established players with less means. And this is a clear and certain route to, if not monopoly, at least something very oligarchical.
Am I saying this is the only source of monopolies? No, of course not. But it's the elephant in the room. Trolls laugh at libertarianism, but it's the only ism on the table that actually makes reference to that elephant and talks about him openly. How many monopolies would we have left if we got the government out of the business of picking winners and losers in the market? We'll never know if we never go, but there's good reason to believe it would be a lot less of an issue if we did go. Point to me a single historical monopoly that clearly doesn't have its roots in state 'regulation' of the market. The very earliest trading monopolies in the middle east were creations of the very first hydraulic states, and I can't think of a single documented example from any of the historically documented societies that lacked a central authority with broad power over the market. There doesn't seem to have been any real problem with monopolies in northern Europe, for instance, prior to the Christian era which brought with it the concept of kings having such powers 'by divine right. (An aside, but this is why so many Kings specifically were converted when their subjects wanted nothing to do with it. The old north-european Kings before Christianity were elected officials with relatively limited powers.)
All the way back in the bronze age, there were a few *natural* monopolies btw - no one in the near east had a great source of tin, it had to be traded a very long ways, and whoever had physical control over the source or the trade routes would exact a percentage in tax whenever it passed their way. Most of the gold was produced by Egypt - taken by the Pharoah and then traded for tin, among other things. But natural monopolies are really a different subject, most of the monopolies we see have no connection to that anyway. And notice the connection to government, even there - so what if the gold comes from Egypt? Big deal. What made that geographical concentration into a formidable monopoly was the authoritarian government, the notion that Pharaoh himself owned all the gold in the ground, along with his soldiers and his slaves, gave him a monopoly - not geographical concentration alone.
Anyway there are a handful of early 19th century US cases that are alleged to have occurred in an unregulated environment - but they all seem to have arisen out of the conditions of the railroad industry, and *it* was certainly the creation of government privilege and regulation - nearly every mile of track of was built on public land simply *given* to the chosen companies and even the construction was often subsidized either directly or indirectly - and they certainly did a lot of lobbying over the years when this network was being built. So the railroad industry was heavily regulated virtually from day 1. And while rail is not all that important today, with most of our shipping going over freeways with semis for many decades now, back when Standard Oil and US Steel were forming these railroads were the only game in town.
"If you want anything resembling a free market, then you need some authority to keep businesses from becoming so large that they can dominate that market"
Well, perhaps. But you're putting the cart before the horse. What makes you think that authority can be trusted to use the power it's given to the end you desire? When it will have every possible incentive to do the opposite...
Perhaps before we start trusting the government with power to go out and prevent monopolies from forming, we first get to see it stop using it's power to go out and *help* monopolies form, or to *maintain* them in their position? If they do that, and we still have problems left, *then* we can think of giving them positive power to rectify it. But if they can't even quit aggravating/potentially causing the problem themselves for a few years, how will we even know if they need it? And if they can't quit doing harm, doesn't it seem irresponsible to give them even more power in response?
If laughter is the best medicine, who are the best doctors?
(Score: 2) by Pav on Thursday December 06 2018, @01:40AM (6 children)
The East India Company is an example of what you want... ie. a company that grew into a monopoly player that naturally arose from an unregulated market (as they INEVITABLY DO where there's no regulation). Even mathematics shows that unregulated capitalism leads to monopoly ie. game theory, specifically "competition between economic entities of unequal power". An analysis reality as we understand it, of all financial data that could be accessed... four centuries worth, shows that unregulated capitalism leads to monopolies and low growth - Pikettys analysis even showed that only when accumulated capital was weakened (by disaster, war etc...), or was heavily regulated by government, did economies go from low to healthy growth. BTW, the East India Company formed its own fleets and armies, and conquered the Indian subcontinent - no governments required (other than those that were conquered). "The Company" treated people just as harshly as one would expect from an oligarchy, until 1/3 of Bengal starved to death causing a British public outcry forcing the British government to slowly bring the company under some control through GOVERNMENT REGULATION. The Company had sparked the American Civil War also - it lobbied for the tea tax, which was levied against all importers of tea except the East India Company itself. It's also interesting that the Indian Rebellion of 1857 was against the East India Company because it was literally THE governing body of India.
(Score: 2) by Arik on Thursday December 06 2018, @06:20AM (5 children)
ROFL
You have to be kidding me.
The royal monopoly chartered by Queen Elizabeth (I) to invade India is your example of a monopoly arising without state support?
I'm not sure what you're smoking but lay off for a bit, you're out there.
If laughter is the best medicine, who are the best doctors?
(Score: 2) by Pav on Thursday December 06 2018, @09:13AM (4 children)
That's just BS. Of course they needed Elizabeth I's permission to sail to the Indian Ocean using WAR TROPHYS from the Spanish Armada. Britain was a middle power in Europa and certainly no naval power, which is why they needed help from the weather to defeat the Spanish Armada, and the apprentice traders of the East India Company needed Spanish and Portugese ships to kick off their venture. Their aim was to break the Spanish and Portugese monopoly on trade, but once the new East India Company got out from under their sovereign it was unregulated capitalism at its finest. After some luck and good management they gradually became the new monopoly, built up their fleets and then their armies and crushed populations in half the world (including North America) as the gods of capitalism intented.
(Score: 2) by Arik on Thursday December 06 2018, @11:25AM (3 children)
A freaking royal monopoly.
Again, get off the drugs. You're making less than zero sense.
If laughter is the best medicine, who are the best doctors?
(Score: 2) by Pav on Thursday December 06 2018, @12:45PM (2 children)
Who's the one smoking the finest crack? You do realise that the East India Company wasn't the only British trading company eg. the Royal Africa Company, the Hudson Bay Company, the Company of Scotland etc... etc... etc... etc... The American War of Independance was basically a war of survival for some of these smaller trading companies against the East India Company, and convincing the public it was all about democracy. Britain gained much of its empire unintentionally, by reabsorbing the East India Company! Learn some history.
(Score: 2) by Arik on Thursday December 06 2018, @11:08PM (1 child)
"Learn some history."
Says the man arguing from utter ignorance and scoring an own-goal as a result.
If laughter is the best medicine, who are the best doctors?
(Score: 2) by Pav on Friday December 07 2018, @12:41AM
I'm certainly not defending the 16th century British monarchy... they were wanting to give themselves the best chance of company profits for the aristocracy after all. But other than giving the company its modest start, and some dubiously beneficial tax breaks this royal charter you recoil in such horror from was of little benefit. Britain became powerful because of the monopoly the East India Company ruthlessly achieved, NOT the other way around. At the time England was a rural backwater whos biggest industries were wool, tin, lead and coal... with the only manufactured goods being handmade cloth due to poverty providing cheap labour (the technical finishing/dying work was actually done by the Dutch!). Yes, England was once a poor country and profits hard to come by. The royal charter was basically a privatisation of recently acquired crown property too expensive to otherwise keep (ie. Spanish and Portugese ships captured from the Spanish Armada), and tax breaks on trade in certain products from certain regions to English ports (as previously mentioned, a small/poor market)... the "monopoly" was only on these tax breaks to marginal ports with small markets. The East India Company faced competition in the early days, but with growing power a REAL monopoly was attained by company mercenary armies driving out the Portugese, Spanish, Dutch and also dominating and/or overthrowing governments in India, Asia, the Carrabean (ie. "The Indies") and Africa. Britain attained its empire in large part by resorbing this runaway capitalist enterprise.
(Score: 1) by nitehawk214 on Tuesday December 04 2018, @05:46PM
Lol, no. They would simply bribe the politicians to give themselves the power to hand out rent.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 1, Insightful) by Anonymous Coward on Tuesday December 04 2018, @09:47PM
Pretty sure this is all religious thinking I didn't bother finishing after reading the first paragraph of wizardry.
I hope when you die god sends you to hell for worshiping a giant hand.
(Score: 1, Insightful) by khallow on Tuesday December 04 2018, @01:44PM (13 children)
Like enforcing unjust and arbitrary asset seizures for and against parties who don't even reside in the region governed? That sort of legitimate purpose?
On the latter part, government itself is the primary cause. After all, there's "too big to fail", secure rent-seeking, and a variety of comfortable entitlements for those who don't want to plan for the future.
(Score: 5, Interesting) by Thexalon on Tuesday December 04 2018, @04:38PM (12 children)
Your first error in logic is leaping from "One particular use of government power is wrong" to "All use of government power is wrong". And even in this case, you're being over-broad: In a world where there's no asset seizure procedure organized by some universally agreed-upon body, what exactly do you do if somebody owes you money and doesn't pay? We know what happens in current markets without government controls, like loan sharks and drug gangs, namely shots are fired and people who just happened to be in the wrong place at the wrong time get killed.
Your second error in logic is your ongoing belief that no corporation ever seeks out monopoly power without government help, even though that's exactly what companies like Standard Oil did back before monopolies were illegal. As for rent-seeking, that effort is at least as old as Marcus Crassus, and it's not like there have never been periods of relative anarchy in the intervening 2100 years.
As far as I can tell, your argument goes something like this:
1. Bad stuff happens.
2. Government usually exists when documented bad stuff happened. That this might be due to the simple fact that humans have almost never been simultaneously without government and with writing is immaterial.
3. Ergo, all bad stuff is government's fault. Never mind that there are lots of other non-government actions that may have caused bad stuff to happen.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0, Troll) by khallow on Tuesday December 04 2018, @05:40PM (4 children)
You're the only one making that leap, just as you built up that pointless straw man of "government action never has a legitimate purpose". Libertarianism wouldn't have serious support in the first place, if that was what it was about. Instead, it's the egregious abuses of government that drive the belief and have made it popular. This whole mess of the story is driven by government.
After all, even if I've signed my rights to a court away, it shouldn't be legal for the lender to go to a remote court system under a different set of laws and steal my savings based on some flimsy pretext, counting me to be unable to fight back because of the cost of initiating a lawsuit in a distant venue.
But it is because New York can't pressure me directly, but they can pressure the banks who do business in New York to comply.
(Score: 3, Insightful) by Joe Desertrat on Tuesday December 04 2018, @10:38PM (3 children)
Libertarianism has support among most of its followers simply because they believe they could get away with something they currently can't. Like most political belief systems, the reality is far different from the fantasy.
(Score: 0, Flamebait) by khallow on Tuesday December 04 2018, @10:44PM (2 children)
Like taking out a loan without having your savings seized on the other side of the country by a flimsy pretext processed by the right, convenient government venues? We must be terrible people for wanting to get away with that!
I want to get away with freedom. What's wrong with that?
(Score: 0) by Anonymous Coward on Tuesday December 04 2018, @11:48PM (1 child)
It is called getting people elected to fix the bad laws, not deciding that all government is bad because it restricts your ability to do literally anything you want. The blanket statement "taxes are theft" is the kind of generalization that gets people to roll their eyes and lump you in with the crazies. I'm not sure if I've seen you specifically say that, but it is the Libertarian mantra.
(Score: 1) by khallow on Wednesday December 05 2018, @03:21AM
It's called a straw man argument. Libertarians are well-known for acknowledging that there are natural restrictions of rights when they conflict with other peoples' rights.
Not everyone does that and the blanket statement is far from the straw man in your first sentence.
(Score: 2) by curunir_wolf on Tuesday December 04 2018, @05:50PM (6 children)
Standard Oil is always used as the poster child for why we need a big, powerful central government to keep corporations in check. But is that the real story? What did Standard Oil really do?
Well, in 1865, when Rockefeller’s market share was still minuscule, a gallon of kerosene cost 58 cents. In 1870, Standard’s market share was 4%, and a gallon cost 26 cents. By 1880, when Standard’s market share had skyrocketed to 90%, a gallon cost only 9 cents — and a decade later, with Standard’s market share still at 90%, the price was 7 cents. So why break up Standard Oil? It seems the folks the government was "protecting" wasn't really the consumer, was it? Because Standard Oil was helping them, not gouging them as the story goes.
"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary." - H.L. Mencken
I am a crackpot
(Score: 2, Interesting) by khallow on Tuesday December 04 2018, @10:47PM
Let us note this wasn't merely coincidence. Standard Oil gained market share in the first place because it was cheap. And over the course of those years, it created a massive, efficient system for extracting, shipping, and processing petroleum.
(Score: 2) by dry on Wednesday December 05 2018, @04:51AM (4 children)
So the take away is that when a gallon of kerosene should have cost a few pennies, Standard Oil charged 7 cents a gallon. Or perhaps Standard Oil only charged 7 cents a gallon at a time when it cost 8 cents a gallon to produce to make sure there was no competition.
Without a lot more information, it is hard to say what the market price for a gallon of kerosene would have been with competition. All you're pointing out is that kerosene got cheaper as industry became better at extracting it and refining it, which with how common crude oil was and how fast technology advanced, is to be expected.
(Score: 2) by curunir_wolf on Wednesday December 05 2018, @11:27PM (3 children)
Well, I could have provided a LOT more information, but this didn't seem the right forum for all that. The fact of the matter is that there was NO legitimate reason for government intervention into that market at the time. It didn't help consumers, because they were getting kerosene at the best possible price, primarily due to the efficiencies introduced by Standard Oil. With those efficient processes known, it was easy for competitors to come along and charge similar prices. There was no evidence of Standard Oil (or ANY company, EVER, other than government-owned enterprises) that sold at a loss to drive out competition and later raising prices when the competition is gone.
If you're really interested in the truth, and not just spreading myths to support tyrannical and useless big government regulation, I would refer you to John McGee and his excellent articles in the Journal of Law and Economics. You can also check out the research of Ronald Koller on the history of federal predation cases. He found NO evidence of a monopoly supported by predatory pricing in 80 years of the Sherman Anti-trust Act.
And as for the government "solution," did it actually work? Well, it certainly made the Rockefellers richer than ever in the succeeding years after the breakup. And after it was broken up into 33 companies, it now exists as just three: ExxonMobile, Chevron, and BP.
I am a crackpot
(Score: 2) by dry on Thursday December 06 2018, @02:56AM (2 children)
Well, according to Eliot Jones https://archive.org/details/trustprobleminu00jonegoog/page/n6 [archive.org], we have statements such as,
As well as the problems with transport,
Now, I don't have time or inclination to spend tons of time researching your experts and other experts about Standard Oil, but the courts did decide they used their monopoly position in predatory ways.
More recently, I did experience how MS used their monopoly in predatory ways and didn't like seeing competition killed, even when they had a better product, due to unethical and illegal business moves.
Generally, since there has been successful prosecutions on anti-trust grounds, businesses have been much more careful, which has been a benefit and likely results in much less abuses.
Personally I'm pretty anti-authoritarian, whether it is government or private business. Government at least here, is limited by a Constitution and the fact that it is easy to replace through elections. When private business gets abusive, it is much harder to do much about it, with government seeming about the only solution. You can look at actions of the Pinkertons as an example of how private police can function, and a long history of private businesses being very abusive, to the point of cutting off workers arms when they weren't productive enough and the business can get away with it, such as Columbus on his 3rd trip desperately trying to raise the funds to pay of his investors.
Best is if the different forces largely cancel each other out.
(Score: 2) by curunir_wolf on Thursday December 06 2018, @10:45PM (1 child)
Elliot Jones and Ida Tarbell wrote extensively about Standard Oil. They had an axe to grind, both of them, against Standard Oil, and their writings have been discredited in the years since. The assertions by both of them have been proven false. Even the quotes you provided are conflicting - was Standard charging too much or too little? He seems to argue both. But Standard was successful ONLY because of efficiency and the purchase of verticals. Even with a large market share, competitors were many and nimble, and they HAD to keep prices low to remain competitive.
It's not that I think there is no role for government in regulating large businesses, only that most of those efforts, in retrospect, cause more harm than good. How did Netscape fare with the government going after Microsoft? Does Microsoft behave better now? Consider what the real change was. Microsoft went from pretty much ignoring Washington, to devoting a huge budget to lobbying and campaign contributions. In fact they became the largest corporate investor in lobbying. So it was nothing but a bureaucratic shake-down that helped no one.
When people wake up to this myth that government protects people from corporations, and realize that the big government / corporation bureaucracy is actually a partnership designed to screw everyone else, then at least we can start to do something productive about it.
I am a crackpot
(Score: 2) by dry on Sunday December 09 2018, @03:57AM
Hmm, looking, I can't find any evidence of either being discredited. Elliot Jones seems to have mostly disappeared from history and all I can find is praise for Ida Tarbell along with "The History of Standard Oil".
As for the quotes, it's pretty simple, low prices when there is competition and high prices when there is no competition. Whether that was abusing their monopoly, I don't know, but could well be. Even today, these problems continue. My ISP charges all different rates depending on Province and how much competition there is. I pay a $100 for 250 GBs, in some Provinces, it would be $40 for unlimited from the same company, due to competition.
As for the MS anti-trust case, Netscape was really the wrong underdog in the fight. DrDOS, Lotus, even OS/2 would have been better cases to show the anti-competitive behaviour. And then when the government changed and let them off, it showed them the power of having the right type of corruption. IBM is a better example as they tried like hell to honour their agreements from their anti-trust case.
You're mostly right about the government/business synergy, especially bad in places like the US where people are really tribal and vote for their people no matter what and the best that can be hoped for is that one parties people stay home.
Here the parties have usually worried more about the voters. The party that orchestrated the free trade bullshit that saw all our good jobs head south got annihilated in the next election, reduced to 2 seats and the party no longer exists at the Federal level. Imagine if America had reacted to NAFTA like that, your politicians might pay more attention to the voters instead of the lobbyists.
Unluckily, that's changing in this age of popular-ism, instead of politicians running on promises to do good government, it is divide and conquer, vote for my team no matter what, and that does not lead to good government, rather bullies getting power and being more interested in bullying then doing what is the best for the people.
(Score: 2) by Beryllium Sphere (r) on Tuesday December 04 2018, @07:50PM
Adam Smith, in fact, was highly alert to the issue of business misconduct while documenting the merits of freedom and competition.
(Score: 2) by JoeMerchant on Tuesday December 04 2018, @11:31PM
The mythical nations of libertarian-land and Marxist-socialism need to get together and have a baby - it might look something like Denmark.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Wednesday December 05 2018, @03:10AM
I thought to sole solution to Tyranny was a strong rope?