From: glevy@PRATT.EDU
Date: Wed May 02 2007 - 09:57:49 EDT
>>>The question is whether the natural monopoly’ virtues might be isolated from the prejudices it shows under capitalism. Its virtues concern the technological progress due to the upper average profits attracting rival capitals.<<< Hi Alejandro: What is the empirical evidence which shows that monopolies and oligopolies have a great concern for technological progress? In an oligopolistic market with product differentiation the emphasis is generally on promotion (advertising, marketing) rather than on developing technological breakthroughs and engaging in price competition. Furthermore, entry into such a market is generally made possible not by technological progress but by promotion (and, of course, large sums of money capital to open operations and/or merge with other firms already in the market). >>> Maybe Rothbard couldn’t sound convincingly for you. What do you think about the following quotation from a market socialist? […] for it remains to be seen whether buyers will accept the price for the given supply and thus confirm the correctness of the suppliers’ decision or will force a change of the market by putting to the seller the alternative of either reducing the price or renouncing the sale of part of the supply. The theory of monopoly, as elaborated through decades of economic study, recognizes that even private monopoly need not necessarily pursue an oppressive price policy. Eduard Heimann (1934): “Planning and the Market System”, Social Research, vol. 6, pp. 486-504. <<< I agree that "it remains to be seen". As for the validity of the claims of the mainstream theory of monopoly, that also "remains to be seen". Since Heinmann wrote his article, there has been some relevant experience in "socialist" nations such as Hungary and the former Yugoslavia which highlight how social problems can occur with at least a certain kind of "market liberalization" and "market socialism". For instance, in Hungary there was the experience of "departmentalism" which could be seen as undermining the socialist principle of solidarity. In Yugoslavia, you had double-digit inflation (as well as high rates of unemployment) for extended periods. If one wants to consider the actual possibilities for "feasible socialism" (Nove), it is more important, in my view, to examine actual historical experiences than mainstream economic theories. In solidarity, Jerry
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