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ANTI-COMPETITIVE PRACTICES - CONT'D

Boycott

Companies A, B and C agree not to purchase from manufacturer Q unless Q refuses to sell to company X which is in direct competition with A, B and C. This type of action would certainly raise prices. But raising prices fosters competition. Other companies will show up with other solutions, bypassing the manufacturer Q. A boycott does not work in the middle to long term. It is pointless. Eventually the free market reestablishes itself. There is no need for government intervention.

 

Regulation costs

This is yet another anti-competitive practice whose fault falls squarely on politicians and bureaucrats shoulders, through artificial monopolies. In this case, a governmental regulatory monopoly. Large companies approve of costly, complex and bureaucratic regulations simply because it raises the cost would-be competitors would have to pay to enter the market. It is an artificial method of keeping artificial monopolies going. It is anti-competitive and only governments can impose this. Solution? Get rid of governments!

 

Forced retail pricing

This occurs when a manufacturer only sells to retailers if they agree to sell at a pre-specified price. No discounting is allowed. High prices are maintained. Again, high prices foster competition. The higher the price, the sooner competition will take care of this problem. No bureaucrats necessary.

 

Subsidies

This is yet another anti-competitive aberration only made possible through the existence of governments. This is when governments “pay” producers or manufacturers to create goods or services and sell them at a price that is not economically viable. In other words, the government gives money to keep products and services at impossibly low prices.

This practice goes far beyond dumping, since the objective of dumping is temporary (it lasts for as long as it take to get rid of the competition). But in this case, it can last forever, because governments can always print money. The problem with this kind of action is that it prevents competition forever. At the same time, it spends our tax money on things that we would not normally purchase.

The issue is not the free market, but the governments who create these aberrations. Dumping is persecuted and prosecuted with no quarter, subsidies, on the other hand, are praised. As usual, everything is upside down. Small and temporary damages are demonized while permanent and massive damages are extolled. Your government in action. Got it?

 

Conclusion of anti-competitive practices

We could keep going down the list, but we believed that we have already made our point. All anti-competitive practices either do not work at all, do not work for long or, and this is the absolutely worst case scenario, they are created and sustained by governments themselves.

Furthermore, the fastest and easiest way to overcome non-government anti-competitive practices is through commerce. Buy somewhere else and ship it to your home. Alas, this is not possible, again, thanks to artificial government boundaries and borders.

It is ridiculous to have bureaucrats persecuting and prosecuting manufacturers, wholesalers and retailers for minor issues at best, while creating massive economic damage themselves.

 

CONCLUSION

The free market is a wonderful self-correcting system; all it requires is to be left alone… which is exactly what bureaucrats and politicians won’t do.

A free market left to its own devices is a ruthless evolutionary machine where only the economically fit survive and the only way forward is by meeting customer’s needs. Yet, it would seem that there must be something wrong with this premise since every single politician demands to “manage” the market to “improve” it. What they achieve is the exact opposite. And that’s how we found ourselves here. Immersed in the largest, most damaging, most encompassing, most controlling and unforgiving monopoly of them all: the government.

Wouldn’t it be nice to introduce some competition to governments since they are so keen on protecting and fostering it? One problem though… politicians would be out of a job in a second…. come to think about it, that would not be a bad thing at all!

Note: please see the Glossary if you are unfamiliar with certain words.

 

 

 

 

 

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