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From: nrh@inmet.UUCP
Newsgroups: net.politics
Subject: Re: Re: Supposed monopolies: Standard Oi
Message-ID: <7800366@inmet.UUCP>
Date: Tue, 6-Aug-85 00:20:00 EDT
Article-I.D.: inmet.7800366
Posted: Tue Aug  6 00:20:00 1985
Date-Received: Sat, 10-Aug-85 05:05:33 EDT
References: <1105@umcp-cs.UUCP>
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Nf-ID: #R:umcp-cs:-110500:inmet:7800366:000:1912
Nf-From: inmet!nrh    Aug  6 00:20:00 1985


>/* Written  1:15 am  Aug  5, 1985 by umcp-cs!mangoe in inmet:net.politics */
>/* ---------- "Re: Supposed monopolies: Standard O" ---------- */
>In article <9561@ucbvax.ARPA> fagin@ucbvax.UUCP (Barry Steven Fagin) writes:
>
>>The following table shows Standard's
>>difficulty at holding a monopoly on oil refining:
>
>>date	market share
>>1899		90%
>>1904-1907	84%
>>1911		80%	
>
>I dunno, 80% seems pretty damn large to me.

That's okay -- 80% is hardly a "monopoly", especially when independents are
growing quickly.

>>...

>Which goes to show another reason why monopolies are undesirable; they can
>do a lot of damage when they collapse.  The current distress in the auto 
>industry is a prime example.

I don't see that a large company has to be a monopoly to cause problems
when it collapses -- all it has to do is employ enough people and
resources.  Of course if the government tries to help out the problem
can get worse in two ways:

	1. The government can succeed in saving the company, 
	which amounts to rewarding incorrect allocation of resources.
	(At this point the company may (like Chrysler) do somewhat better,
	but the lesson becomes clear -- if you've the clout, and you're
	in trouble -- don't bother fixing things -- it's easier to yell
	for help).

	2. The company can fail despite the aid -- and guess who gets
	the bill for delaying the inevitable?  Do you think the
	executives don't get paid?

One of the odd public misperceptions of corporate collapse is that the
resources owned by (say) the automobile companies would simply
disappear if the automobile companies were to fold.  Not so!  Those
factories, furnaces, office buildings, computers, (and yes) employees
become available for other purposes.  Among them the formation of 
new and better (as well as new and worse!) automobile companies, and
the general lowering of price of these items (supply increased).

Nat Howard.