Objections

Objections to capitalism, liberty and anarcho-capitalism

This page can start by listing objections and concerns, and link to more detailed sections to analyze and answer the problem.

Capitalism does not produce public goods

See Public goods.

Capitalism under-produces what society needs

More details TBD

Capitalism leads to monopolies and cartels

It is important to understand what constitutes a monopoly and under what conditions it leads to monopolistic effects (lower quality and higher prices). What are the forces which encourage concentration? What are the forces which encourage fragmentation? How does one define an "industry" or "sector"? What are substitution effects?

Also, it is interesting to look at historical data on monopolies, in light of the above analysis. Which problems occurred? Which forces actually came into play?

For one, identifying a monopoly requires defining the scope of the market. If defined arbitrarily narrowly, it will apparently lack adequate substitutes. Is the iPhones in the market for large-screen touch-based smartphones, consumer smartphones, cellphones, communication devices, or social networking tool?

But more importantly, competitive forces (both actual competition, potential competition, and indirect competition) are sufficient to regulate how much control a company (or a cartel of colluding companies) can get over the market. Despite its dominance of a market, the company will always feel the pressure to perform well or else it will lose customers to rival companies. Anti-competitive conditions can only arise legally from the government (and illegally through other kinds of force, like the mafia). Such government-granted monopolies are indeed harmful to consumers and the market.

Mainstream economists have this theory of so-called "natural monopolies", whereby if a company manages to get far ahead in a capital intensive business with economies of scale, it creates a very difficult situation for competitors and allowing a long-term monopoly (which has bad effects on prices and quality). This theory is often used to justify government stepping in with anti-trust regulations, to "fix the market" and regulate the "unavoidable" monopoly (therefore actually sustains the monopoly). But as Thomas DiLorenzo explains in this presentation, another presentation, and paper, and history shows that such sustained natural monopolies do not exist in practice. All sustained monopolies to date can be traced back to some unfair advantage secured through government (diamonds, cable TV, phone service, railroads, ...). Also, he explains that the supposed problem of "excessive duplication" is also a consequence of a pre-existing public utility. Because of their lack of pricing, economic calculation is impossible so trade-off cannot be made on a rational basis. Even so, this can be mitigated with "competition for the field", whereby utility companies bid for a monopoly contract which is open on auction again every few years.