Phillip Blond

Dear Lord, please, what have we done to deserve drivel like this in the national newspapers? Phillip Blond manages not only to make highly questionable statements, he can\’t even parse the logic of his own factoids.

Contrary to received opinion, free markets – unless subject to civil regulation, asset distribution and persistent intervention – always tend to monopoly.

They do?

I\’ll agree that some markets tend towards monopoly: where there are network effects being the most obvious (possibly even the only) example. But always, everywhere?

Tosh.

But this is the real beauty:

The New Economics Foundation has shown that global growth has not aided the poor. In the 1980s, for every $100 of world growth, the poorest 20 per cent received $2.20; by 2001, they received only 60 cents. Clearly neo-liberal growth disproportionately benefits the rich and further impoverishes the poor.

So that poorest 20% gets a 60 cent pay rise. This is not aiding the poor? This isdriving them further into impoverishment?

Leave aside whether we\’d like that distribution to that bottom 20% to be greater than it is (we would) and concentrateon precisely what he\’s saying.

A rise in incomes is further impoverishment.

What heinous sins have we committed to deserve this sort of nonsense?

BTW, you might not be all that surprised to find that Richard Murphy likes this piece. Sigh.

12 thoughts on “Phillip Blond”

  1. “Contrary to received opinion, free markets – unless subject to civil regulation, asset distribution and persistent intervention – always tend to monopoly.”

    Looking at sectors like Telecommunications, Post, Rail, energy etc., it is hard not to come to the exact opposite conclusion that long term monopoly situations ONLY arise through government intervention. Any examples of monopolies being maintained anywhere without support from government for long periods of time????

  2. …it is hard not to come to the exact opposite conclusion that long term monopoly situations ONLY arise through government intervention.

    Exactly right.

    OK, I know I’m preaching to the converted here, this sort of stuff really grips my shit. It’s what comes of the sloppy use of language.

    It is not monopolies in themselves that are the problem, but coercive monopolies that we need to worry about.

    Imagine a small village with one village shop that is already barely surviving. That shop has a monopoly on trade within the village. But is there anything to stop a competitor from setting up shop, so to speak? No, not apart from the likelihood that both shopkeepers will starve. Nor are the villagers coerced into buying from the shop; they can, if they wish, go to some other village or the big supermarket down the road.

    It is only coercive monopolies that can use the power of the law to lock out their rivals and to prevent competition. And how are they able to do that? Only with help from their cronies in the government. It is governments that create the predatory conditions and allow them to continue, not free markets.

  3. “It is only coercive monopolies that can use the power of the law to lock out their rivals”

    Hence the illegality of the abuse of monopoly powers, not monopolies per se. I could be a monopoly supplier of quill pens by being the only supplier left selling them – because no-one wants them – yet I’d hardly be in a position to abuse that monopoly.

  4. “I’ll agree that some markets tend towards monopoly: where there are network effects being the most obvious (possibly even the only) example.”

    But what of the so-called “natural monopolies” , where there are substantial enterprise or industry economies of scale so that one large producer is able to undercut all actual or potential rivals:
    http://en.wikipedia.org/wiki/Natural_monopoly

    Consider fixed-line telephone operators before the advent of mobile phones and before state regulators obliged incumbent operators of fixed line services to share local loops with competitors. This would have meant potential competitors laying duplicate cables to premises so that customers would have a genuine choice of suppliers. The question then is whether both the separate owners of the duplicate local loops would have been able to recover their sunk costs?

    There are probably some instances of “natural monopolies” in the absence of state intervention but probably not a lot.

    Tim adds: Umm, Bob, fixed line telephone “networks” are where we get the phrase ” network effects” from.

  5. As for the poor getting ever poorer, average life expectancy at birth in Britain was c. 40 years in 1800 and c. 50 years by 1900. Nowadays it is about 76.

  6. Did you miss the delightful “Real wage increases in the top 13 countries of the Organisation for Economic Cooperation and Development (OECD) have been below the rate of inflation “, towards the bottom of his piece?

    “Real” in “real wages” means corrected for inflation, so it really doesn’t matter whether they… – oh – you know and I know, but for some reason he doesn’t know so why (oh why) does The Independent waste its money on this?

  7. But you’ll all be pleased to hear that this post is the top Google result for “Phillip Blond”.

    I went to find out who he was…got directed to Tim’s site…discovered he’s an idiot who doesn’t understand economics: job done.

  8. I think this makes sense if the numbers are right. If 20% get 0.6% of growth, and the other 80% get 99.4%, then they poorest 20% are getting relatively poorer. And although we can dispute the concept of ‘relative poverty’, as far as I am aware you believe it has some merit, if not that much, and as it only needs a tiny bit of merit to be true in this case, ‘impoverish’ it be?.

  9. Is there any home in the UK that isn’t, voluntarily, without a fridge, washing machine, TV and numerous other labour saving devices?

    So what if a rich person can spend £40,000 kitting out a kitchen with all the lates and greates gimmicks, even those at the bottom can still get the same functionality.

  10. “Is there any home in the UK that isn’t, voluntarily, without a fridge, washing machine, TV and numerous other labour saving devices?”

    Is there any child in the UK who is without proper clothes or food? ASDA sell George jeans for £5.

    “So what if a rich person can spend £40,000 kitting out a kitchen with all the lates and greates gimmicks, even those at the bottom can still get the same functionality.”

    So what if a rich person can spend £5,000 on a designer handbag. Even those at the bottom can still get the same functionality.

    Of course, there are kids in poverty. Because their feckless parents would rather spend the money on other things. I’d rather we addressed that issue than hand ever larger amounts of money to these useless people in the hope that some of it “trickles down” to the children.

  11. Tim, how did you calculate a 60 per cent rise? What this guy is claiming is that in 1998, the poorest 20 pct of the pop received a certain amount, then three years later, they received less. That’s a fall. Admittedly these figures are probably crap anyway.

    Tim adds: I said “60 cent” not percent. The actual stat he is quoting is that, of the increase in wealth, the poor receive less than they used to. Not of total wealth, only of the rise in wealth.

    What the stat shows is that the poor are becoming relatively poorer, while becoming absolutely richer.

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