Amazing how even socialism lite turns to the language of Stalinism, isn’t it?

Employees at a Pepsi-Cola Venezuela plant have been freed after being detained by the government for halting operations, Empresas Polar, the owner of the local Pepsi division, said late on Sunday.

The company blamed the production pause on a lack of raw materials but the country’s president, Nicolas Maduro, has routinely accused Polar, the country’s largest food and beverage producer, of slowing production or hoarding goods to spur product shortages in the Opec nation’s struggling economy.

Venezuela’s problems are a result of wreckers, not because their idiot Presidents have been following the economics of the madhouse for a decade.

Because, you know, it’s wreckers are the only reason socialism goes wrong.

43 thoughts on “Wreckers!”

  1. It is amazing how many of the problems that exist in capitalism are described as features not bugs by socialists ( and actually more or less I think what they identify and explain is largely correct) yet throw that same analysis at socialism and you ‘don’t understand it man, that is not real socialism.’

    Somehow if there was more democracy ( whatever the hell that means?) it would be alright.

    Capitalism naturally moves to monopoly, socialism to autocracy.

    You can do things to remedy or limit both, but they are features and no amount of whining will change the facts

  2. Capitalism does not naturally move to monopoly. Please name some monopolies that have been established without government intervention

  3. Arguably the most accurate description of Socialism I have ever read was by the late and much lamented Peter Simple – from the 1950s but as accurate today as it was then:

    “‘You may see Socialism as a great road, stretching to infinity across a barren, waterless waste. Along it trudge half the peoples of the world, bowed, manacled, parched, exhausted. By the verges lie the gaunt wrecks of crashed and burnt-out nations; and skeletons picked clean by vultures and bleached by the pitiless sun.

    Appalled by the prospect before them, certain Socialists, fainter in heart or stronger in head than the rest, have hesitated, halted or even turned back. These are now rebuked by Prof. G.D. H. Cole, who still steps stoutly ahead, undeterred, undeterrable, invincibly blind and cheerful.

    Be of good courage, he bids his wavering comrades. “Much has been done bacdly amiss in the Soviet Union,” he concedes but the Soviet worker enjoys “in most matters…an immensely enlarged freedom.” To throw away Socialism because it can be “perverted” to serve totalitarian ends is “to throw out the baby with the dirty bath-water.”

    This is familiar and most manifest nonsense. What has gone “amiss” in Socialist countries is not mere chance disfigurement, like a false moustache scrawled by a madman on a masterpiece. It is Socialism itself, taken to its logical conclusion.

    The death of freedom, the enslavement of the masses, the withering of art and culture, the restless, ruthless hunt for scapegoats, the aggressive folie de grandeur of Socialist dictators – these are no mere “perversions” of Socialistm. They are Socialism unperverted, an integral and predictable part of any truly Socialist system.

    We are not faced here with so much dirty bath-water surrounding a perfectly healthy, wholesome Socialist baby. The dirty bathwater is Socialism, and the baby was drowned in it at birth.”

    I think ‘the ruthless hunt for scapegoats’ the most appropriate phrase in the context of the Venezulean example above… Let’s hope, as I have suggested elsewhere that once the regime is overthrown, our own government opens up links with Venezuela by extraditing the ‘poll advisors’ who gave a veneer of legitimacy to the last elections as accessories to murder. The removal of Diane Abbott in particular, the UK’s second most prominent racist, is long overdue….

  4. If anyone in this country truly believes coca cola employees were ‘sabotaging’ production to bring down socialism in Venezuela, they must be mentally ill.

    Aren’t they embarassed at all supporting this maniac?

  5. So Much For Subtlety

    Rob – “Aren’t they embarassed at all supporting this maniac?”

    If they actually take part in the torture and murder of thousands, they can rest assured that British academia will welcome them with open arms.

    See Zygmunt Bauman for instance.

  6. Andrew M – it was apparently lawyers, HR people, and management.

    Robert Townsend would probably recommend it as an excellent way to speed up production 🙂

  7. Bloke no Longer in Austria

    Polar is Venezuela’s biggest brewer, it’s products are omnipresent in the country. It could probably quite happily live without franchising Pepsi.

    I was never a fan of it, I thought the beer a bit watery and fizzy.

    Chni up, chaps, the Socialists will get it right one day. Zimbabwe, Venezuela, DDR etc were all worth a try just to fine-hone the workers’ padaiseto come.

  8. @ Emil
    British Plasterboard aka BPB Industries had a natural monopoly of plasterboard in the UK for some years until Knauf started “dumping” some of its production in the UK.
    There may be one or two other examples.

  9. john77

    I don’t know the details but from your description it would seem as a temporary monopoly until another capitalist entered the market. Doesn’t seem to fit the bill for capitalism naturally moving to monopolies, rather it would seem as if capitalism moved away from a monopoly?

  10. Please name some monopolies that have been established without government intervention

    YKK zippers. But that was because the smart Japanese chap who started the complain made zippers miles better than anyone else has been able to manage before or since, and so everyone but everyone uses his zippers. I think part of his secret was also having a very mundane, unnoticeable product and also, judging by the lack of bitching from his customers, he didn’t take the piss on prices.

  11. Capitalism does trend naturally towards monopoly, but markets act as a sufficient counterweight. Capitalism without markets ends up in monopoly very quickly, I think.

  12. @ Emil
    Yeah – but you asked for a monopoly unimposed by government, so I gave you the one I remember.
    @ Tim Newman
    You’ve got your history wrong.
    IMI made the best zips until YKK, with protection from IMI in its domestic market, started “dumping” much cheaper plastics zips in the european market. IMI then merged its zip manufacturing business with its principal European rival (I think it was Austrian) but too many garment manufacturers chose the cheaper, albeit inferior, plastic product. I never had a IMI zip fail – I’ve had to replace a number of YKK zips.

  13. Monopolies are only an issue if they are uncontestable, as that allows the monopolist to profit by hiking prices without fear of competition.

    “judging by the lack of bitching from his customers, he didn’t take the piss on prices.”

    So even though YKK had a monopoly, it’s not at clear that it was uncontestable and it’s apparently clear that it wasn’t treated as uncontestable.

    🙂

    Any more examples of non-government-backed actually uncontestable monopolies?

  14. @john77

    Your original contention (which is being tested) is that capitalism naturally tends to monopoly. The prevailing view here is that this is bunk. Capitalism tears down monopolies as soon as they try to exercise any form of monopoly power. A temporary monopoly in which pricing does not deviate from a contested market is of no concern to anyone – there is no outward signal of a monopoly.

    Hence the requirement to find a monopoly where monopoly power has actually been exercised and sustained.

    Unless you can do that and, more importantly, demonstrate that it was sustained without the use of government power, your original contention fails.

    Pointing out that you have demonstrated a limited, temporary, unexploited monopoly doesn’t support your contention in any way shape or form.

  15. You’ve got your history wrong.

    Quite possibly. But I’ve never once had a YKK zip fail on me, nor have I, to my knowledge, owned something with an IMI zipper. I concede that I was writing from memory from an article I read about a year ago on YKK’s history and standards, and also that they have been charged with anti-competitive behavior by the EU, for whatever that is worth.

  16. MatthewL: capitalism without markets is fascism, correct? In this case then yes, capitalism could trend towards monopolies. But that is a very special arrangement. The standard is very much accompanying capitalism with markets. If nothing else because capitalism is not really capitalism unless you are allowed to trade with what you own. Ergo it is bollocks to state that capitalism tends towards monopolies whereas socialism tends towards something else. A more correct statement would be capitalism when combined with (certain types of) socialism tends towards monopolies, otherwise it tends towards some sort of competitive markets.

    And: pendant general is correct + way too few examples have been identified for it to be evidence of any trend

  17. @ the Pedant-General
    MY original contention was that I could only remember one instance a “natural monopoly”. Do you want to change your name?

  18. @ Tim Newman
    “But I’ve never once had a YKK zip fail on me” – you’re lucky!
    IMI sold them under the name Lightning Fasteners, later LF-Opti after merging with Opti (allegedly West German, so maybe I was wrong to think that they were Austrian).

  19. Bloke in North Dorset

    A free society has a tendency to lean towards market based capitalism.

    Tinkering with that free society, no matter how justified the tinkering, leads towards authoritarianism and/or monopolies.

  20. @ The Pedant-General

    I was of the understanding the the classical example of a monopoly that wasn’t state supported was Standard Oil. Since the government broke up The Trust in 1911 we have no way of knowing whether market forces could have changed the situation.

    Another monopoly I can think of that was actually broken apart in my lifetime would be AT&T(not the current company that bought the name but the one that used to control virtually every telephone call in the US and Canada). What is notable about AT&T is that it’s monopoly existed for over 70 years starting from the Kingsbury Commitment until government regulators broke up Ma Bell in 1984.

    Frito-Lay is a near monopoly(80%+ market share) on chips. The government hasn’t bothered breaking this one as the largest reason for the monopoly isn’t destructive business practices but good marketing.

    Another recent near monopoly that may be closer to your day to day experiences is that of Microsoft. I’m sure most readers hear are aware of tactics that Gates used while building Windoze into the most used operating system in the world. As Microsoft has faced intense regulatory scrutiny many of the more unsavory tactics(such as the buy out of Homer’s Compu-Global-Hyper-Mega-Net) seem to have disappeared leading to opportunities for other companies to enter the market.

    Not all monopolies are as obvious either. In the US doctors have the professional group AMA. This group sets the standards by which someone can become a doctor. While this is a necessary evil it has the power to be abused as happened in the late 80s when the number of medical school slots were greatly reduced. The result was that there were fewer doctors leading to a much higher price that those individuals could charge. While the AMA is not a corporation it is still a monopoly similar to the AMCA that Henry Ford fought in order to be able to sell his automobiles.

    In our current society that has forgotten that value is actually added when things are produced instead of shifting numbers in a computer it can be easy to overlook the fact that monopolies are the true nature of Capitalism without regulation. The key to whether the monopoly is able to form is the capital cost required for a competitor to start and the resources of the incumbent market leader. Truly free markets(with no regulations) lead to situation in which a train ticket from Omaha to Lincoln(53 miles*) cost up to 25 times as much as a train ticket from New York to Chicago(713 miles) with the only difference being a monopoly in the Omaha to Lincoln market.

    Hopefully these examples give you a path of learning that allows you to see that monopolies are possible, heading toward probable as the capital costs expand, in unregulated free markets. If these aren’t enough I can probably come up with at least a dozen more without extensive research.

    *I could convert that to km but if us yanks can’t be bother to do it for a Martian probe why do you think I would bother for a comment on a blog post.

  21. Bloke in Costa Rica

    Polar is basically like Miller Lite. The best mass-market beers in Central and northern South America are probably Victoria from Nicaragua and Club Colombia Dorada.

  22. Exchange betting, at least operators in the UK, have developed a natural monopoly. When Betfair started there was Flutter, and shortly after SportingOptions. There have been others but as liquidity seems to be a bigger factor in drawing customers than competitive commission, Betfair grew and the others submerged or folded.
    The London Stock Exchange is similar, being the only significant one left in the UK.

    Cheers Liberal Yank, always nice to read some US history. ( I was going to say modern US history, but that’s the only type there is, smiles )

  23. @john77

    It is true both companies were formed after the discovery of Spindletop in 1901 but before Standard Oil’s final breakup in 1911. Due to existing pressures from state governments Standard Oil stopped the most blatant price fixing by 1900. The emergence of Gulf and Texaco were aided in large part by the fact that the government was already trying to break Standard Oil. The fact that a previously unknown type of oil field was discovered may have allowed competition to develop but as history unfolded we will never know for sure.

  24. @Andrew Carey

    Sports betting is another good example. Where I live almost all betting was illegal for the longest time leading to a large number of bookies,black market odds markers as I’m sure you have a different word. While pure sports betting is still illegal here the rise of the internet made it impossible to regular. What we now have is, instead of hundreds of small individuals in each city earning their living by taking bets, a small number of large corporations.

    As to US history sadly most of what we have is modern but only because anything that existed before colonization was wiped out. We know for a fact that the Mayan, Aztec, Inca a Olmec civilizations all had written languages that have all but been destroyed. I have a feeling that some of the North American societies had writing that is lost as well. The mound builders of the Midwest must have had a relatively advanced civilization to construct the earthworks we know of. Considering that the pre-history of the Americas keeps getting pushed back maybe one day in my lifetime we will know for sure there is a longer history than we know of today.

  25. MaBell is now considered to have developed without government intervention?!?!

    And government is not intervening in the betting markets?!?!

  26. Initially there were a large number of small telephone companies that serviced small markets. Bell pushed the longer(less profitable lines) across the country, well the major cities, without massive government help. The short version of Kingsbury Commitment is that Bell would allow other companies to access it’s long run lines.

    Government has always been interfering with the betting markets. In my local area up until recently the only legal forms were on track horse races and the state lotto. This led to a large black, illegal but free, market for sports betting. Once the internet came to the masses most people who would have gone to the local bookie started betting on sites that are out of state. In this case the government regulation allowed a market with a large number of different operators. When government regulations failed to control the internet bookies everything got concentrated into a few larger entities. Over the last couple years this market has moved into the legal and unregulated fantasy sports market which currently has only 2 major competitors that have been proven to collude in the past. Basically there is 1 major source for sports betting that uses 2 different name or in other words a monopoly.

  27. NETWORK EFFECTS.

    That is all.

    (Oh, okay, “ebay”. But the principle is similar to Betfair. You go where everyone else goes.)

  28. @ Liberal Yank
    The free market in Sports Betting was destroyed by the US and/or state government officials who arrested and imprisoned individuals who were running a legitimate business in their home countries because US citizens were breaking US regulations in accessing these sites.
    The monopoly you tout as a fee market effect has been created by US governments.

  29. @john77

    I personally don’t know of anyone that ran the smaller gambling sites that were arrested by the US in other countries although I would believe it if you are able to provide some documentation.

    In the local area the existence of a thriving group of small bookies was only possible because the gambling laws meant no one bookie could grow too large. The internet removed the possibility of local regulations stopping the nominally illegal business from consolidating which it has done fairly quickly. At this point most of the people I know that used to go to the local bookie now spend their money on either Fanduel or DraftKings which as as good as the same company.

    Although sports betting was not initially a market that I had thought of it actually shows a clear trend towards a monopoly as regulations(in this case though the possibility of betting through an organisation in another country through the internet) are removed. In all cases an unregulated free market will led to the biggest Trump(I understand that is what a fart is called on the right side of the pond) doing everything possible to drive everyone else out of the market.

    I am not trying to argue that competition is a bad thing. Just that the natural order of an unregulated free market will lead to a limited number of possible contenders forcing everyone smaller out. As the smaller companies get forced out the large players will turn on each other to gain additional market share. Just like the Highlander there can be only one.

  30. Ticketmaster seem to be working towards becoming a monopoly, they have the abuse part sorted anyway and there don’t seem to be many large and even medium venues left that don’t use them.

  31. Here’s a little on the ticketmaster livenation merger in 2009.

    [url]https://www.americanprogressaction.org/issues/regulation/report/2009/02/24/5531/the-ticketmaster-live-nation-merger-what-does-it-mean-for-consumers-and-the-future-of-the-concert-business/[*/url]

  32. I think if we are talking about rock concert tickets and internet sports betting, it’s safe to say that the original contention – that capitalism naturally moves to monoply – has been disproven.

  33. @Liberal Yank

    If you want to see the beginning of monopolies, in practice – look no further than the regulation of the sports betting industry.

    And note William Hill’s response to the extra costs by this year’s regulation of offshore businesses http://www.londonstockexchange.com/exchange/news/alliance-news/detail/1438939737674974600.html

    “William Hill results highlight the speargun pressure created by the additional cost resulting from the Point of Consumption tax. Going forward we would expect smaller players to suffer disproportionately enabling bigger players with the right products to increase their market share, thus mitigating the impact of the additional tax cost somewhat,”

    It’s no coincidence that the UK gambling market was the most competitive in the world – and that UK companies are the biggest outside of Asia (and some such as bet365 are massive in Asia) – the UK had practically no regulation, which allowed the free market to do its thing.

    Of course the opponents of crony-capitalism, will call for more regulation, without recognising that it’s very often the regulation itself which creates crony-capitalism.

  34. I’m glad that I came back to see the follow ups today. First I’d like to restate that the point under discussion is that a total free market can lead to a monopoly.

    First @Mr Ecks if you hadn’t included some links you would have appeared more childish. At least you try to justify sinking to name calling with some counter points.

    I’ll take a moment to touch on the three examples sited in your first link.

    In the airline industry there are indeed only 2 major players left. The assertion that safety issues haven’t appeared due to reduced competition is absurd as there are stringent safety regulations in place. I don’t know nearly as much about Airbus but Boeing is hugely dependent on military pork for it’s current existence. If Airbus and Boeing competed in a free market with no safety regulations and received no government contracts then it would be a good example to prove your point. Sadly no sane person can claim that the aircraft producers exist in any semblance of an unregulated market.

    The second example that is touched on briefly is the electricity industry. In Pittsburgh, PA, USA, where I’ve lived for the last 21 years we had reached the point of having 2 major remaining players in the area which had virtually exclusive service areas. Locally deregulation has done noting to change the fact that there is only 1 company that I can actually purchase electricity from. Generation is a more open market, still regulated, which after a few years has condensed into only a couple choices still in business. We currently have the “green” option which is by far more expensive than the old system and the coal plant operators which are able to charge more in the “free energy market” as they collude to keep their prices high. Locally deregulation actually led to higher prices although if you are able to point out examples where this is not the case I’d be happy to look at them in more detail. In this case my limited information leads me to believe that this actually disproves the original argument.

    The final example that is used in your first link is the automobile industry. The assertion is that in the early days there was robust competition between countless, as far as I know there is no complete list of companies that went out of business before 1911, small manufactures. In fact the industry in the US was controlled by ALAM. Prior to Ford’s final court victory in 1911 any company wishing to produce or sell an automobile in the US had to meet specific industry requirements including price targets the group set. In this case it was once again an “activist” judge, aka the government, that was needed to break up ALAM’s monopoly.

    You second link about the government created utility monopolies raises valid points but in no way can be construed to argue that a free market does not lead to monopolies. There are other discussions that could be had about utility monopolies but this is a distraction from the core discussion.

    Your third link seems in no obvious way to add anything to the original discussion. If you can explain to me what this has to do with a railroad in the great plains undercutting the prices of any river boats on the Missouri river and then raising prices while there is no competition I would love to see the link.

    I would like to thank you for taking the time to attempt to argue that free markets can lead to monopolies. While none of your links provide a counter to the argument, in fact the first agrees with my position with regards to the automotive industry, they were all worthy of the time I spent reading.

  35. @JerryC

    I won’t spend more time on sports betting as I do not know enough about the industry and not being one to bet on sports have no real desire to learn more.

    As to tickets I will work under the assumption that you know as much about the US system as I do about the Premiere League.

    In the US Ticketmaster now has the rights to sell tickets at every major venue that I am aware of. This control is based in exclusive deals that allow the venue to only sell tickets through Ticketmaster. If Ticketmaster discovers tickets being sold through another provider the contract is cancelled and, at least with the 2 venues I provide technical for, pay a large penalty. Note that gate receipts can be separate and scalpers, private individuals who purchase for resale, are not targeted at this time. Additionally Ticketmaster does it’s best to flood search engine results so that any show

    What this means to me as a concert goer is that if I want to purchase a ticket without traveling to the venue I have no choice but to purchase through Ticketmaster. What this means to the venue is that in order sell tickets online they must use Ticketmaster or accept that there will be fewer people at the show.

    I am not attempting to say that it isn’t possible for a competitor to enter this market. The point is that, especially after the acquisition of LiveNation, the costs of setting up a rival network with similar level of services is very high. Additionally if that network were to start Ticketmaster could easily drop or remove many of the fees, such as $2.50 just to print out the copy of the ticket you already purchased, and still easily make a profit. Until a disruptive new technology comes along Ticketmaster has a monopoly which thanks to it’s capital base can be made with proper investments.

  36. @Lib Yank – The issue is that “rock concerts at major venues” is such a thin slice of the overall leisure and entertainment sector that it’s not meaningfully a monoply at all. Ticketmaster can’t just charge widows and orphans a billion dollars a ticket to see AC/DC because they’ll just go do something else instead, like have dinner and a movie or go to a comedy club or see a less famous rock band at a smaller venue, or whatever.

  37. @JerryC

    One local band that I saw recently was in a small(~400 capacity) venue with a Ticketmaster deal. The options were to pay $9 at the gate or to order online. Once the fees were added ordering online was almost $25. Since the venue is only a couple miles away I took the time to drive down and pick up tickets during their business hours but someone traveling an hour for the show wouldn’t do the same.

    As to going to do something else I think that you are misunderstanding the concept of the marketplace. While I agree that a rock concert is just one of many forms of entertainment it is a valid idea that doesn’t affect the definition of the market that Ticketmaster is working in. Ticketmaster has chosen to focus on a niche market which is online concert ticket sales. The fact that, I as a consumer could have gone to see a movie instead doesn’t change the fact that there is a defined market for concerts and they are the only provider for online tickets.

    To try to make an analogy that might make more sense across the pond I will make an example out of Manchester United. Now there are different ways to watch the game but Sports Bar X decides they want to set up a monopoly, just on which bar you can watch the game at. Because of whatever reason(we’ll say the bar owner has pictures used for blackmail) Sports Bar X gets an exclusive contract to show all United games in bars. Although I can still go to the game or watch at home the product I really want is a bar near my home that I can go to with a large group of friends. Although there are plenty of bars of all different type only Sports Bar X has the product that I want. This means that for what I wish to purchase I have no choice but to go though Sports Bar X and pay whatever price they want for a pint. If as a consumer I decide Sports Bar X is a ripoff I can try set up competition but, not having my own pictures, I do not have a chance at getting the rights to show the games. In the end a monopoly has formed that can only be broken once the situation that allowed it to form is changed.

    Hopefully the concept of a monopoly in a market is slightly clearer now. The key isn’t to control every possible market but to control a specific section of a market allowing higher than normal profits to be taken.

    If you would like some small town examples then I’d be happy to describe the town my parents summer house is in. There are several that I can easily explain because the market size is small enough to make to monopoly’s development clear.

  38. Bitcoin seems to be a natural monopoly in the world of virtual currencies. It depends on your terms though – competition does exist so really they could be described as dominant rather than monopolistic.
    Only one country afaik refines neodymium, but it’s not a monopolistic piss-take as business in other countries could and would enter the market if the price went too high.

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