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but i do think small businesses should be able to have as much access to the american people as big business
They do, there are no laws that bar small businesses from "access to the American people" that big businesses get to ignore. Big businesses are bigger and probably have more funds to use than smaller ones, but that doesn't mean you need to "level the playing field" in favor of small businesses (remember, big business became big for a reason, usually it is because they are good/efficient at what they do).
As for your earlier link to the NY Times, Mats, I fail to see how it relates to capitalism and monopoly/big business. It does discuss other aspects of the economy in a sensationalist manner, however. Again, hardly proof that the US is doing "bad" under a capitalist economy considering there have been and probably always will be business cycles.
As for earlier comments,
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To support the argument that a monopoly stifles it's competitors ability to majke a profit, Intel could afford to reduce the costs of it's CPUs far more than AMD, who being a smaller company have higher manufacturing costs (they have to rent a lot of their fabrication plants from other chip makers, instead of having their own).
A CPU from AMD of the same performance as Intel's offering would therefore cost more to produce, AMD had to charge less than Intel to be able to sell it's CPUs, so made less profit on each one sold.
This logic is pretty flawed; basic economics would tell you why this would not happen. People call this act "predatory pricing" with the goal of lowering one's own prices below marginal cost in order to drive out competition and then raise prices. Unfortunately, this act has never actually worked in practice. Firstly, this firm must have some huge war chest somewhere that would be used to sustain the firm while it operates below cost (not even intel has that). There are many risks with the firm seeking to engage in predatory pricing; one being the firm must be certain he can raise his prices enough to recover his losses once the competition is driven out of the market (which could prove difficult if has to compete with the grocery store for your money). Also, even if the competiting firm goes bankrupt, their physical plant does not disappear nor the people that worked there (and have some skill in that area). Once the victorious firm raises its prices, another firm (or the old one) could simply re enter the market using the competition's employees and plants. In other words, the predatory firm would have to ensure some sort of large barriers to entry (i.e. the government) to keep others out. There are various other ways predatory pricing won't work, but I'm trying to avoid this from getting too long. Corporations exist to create profit for shareholders, and it seems unlikely they'd go for such a plan. Also, no attempt at predatory pricing has
ever let to a monopoly in the free market empirically. As for intel vs. AMD, it is true right now intel seems to be offering a better product; however, we still see price drops for intel chips, and AMD is still able to compete on other levels (most people do not buy the "enthusiast" level chip since most don't even know how to upgrade their CPU). Same goes for ATI vs. Nvidia (although, you missed the 3rd competitor in the GPU market, intel again with their onboard GPUs).
14 Apr 2008, 11:50 am
