The End Capitalism via Economy of Scale (?)

[SWPIGWANG]

Some of the basic assumption of market economy is based on the the presence of competition which rewords increases of utility. Without it, the market is a farce.

I was looking at some economy trends, and I have some doubts about this model for many industries. The problem is economy of scale which scales upto the point of the entire industry.

There is appearently the economy of scale but not so much the economy of "anti-scale." When this is considered it would make sense for all producers of one industry to merger to lower costs while maintaining same revenue. New entry is detered because the lack of scale. New capital is directed towards the existing monopoly due to this very reason.

Now for a rapidly developing technologically fluid society as we have today, the problem is not a big one as the value and rate of new ideas overshadows economy of scale in many cases and keeps producers honest and decentralize economic power as the cost of building a new organization is often less than rebuilding an existing one. Nonetheless, horizonal intergration have proceeded anyways with open markets.

Who thinks capitalism will implode once economic expansion effectively halts?

On an more realistic note, who is worried that all this intergation would result in perverted power structures (or already have) that have bad influences to society in general outside the scope of economics. (for example excessively lobbying power or media control) If so, is there a fundamental fix to this problem or all we can work with is a number of small hacks to the system?

[Uraniun235]

Who thinks capitalism will implode once economic expansion effectively halts?

I think there will still be private commerce going on at a smaller scale (like, say, restaurant owners), but I do think there's going to be a really big problem once people realize that we cannot simply grow the economy forever.

Of course, this is going to be a hard notion to pound into people; I remember fighting with a couple of nitwits on some forum who were convinced that the economy had to expand forever no matter what (at one point they basically said that we'd better get into space before we had completely maxed out the planet) or else we were doomed to total destruction.

[Ariphaos]

Essentially the problem lies in the fact that needs are more or less constant.

That is, the raw amount of people needed to feed and shelter the population doesn't really change. Ecological damage aside for the moment, this creates an interesting situation where technology outmods various jobs and creates new ones, increasing total productivity but the end result is, the average person has to do less and less.

This sort of thing, and its consequences, is lost on pure libertarians. As you surmise, a few people concentrate more and more of the wealth, until they seem to run everything. It used to be that a single entity simply could not have the proper accounting for such scales of control (Misis' theorum), but computers greatly mitigate that.

Another thing that gets lost in the economic picture is personal projects. I make a chair for myself, I have increased my net worth (or my friend's if I give it to them), but it won't get reported. This is important for the next point.

There is a light at the end of the tunnel, however. 3D 'printers' have been made that are capable of self-replication. As this and related technologies improve, in terms of scope and materials they can use, consumers will begin producing and recycling their own goods more.

This still allows for seemingly unlimited economic growth, however the nature of it changes. Corporations would break down from their current, seemingly monolithic nature into more social groups - my friend wants a new feature on his watch? I either download an appropriate template or modify his current one myself. Think open source software for well, everything. Att that remains is security services and similar such things, which would look like a massive drop in world GDP though the planet's industry is several orders of magnitude more capable.

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My general assumption is that the above merger-system and the below system are in a bit of a race. Right now, big companies are winning the market share at the moment, but I don't think they are winning overall.

[K. A. Pital]

Think open source software for well, everything.

Ah. Thinking the same way, I suppose.

Our discussion with Lord Zentei recently was just exactly about the prospects of such an economic model in the future.

[Ariphaos]

:) Ah. Thinking the same way, I suppose.

Our discussion with Lord Zentei recently was just exactly about the prospects of such an economic model in the future.

Well, I don't agree that it will be zero-price, though the difference is a bit of a nitpick. There will be some distribution and measure of economics, if only in terms of raw energy and materials trade and transportation, and factors in place to limit people from trying to hoard a specific resource overmuch, in particular deuterium and certain rarer elements.

There are some beginnings of this in the United States here, partly due to the recession. Possibly elsewhere as well.