From: John Conover <john@email.johncon.com>
Subject: Re: Telecommunications & Infrastructure (was Re: The nature of capital (was: capitalist economics is NOT optimally efficient)
Date: 14 May 1999 09:47:09 -0000
Lev Lafayette writes:
>
> I would have thought that "cut-throat" competition may lead to modest
> improvements in price ("modest" here being used in full knowledge that
> the economies of scale would result in not-so-modest for the big users), along
> with a more draconian workplace.
>
Hi Lev. But it might be that it is the nature of capitalism-its asset,
and its Achilles heel. There is some game-theoretic evidence that the
evolution of any industry is to end up as an oligopoly or monopoly,
with the remaining player(s) making no money and incapable of
financing infrastructural issues, like abatement of Draconian
workplaces, etc.
On the other hand, mandating pricing to finance infrastructural issues
through centralized control, (like the public utilities commissions as
practiced in the US,) runs afoul of another game-theoretic issue-the
so called Impossibility Theorem, (a la Condorcet/Kenneth Arrow,)
which, in a nut shell, states that no rational arguments can be
presented to address the ranking of priorities in the social welfare
function, like the abatement of Draconian workplaces.
Perhaps there isn't any answer to the question of what the perfect
social/economic system is.
John
BTW, the enigma is not new. See the Epic of Gilgamesh, Sumeria, circa
2100 BC, which described it as a devils bargain. (But it has kept a
lot of economists gainfully employed over the ages, though.)
--
John Conover, john@email.johncon.com, http://www.johncon.com/