Yeah well. Are there any free market industries in the US?
Financial sector, energy, car manufacturing, IT, education, news, health care, law, home buying, defense - those are all in one or more ways deeply subsidized or maintain such close relationship with government that it's difficult to say whether they are part of the government.
Take Google: A single company that somehow manages to sit on almost all searches, most of the online add market, a good chunk of the email market. Yet it avoids being split up in antitrust cases.
Google started as a government sponsored research project that was spun out from a government subsidized institution (Stanford). Then it raised tax subsidized financing (venture capital). It has what seems to be a free flow of information with different government institutions such as the NSA.
Google doesn't really pay tax on most of its world wide income and it has some 20,000 government granted monopolies (also known as "patents").
Is Google a private company in a free market?
Exactly what US industry should health care emulate?
In practice, people live longer and costs go down.
Too many people confuse prices (set by a market) with incentives. In the mythical future perfect "free market", competition would drive prices down and all would be "good". Alas, there are no free markets. Further, the desired outcomes is healthy people, not cheap healthcare.
Google doesn't really pay tax on most of its world wide income
In other news, Guinness also does not pay taxes to the US for beer sold in Ireland. It only pays taxes on profits made from beer sales in the US. Those green fiends!
I know it's shocking, but there is a world outside America, and the US government does not get to collect taxes on all of it.
My point wasn't that Google should pay US tax on its foreign income. On the contrary Google's foreign income should be taxed in the countries where it's earned. Right now, though, it's by-and-large taxed nowhere: http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho...
Now, I doubt that it's the government of Bermuda or the mighty army of Ireland or the important trade with Isle of Man that scares off the US government from closing those loopholes to American tech companies. Obviously, the US government uses its influence in such way that international tax law allows American tech companies to transfer their international income to tax havens. After all, the US government could quickly use its influence to close those gaps if it felt any real need for it. Ergo - another subsidy.
> In other news, Guinness also does not pay taxes to the US for beer sold in Ireland. It only pays taxes on profits made from beer sales in the US. Those green fiends!
Diageo, which owns Guinness, is a British corporation. Thus, it is hardly surprising that the US government does not tax it on sales in Ireland.
Google, on the other hand, is an American corporation.
Free market is a theoretical model. One could say how well or how close it describes a specific situation (an industry, a region or country, and so on). But saying that something "is" or "is not" a free market is just a shortcut and may be a little misleading.
To be convicted of anti-trust laws, you have to satisfy two conditions a) you have a monopoly of a large market b) you use your monopoly power to reduce competition. Many companies are 'benevolent monopolies' that never get broken up.
source: I worked at msft when it was convicted of antitrust violations.
The problem I see with analyzing The Google monopoly comparing to, for example, the Microsoft one is that they really innovat[e|ED?]. I am not in favor of Google monopoly for that but currently there are not companies in the market that can fight these kind of innovations or market position. I am not talking about beating Google in social networks, I am talking about beating them with a better search engine and advertising offerings.
Microsoft innovated as well, but Microsoft also engaged in significant anti-competitive behavior. Memories of the details have proved to be pretty short.
However, if we were really honest we'd acknowledge that aquihires, and the process of killing products when they could have been spun off and sold for a nonzero sum involve rent-seeking considerations as part of the equation. It's a good strategy to stop developing something that erodes the net value of all of your products, but how you do that gets complicated when you try to define what is and is not anti-competitive behavior.
My main point about Microsoft vs. Google innovations is that Microsoft had reproducible products (obviously not reproducible business) but Google has irreproducible products: not in theory but in practice.
Financial sector, energy, car manufacturing, IT, education, news, health care, law, home buying, defense - those are all in one or more ways deeply subsidized or maintain such close relationship with government that it's difficult to say whether they are part of the government.
Take Google: A single company that somehow manages to sit on almost all searches, most of the online add market, a good chunk of the email market. Yet it avoids being split up in antitrust cases.
Google started as a government sponsored research project that was spun out from a government subsidized institution (Stanford). Then it raised tax subsidized financing (venture capital). It has what seems to be a free flow of information with different government institutions such as the NSA.
Google doesn't really pay tax on most of its world wide income and it has some 20,000 government granted monopolies (also known as "patents").
Is Google a private company in a free market?
Exactly what US industry should health care emulate?