Category Archives: Monopolies

A Victory For Economic Liberty In Minnesota

The guys at the Institute for Justice are among the unsung heroes in the fight for liberty.

Here are a bunch of lawyers dedicated to little more than fighting laws and regulations that restrict the ability of people to run their business, or even to go into business. They’ve been on the winning side and the losing side of more than a few legal battles where liberty was at stake, including representing the homeowners in the infamous Kelo v. City of New London case.

This time, they helped break up a taxicab cartel in Minneapolis, Minnesota:

Minneapolis, Minn,—Can an entrenched cartel of Minneapolis taxi drivers violate the civil rights of entrepreneurs and consumers?

No, according to U.S. Magistrate Judge Franklin L. Noel. In an opinion released today, the judge recommended that a lawsuit brought by members of the taxi cartel to overturn the city’s free-market reforms be dismissed.

“This is a victory for both aspiring taxi entrepreneurs and for Minneapolis consumers,” said Scott Bullock, a senior attorney at the Institute for Justice who argued the case. “Established businesses should not be able to use the law to quash competition and close the marketplace. Today’s ruling ensures that does not happen.”


The Institute for Justice Minnesota Chapter (IJ-MN) intervened in the case on the side of the city of Minneapolis to defend its free-market reforms that removed a cap on the number of taxis allowed to operate within city limits. The reforms, finalized on March 30, 2007, will open the market to entrepreneurs who are fit, willing and able to serve the public, increase the number of cabs by 180 in the coming years, and eliminate completely the cap on the number of cabs in Minneapolis by 2010.

In response to the free-market and consumer-friendly reforms, the established taxicab cartel sued the city, demanding the reversal of reforms and proclaiming its owners should be able to keep the spoils of the old law that excluded new competitors from the taxi market in Minneapolis for more than 10 years.

The Institute represents taxi entrepreneur Luis Paucar, who had tried for nearly four years to provide service in Minneapolis. He has received 22 licenses under the new law.

“I am thrilled!” said Paucar. “All I ever asked for was the ability to enter the market and to compete.”
“The cartel violated the civil rights of entrepreneurs like Luis,” said Nick Dranias, an IJ-MN staff attorney. “We got involved in this case to defend the city’s free-market reforms because taxicab entrepreneurs have the right to earn an honest living in the occupation of their choice free from the anti-competitive barriers to entry that the taxi cartel wants to preserve.”

In his opinion, Judge Noel determined: “The [established] taxi vehicle license holders do not have a constitutionally protected freedom from competition.”

Good work guys.

Free Speech in the Free Market

Tim Rutten, writing for the LA Times made several interesting observations regarding talk radio,, and the way congress has responded to commentary coming from each.

[T]he House and Senate censured the liberal activist group for taking out a newspaper advertisement that characterized Gen. David H. Petraeus, the U.S. military commander in Iraq, as “General Betray Us.” Now congressional Democrats are seeking a similar expression of disapproval for radio talk-show host Rush Limbaugh, who they allege insulted servicemen and women opposed to the Iraq war by calling them “phony soldiers.” (Limbaugh has a baroque explanation of what he actually meant by those words, but you probably have to be a regular listener to his show to follow it.)

There’s a temptation to dismiss all this as hollow foolishness — like most of the things Congress does with ease. Beyond all this preposterous posturing, though, there are a couple of things worth considering because both really do involve free speech and your right to hear it.

Now, the ad was patently offensive, a particularly unconscionable slur on any honorable American in uniform, let alone a guy who commanded the 101st Airborne. It was, however, rejected out of hand as an expression of loony narrow-mindedness by most Americans who oppose the war. Nobody, in other words, needed a congressional coalition — not even a bipartisan one — to instruct them on how to think. Similarly, it’s possible that the Democratic leadership is sufficiently clueless not to have noticed until now that Limbaugh regularly goes on the air and says cruel and offensive things about people of all sorts. Most Americans with a pulse, however, are abundantly clear on the fact that Rush talks a pretty mean game.

To this point, I agree with Mr. Rutten. It should be beneath congress to spend time passing useless resolutions condemning private citizens or groups for expressing opinions that some congressmen disagree with. Outrageous and crazy things are printed, spoken, and blogged on a daily basis. Should congress pass resolutions for each and every one of these statements? Of course not. They work for us and they have a job to do.

But unfortunately for those of us who value our First Amendment rights, there are certain politicians who wish to do more than pass resolutions condemning speech they disagree with by bringing back the so-called “fairness doctrine.”

ASK most Americans what the Fairness Doctrine is and they’ll correctly tell you it’s a regulation that requires broadcasters to air both sides of an issue. Tell them that it hasn’t been enforced since 1987, when the Federal Communications Commission essentially deregulated broadcasting and abolished the doctrine, and they’ll look at you like you’re nuts. That is, however, the situation, and much that is of current consequence flows from it — including the existence of contemporary talk radio of which Limbaugh is the avatar.

In America today, talk radio is a wholly owned subsidiary of the Republican Party’s conservative wing. GOP partisans will argue that’s because deregulation subjected radio to the discipline of the marketplace, and, when that market expressed itself through ratings, it stated an overwhelming preference for conservative talk-show hosts. That’s a good, Reagan Era argument, but Democrats and their allies see different forces at work. They point to the fact that deregulation freed big corporations to acquire hundreds of radio stations at about the same time that satellite transmission made syndicated radio programming decisively cheaper than locally produced shows. It was an easy call for the corporate station managers, who quickly filled their airtime with cheap, syndicated programming. Most of the first wave of syndicated programming was talk by conservative commentators, who’d long been shut out — or felt they were shut out — of mainstream media.

Talk radio is “owned” by the G.O.P.? Ridiculous! Yes, it’s true that the vast majority of talk show hosts are conservative but so what? The reason why conservative talk has been successful is because there is a market for conservative views. The prevailing theory seems to be that conservative talk is successful because it is one of the few places where the alternative views (alternative to the left wing MSM) are expressed. This could explain why conservative talk has succeeded where progressive talk has failed. The fact that a few large media corporations own most of the radio stations is irrelevant (clearly, Rutten also believes that antitrust laws are legitimate). If there was a stronger market for progressive views, these large media corporations would not hesitate to drop the conservatives in favor of progressives. The radio industry’s master is the bottom line, not the G.O.P. or anyone else for that matter.

If the FCC were to reimpose the Fairness Doctrine, talk radio would no longer be a part of the GOP base. That’s why Democratic senators like California’s Dianne Feinstein and Illinois’ Richard J. Durbin have been talking about prodding the agency into doing that since last spring. It’s also why, late Monday, 200 Republican representatives notified the House Rules Committee that they intended to seek a “petition of discharge” for the “Broadcaster Freedom Act.” That bill, written by Rep. Mike Pence (R-Ind.), a former radio talk-show host, would prohibit the FCC from ever reimposing the Fairness Doctrine. Under the House rules, if Pence can get 218 signatories to the petition, the Democratic leadership must let it come to the floor for a vote.

That’s what’s really at stake in all the posturing over MoveOn .org and Rush Limbaugh. In the minds of both parties, it’s not so much a fight over speech as it is over the right kind of speech. The sad irony is that the only voice that isn’t being heard in all this talk over talk is that of the public, which, after all, owns the airwaves over which this struggle is being waged.

For the sake of argument, let’s say that Rutten is right: talk radio is “owned” by the G.O.P. base. Again, I have to say: so what? Rutten major common error in this piece is this notion that the public “owns the airwaves” (except for the illegitimate use of taxpayer money to fund both NPR and PBS). The entire argument for government imposed regulations on broadcasting rests on this notion that the airwaves are owned by everyone. If the airwaves are owned by everyone, then that also means that the airwaves are owned by no one. If the airwaves are owned by no one, then the government assumes that the government rightly fills that vacuum to own the airwaves.

But the public does not own the airwaves; the people who pay the money to transmit their programming do. The way I see ownership of the airwaves should be similar to ownership of any other kind of property: a radio station owner determines the frequency s/he wants to use and s/he registers the frequency with the county so no other station can use his or her frequency.

In the real world, it’s a little more complicated than that but the fact remains that radio station owners pay for their programming from advertisers and donations (donations are more common for religious programming) NOT public funds. If the G.O.P. base truly has spent the money to keep these shows on the air, I say more power to them. What would stop the DNC from doing the same?

If we buy into this myth of the public airwaves, we do so at our own peril. If the FCC can demand that talk shows give equal time for all issues (assuming that is even possible), what is to stop congress from setting up similar unelected bodies to impose similar regulations on newspapers, magazines, and blogs? Newspapers are delivered on public roads, magazines are delivered through the U.S. mail, and the internet is transmitted over utility lines which are often also regulated by the government!

I agree with Mr. Rutten that the voice of the public is not well represented on the radio but what are we willing to sacrifice in the name of fairness? Despite my frustration with the MSM and talk radio, we live in a time where we have so many other options to express our views and listen to unconventional views of others. We now have the internet which gives us access to videos, podcasts, and blogs. The government should be the last place for us to deem the ultimate arbiter of fairness.

When corporations fight proxy wars using governments

It is always depressing to see a political battle erupt where you know, no matter who wins, the average citizen will be screwed. One such slow motion train wreck is taking place in Massachusetts as we speak. I became aware of it when one of the groups put an ad on TV that was so offensively anti-consumer that I knew some bait and switch had to be taking place. What I found was quite an interesting battle.

In Massachusetts, most roads are owned and operated by local governments. Among the many decisions these owners have to make are ones concerned with services run under or over these roads. One set of services are television cables. Generally, and perhaps universally, these towns select a single cable provider and give them a monopoly on television service, allow them to run lines along the roads, and grant them exclusive access to the market composed of the town’s residents.

The towns also made similar arrangements with telephone providers.

These monopolies are starting to break down due to technical advances. A thin fiber-optic line can carry the same amount of data that a thick cable would be used for 20 years ago. The technologies have converged to the point that the cable infrastructure can provide telephone service, and the telephone infrastructure can provide television service.

The two types of companies went from indifference to each other to competing with each other. Since they are used to having governments kneecap competition, they each tried to use local governments against their competitors. In the case of my home town, Comcast very effectively lobbied town authorities to prohibit Verizon from offering television, even though the infrastructure was in place. Apparently Verizon got tired of this, and decided that they would have an advantage if these legislative battles were fought in the statehouse rather than in town council meetings. And so, they drafted this law:


The law basically shifts control of the monopolies (which they call franchises) to the state-house. Once the state approves of a monopoly, the towns must make their roads available for whatever cabling is required.

They then set up what looks to me like an astroturf group called Consumers For Tech Choice, which appears to be sponsored by Verizon.

The New England Cable & Telecommunications Association, which appears to me to be dominated by Comcast, didn’t like this, and they set up a competing organization: Keep IT Local MA which tries to look non corporationy by only listing members of local governments as members. They were the ones who produced the execrable ad.

I spent an hour or so noodling around the two astroturf sites, and noticed some really amusing parallels:
1) Neither site provides a link to the legislation.
2) Neither site is actually providing a forum for the citizenry to actually communicate with each other.

In other words both groups have utter contempt for us citizens. They want to treat us like mushrooms. They also seem to have studied the same textbook.

While I am sympathetic to Verizon because of the disgusting way in which local towns governments have screwed the citizenry by trying to keep them out, in the end, I think the NECTA has the stronger case. If one accepts that towns must “own” the roads then the towns should control who or what travels on them. But given the way that town councils mismanage the road system and abuse their monopolies, I don’t for a minute think they are fighting this battle on principle. They are fighting Verizon merely because they wish to keep their little empires, either because of the graft they collect or the psychic pleasure they derive from pushing their neighbors around. It’s just a shame that there is no actual grass-roots group fighting to end government control of telecommunications in the first place.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Review: The Production of Security – Part 1

The seminal work of free-market anarchism is commonly held to be Gustave di Molinari’s The Production of Security. This document was one of the many great analyses of free-market economics to come out of France during the first half of the 19th century, and questioned the truth of the fundamental belief that

… to secure [their rights], Governments are instituted among Men, deriving their just Powers from the consent of the governed (1)

The essay is broken into the following segments:

I – The Natural Order of Society
II – Competition in Security
III – Security an Exception?
IV – The Alternatives
V – Monopoly and Communism
VI – The Monopolization and Collectivization of the Security Industry
VII – Government and Society
VIII – The Divine Right of Kings and Majorities
IX – The Regime of Terror
X The Free Market for Security

This is a fairly long essay, written in a different era, in a different language. Thus even the best translations can require a great deal of effort to read. However, I think it is a useful essay to walk through. Since it is so long and so radical, I thought I would break the document into little chunks and provide commentaries on one chunk at a time. This post will be a commentary on the first two sections, “The Natural Order of Society” and “Competition in Security” » Read more

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Is Google Getting Too Big ?

In the Washington Post, Steven Pearlstein writes about Google’s continued expansion:

Google is the quintessential business success story. Two bright young guys started with an idea, built a company around it and grew it into a $150 billion juggernaut that now dominates the Internet. It nudged aside rival Yahoo, challenged traditional media giants and frustrated the Web strategy of the once-invincible Microsoft. And it did it all fair and square.

First-quarter reports show how much Google has pulled ahead of the pack: a 69 percent increase in profit on a 63 percent increase in sales. The news came just days after Yahoo acknowledged that its profit had fallen 11 percent, sending its already-lagging stock down 12 percent. Reports from big newspaper chains were even more dismal.

Good news for Google, shareholders, and those of us who make daily use of the content that it provides, right ? Not according to Pearlstein:

But now, precisely because of its success, it is fair to ask if Google should be barred from furthering its dominance through acquisitions or collaborations. At issue are the recent purchases of YouTube, the leader in online video sharing, and DoubleClick, the leading broker of online advertising; in both instances Google used its gusher of profits to outbid rivals. There are also new joint ventures with Clear Channel, the giant radio broadcaster, and EchoStar, the satellite television operator.

There is no assertion by Pearlstein that Google has obtained any thing approaching monopoly power, and there is no evidence to support it. So why is it that Pearstein is advocating the idea of putting controls on how big Google can grow ? What is it precisely that Google has done wrong that warrants limiting its growth ? And, more importantly, just how does Pearstein aim to fathom the point at which Google, or any company, becomes “too big” ?

As I have noted before, the only type of monopoly that is harmful to consumers is a legal monopoly, one that is created by the state and whose position is protected by the state. The best example of this today is the United States Postal Service. If if you wanted to use another provider to deliver regular first-class mail, you cannot do it because the law forbids it. Google, on the other hand, is simply providing a product. You do not have to use it if you do not want to, and many people choose not to. However, due to the popularity of Google, it’s no surprise that many businesses use Google as a way to attract new customers. Some companies will even use a website like to change their office address in the hope it will attract more customers. Of course, apart from the location, the business website is also an important aspect. And Google has its own algorithm for deciding how to rank a particular website on its search. In order to rank high or get visibility on the first page, many businesses nowadays hire SEO agencies like DigiVisi to keep their website optimized.

As indicated, Google holds significant influence is the emerging field of search engine optimization. By increasing the visibility of a website or webpage, be it through a management service for gmb listings or through SEO boosting, companies are more likely to experience an increase in the quantity and quality of online traffic. Are you looking for ways to help your business rise through the Google search ranks? Reaching out to an SEO Newcastle specialist could help your company to improve its online presence.

Above all, the day that Google becomes a problem is not the day it becomes “too big” it is the day that it uses the power of the state to restrain competition.

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