A review of PBS's “Edison: The Father of Invention” (American Experience)

“I have not failed. I've just found 10,000 ways that won't work.”

– Thomas Alva Edison

The great “geek” questions: “Edison or Tesla?”

I have heard that one of the big “geek” questions is “Edison or Tesla?” I suppose that science geeks and engineering geeks are the ones most likely to ask this question, but business geeks like me (and history geeks like me) do as well, since they were both massive figures in the history of business. Edison founded a company called “Edison General Electric,” which later merged with the “Thomson-Houston Electric Company” to form “General Electric.” The latter company is still around today in its merged form. There are also a number of other companies that bear his name today, such as “Southern California Edison” – part of a larger company called “Edison International.” General Electric alone would be a major business legacy for any man, since it is one of the biggest companies in the country today. (In 2018, it was the 18th-largest firm in the United States by gross revenue.) But Edison was first and foremost a great inventor, and that is how he is best remembered today.

Why do we give patent-holders monopolies on the production of their product?

“[The Congress shall have the power] To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries … ”

– Article 1, Section 8, Paragraph 8 of the United States Constitution

Some say that it is “obscene” or “outrageous” to have life-saving technologies at our fingertips, which are expensive by reason of a patent monopoly. Patents involve monopolies which (admittedly) have some drawbacks to them, at least in the short term. Why, then, does society allow them? I will try to explain in this post.

A review of “The Men Who Built America” (History Channel)

"The Men Who Built America" is something of a rarity in the world of documentaries, because it is one of the few history programs out there that actually focuses on the private sector. Most history programs focus on either heads-of-state or wars, and there's nothing wrong with this - public-sector history is definitely worthy of study; and it is well that our schools spend so much time teaching it. Nonetheless, there is much of importance that happens in the private sector as well; and our focus on "politics and the military" should not preclude us from talking about these things on occasion, if not frequently.

In that spirit, I set out to talk about this remarkable program; which is one of the few programs that talks sympathetically about the contributions of businessmen. When liberals talk about businessmen at all, it's usually in a negative sense, to paint them as greedy "robber barons" who will stop at nothing to make a buck. Fortunately, however, this show seems far enough to the right that they don't slow down the narrative with inappropriate rants about capitalism, and instead focus on the human story of what happened - showing the considerable accomplishments of these men, while not omitting the more sordid details of how they sometimes went about getting their massive fortunes.

Are monopolies really as dangerous as Marx said they were?

"Competition engenders misery, it foments civil war, it 'changes natural zones,' mixes up nationalities, causes trouble in families, corrupts the public conscience, 'subverts the notion of equity, of justice,' of morality, and what is worse, it destroys free, honest trade, and does not even give in exchange synthetic value, fixed, honest price. It disillusions everyone, even economists. It pushes things so far as to destroy its very self."

- Karl Marx, in "The Poverty of Philosophy," Chapter 2, Part 3 (as translated into English at Marxists.org)

Most people today know Karl Marx was an opponent of free markets, and that he gave all kinds of objections to them in his writings. But lesser-known is an objection he gave to free competition: that competition inevitably destroys itself - through monopoly.

Karl Marx

Quote from Marx about competition "destroy[ing] its very self"

In the words of Marx himself:

"Competition engenders misery, it foments civil war, it 'changes natural zones,' mixes up nationalities, causes trouble in families, corrupts the public conscience, 'subverts the notion of equity, of justice,' of morality, and what is worse, it destroys free, honest trade, and does not even give in exchange synthetic value, fixed, honest price. It disillusions everyone, even economists. It pushes things so far as to destroy its very self." (Source: "The Poverty of Philosophy," Chapter 2, Part 3, as translated into English at Marxists.org)

Is it true that competition inevitably destroys itself through monopoly?

The idea that competition needs to be watched - that monopolies need to be guarded against - is held by many today, who are otherwise in favor of free markets. Competition is a good thing, many say; but it needs to be monitored. But ... is it true that competition inevitably destroys itself through monopoly?

Capitol Dome

My own history with this idea

I once believed that this was true, and that there was a needful function for anti-monopoly laws, such as the Sherman Antitrust Law of 1890. This was one of the arguments that fascinated me; because if it was true, then that meant that competition could be dangerous if unfettered, which would undermine my faith in the free market if true. Thus, I had to know whether or not this argument held water; and whether competition was something to be celebrated or feared.

Senator John Sherman, the principal author of the Sherman Antitrust Act

My change of heart in this matter

But I have since come to the conclusion that monopolies are not something to be feared - that there are many forces in place to prevent their rise; and which ensure that if they do appear, that they will not have much power. This might seem to be a strange argument, and I acknowledge that I once saw it as strange myself. But I have come to the conclusion that competition doesn't really destroy itself through monopoly - that free-market forces prevent this from happening, and that Mr. Marx exaggerates their dangers and effects.

Pleas for an open mind in the reader

I will present arguments in this blog post to support this point of view, and challenge Mr. Marx's objection to free-market competition. If this seems counter-intuitive to you, I ask only that you entertain my arguments with an open mind; and refrain from judging them until after you've heard them. So with that in mind, I will now turn to my arguments about free-market competition, and use some quotes from Dr. Thomas Sowell to support them. These will show why competition being destroyed through monopoly is not something that we should worry about.

Thomas Sowell