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Predatory Pricing (2)



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[Topics under debate]: GOOD GOVERNANCE
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Dear Mr. Datt,

Going by an earlier post of yours, you seem to believe that the market
is about giving free play to private capital or something like that. I

feel that is oxymoronic. The free market is not only a natural
self-regulating complex adaptive mechanism that restricts private
capital, but also channelises it. Generally speaking, therefore, I am
for decentralised free-market solutions to problems  even those caused
within the market. Giving more freedom to market forces is not the same
as giving free play to a particular market force  such as private
capital. Capitalism is something of a misnomer for this reason.

So I believe government regulation (because it is centralised) shouldnt

happen by default. The market should first be tried out as a systemic
solution wherever possible. Wherever the government is to be asked to
intervene, the burden of proof should be on those asking for it and they

should have to show that market forces wouldnt succeed in solving the
problem.

So, when you wrote that predatory pricing was a crime that needed to
be punished, I aired my doubts. Obviously, since I am not writing a
thesis on the subject, they were doubts raised by someone else. But the
fact remained that I hadnt been able to answer them. So I presented the

doubts to you in the hope that, since you seemed clear on the subject,
you would clear my doubts. Of course, as I have already said, if you
hadnt been able to answer them, I would have looked elsewhere.

Unfortunately, I didnt have time to present these doubts within the
posts themselves. So they remained in the articles where I found them.
But I also asked you some questions directly. You havent yet answered
them satisfactorily, nor any of the other doubts.

So I present some of the main ones here again, this time as part of my
post. You had also asked for Sowells statements and the evidence he
gives. They have also been summarised or quoted here.

I quote Sowell directly because they are his views, not mine. Your
reactions should preferably be directed at his views  and neither him
nor me.
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It is one thing to theorise that predatory pricing may be possible. But
quite another to base legal action on it, to treat it as a crime based
on a theory that has yet to be confirmed. Microsoft may have done wrong
things but we arent talking about Microsoft here, but the theory of
predatory pricing.

So Sowell wrote:

The Justice Departments antitrust case against Microsoft relies on one

of the most popularly acceptedand most empirically unverifiedeconomic
theories, the theory of "predatory pricing."

It is a commentary on the development of antin it, to treat it as a
crime based
on a theory that has yet to be confirmed. Microsoft may have done wrong
things but we arent talking about Microsoft here, but the theory of
predatory pricing.

So Sowell wrote:

The Justice Departments antitrust case against Microsoft relies on one

of the most popularly acceptedand most empirically unverifiedeconomic
theories, the theory of "predatory pricing."

It is a commentary on the development of antir_sname




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