Excellent infornative article that with the referenced links acts also as a good 'teach yourself real world economics' source.
A couple of anorak points.
One, was the trigger of building society demise financial liberalisation and access to wholesale funding markets rather than simple change of ownership arrangements, which was largely a consequece rather than a cause?
Two, was not the failure of working class collective action to be the 'grave digger of capitalism' a compex political economy phenomena, motivated, at least in part, by a realistion that simply transferring prodctivive enterprises to the grave did not accord with worker self interest. interacting with ameliorative public abd social policy interventions?
The question this raises for me is what role fifa actually plays with respect to football. They extract a lot of value but I’m not clear why this is the case and why the significant footballing nations actually participate in it. It’s not really like a company, more like a trade association
"Suppliers of essential parts or labour can threaten to hold up production by withdrawing their efforts and so extract extra income for themselves. . . . This is why the same companies own oil drillers as well as refineries or why Tesco has a large fleet of lorries rather than rely on subcontractors.”
This seems has it (generally) back to front. The idea that Tesco has to make vertical acquisitions in order to defend itself against predatory suppliers is the opposite of what happens in the real world. Having spoken to a number of suppliers to Tesco in the past year or so, I can confirm that many of them - especially the smaller ones — are, and I don’t use this word lightly, terrified. Tesco is the predatory player with monopsony power. A farmer that suppliers half its crop to Tesco can be wiped out overnight if Tesco decides not to take it. The coercion and abuse runs downwards, not upwards.
The Chicago School led by Robert Bork used arguments like this, wrapped in fancy clever-clever theories, to eviscerate vertical antitrust enforcement. They ran lovely courses for judges and politicians to train them in these ways.
Better to start by working out who is the player with power, to see how the business world works. In some cases, suppliers can ofc be more powerful - Schlumberger in oil drilling, for example, is pretty potent, when facing a minnow wildcatter. But generally the big players buy companies for the purposes of vertical control, dominance - and very often, abuse.
Excellent infornative article that with the referenced links acts also as a good 'teach yourself real world economics' source.
A couple of anorak points.
One, was the trigger of building society demise financial liberalisation and access to wholesale funding markets rather than simple change of ownership arrangements, which was largely a consequece rather than a cause?
Two, was not the failure of working class collective action to be the 'grave digger of capitalism' a compex political economy phenomena, motivated, at least in part, by a realistion that simply transferring prodctivive enterprises to the grave did not accord with worker self interest. interacting with ameliorative public abd social policy interventions?
The question this raises for me is what role fifa actually plays with respect to football. They extract a lot of value but I’m not clear why this is the case and why the significant footballing nations actually participate in it. It’s not really like a company, more like a trade association
"Suppliers of essential parts or labour can threaten to hold up production by withdrawing their efforts and so extract extra income for themselves. . . . This is why the same companies own oil drillers as well as refineries or why Tesco has a large fleet of lorries rather than rely on subcontractors.”
This seems has it (generally) back to front. The idea that Tesco has to make vertical acquisitions in order to defend itself against predatory suppliers is the opposite of what happens in the real world. Having spoken to a number of suppliers to Tesco in the past year or so, I can confirm that many of them - especially the smaller ones — are, and I don’t use this word lightly, terrified. Tesco is the predatory player with monopsony power. A farmer that suppliers half its crop to Tesco can be wiped out overnight if Tesco decides not to take it. The coercion and abuse runs downwards, not upwards.
The Chicago School led by Robert Bork used arguments like this, wrapped in fancy clever-clever theories, to eviscerate vertical antitrust enforcement. They ran lovely courses for judges and politicians to train them in these ways.
Better to start by working out who is the player with power, to see how the business world works. In some cases, suppliers can ofc be more powerful - Schlumberger in oil drilling, for example, is pretty potent, when facing a minnow wildcatter. But generally the big players buy companies for the purposes of vertical control, dominance - and very often, abuse.
Hi Chris,
The Browser introduced your article to me, and I'm grateful it did.
This was a great read on the economics of asset ownership.
Thank you for writing about this.