Country Gal,"corporate mergers and buy-outs require ACCC approval" - you've actually hit onto some laws and policy that I don't agree with. I don't think it's right that a government organisation can rule whether a merger is 'fair' or not, the fundamental reason why the market remains true in any case, is the consumers choice. Nobody forces consumers to purchase the good.

Which is why it would (for examples sake) be OK if one person owned the entire strip of businesses in one given town, because he/she can't force other people to shop there. We would continually find improvements in the way resources are apportioned if this is allowed to go on, but the government (mistakenly) thinks that a strategy of some kind of semi-competition will work just as well.

Country Gal, you still haven't given an arbitrary measure of 'fair value' and I say this because consumers could theoretically argue that any price above zero is an unfair price. There is no such thing as a fair price.

The 'dominant player(s)' you speak of have gotten there by being efficient. It means we all get our groceries the cheapest and freshest this way, or otherwise, somebody else would start up a supermarket chain and compete.

Ah, volition, that shopping in a town scenario depends on the circumstances of the individuals, and how remote the town is. There are indeed many examples of people HAVING to buy from one supplier (or HAVING to supply to one buyer). I notice that you have abstained from arguing any corporate or consumer responsibility to the environment for any the products that you consume come into being.

I have a feeling that you and I will have to agree to disagree. This is because you seem to be unable to realise that capitalism has flaws, the same way as any other economic model (eg communism) has flaws.

A fair price is simply one that reflects the true cost of production as compared to the whole marketplace is prepared to pay (not just the middlemen who ripoff both sides). If you have a reasonable lifestyle (eg you can afford a roof over your head, and to put nourishing food on the table, and medical care), then you should accept that anyone else is entitled to the same basic needs, whether they live here or in India. You should be prepared to pay a price for your consumables, that reflects this. Embedded in this is the need to pay for production is environmentally sensitive. So far I have refrained from the cry of our farmers being the most efficient in the world, because I dont think that you would understand how or why. I have tried instead to limit the argument to economis models. But enough is enough. If you cant pay enough to remunerate an industry that cares for its employees and the environment that sustains it, then you dont deserve to be able to buy that product. Ripping off third world countries at the price of their people and their land to suit your pocket is not the answer.

Country Gal ,"corporate mergers and buy-outs require ACCC approval" - you've actually hit onto some laws and policy that I don't agree with. I don't think it's right that a government organisation can rule whether a merger is 'fair' or not, the fundamental reason why the market remains true in any case, is the consumers choice. Nobody forces consumers to purchase the good.

The role of government, as the elected representative of the population, is to ensure the corrupting influences of market dominance, monopolies and oligopolies are balanced against the needs of the consumer. If one retailed existed for all goods he could, reasonably dictate the margins at which he chose to sell and the prices he chose to buy at.

No one institution is in a position to act as “arbiter of fairness” other than government.

IT is also why government should not operate business, as has been stated frequently by the current federal government in regard to Telstra, simultaneously operating and regulating presents a conflict of interest which is inappropriate to the health of both government and business.

The role of ACCC is a good one and one which should be encouraged. A more easily identified parallel is the activities of the US Federal Trade Commission (ACCC Equivalent in USA) who are actively trying to break Microsoft operating system away from Microsoft applications for similar reasons of an unhealthy market dominance.

OR closer to home, the cement and concrete pricing cartel which operated to fix prices among suppliers of concrete and cement to building projects on the East Coast of Australia in recent years. A clear abuse of market position and one which found the participants convicted following an ACCC investigation.

Your last response to volition “This is because you seem to be unable to realise that capitalism has flaws”

Accepting that capitalism has flaws is the first step. It does not mean we should not try to alleviate the problems which stem from those flaws. ACCC is an example of attempts to do just that and one which can work very well.

Country Gal, capitalism is at least the most consistent system that offers individual freedoms while at the same time promoting economic growth in the best way possible (by setting prices correctly, as opposed to a socialist/communist system which could never set prices correctly). We are never truly economically free in areas where the government steps in, and this freedom is essential for promoting growth.

The problem with a 'reasonable lifestyle' is the subjectivity inherent in this type of thinking. Does a reasonable lifestyle include 'no frills 2L milk' or 'farmers choice 2L milk', or does it mean maybe italian furniture instead of brazilean furniture? Does it mean living near the beach or living inland? Surely you see the problem being raised here?

Col Rouge, ACCC and it's US equivalent serve to 'cut down firms who have gotten too much better than other ones', what kind of crime is this? Regardless of this, it's fallacy to think that free markets necessarily lead to one person owning everything, and these firms should have the freedom to merge and takeover as they wish. (I will add here that I think ACCC should exist for the purpose of stopping false advertising, but not for stopping mergers)

It's interesting you raise the Microsoft example, because that is a good one. MS are NOT a coercive monopoly, they do not force consumers to buy windows, I don't see why MS were ruled against in the IE case, because it's like saying they have to sell a certain product. Markets work in so far as sellers are able to sell what they want, not what the government dictates. There needs to be a willing buyer and seller. "The property rights to Windows and Explorer belongs solely to Microsoft and not to potential buyers, and certainly not to the U.S. Department of Justice." - quoted from http://capitalism.org/faq/antitrust.htm

These companies are being punished for their own 'dominance' (read: efficiency, management and marketing skill), and it's wrong.

"fallacy to think that free markets necessarily lead to one person owning everything"

It is. It's also a fallacy to think that monopolies won't form, given the opportunity.
The same goes for cartels.
You're right in the capitalism is the best market system we have. You're wrong in trying to gloss over its flaws.

Volition, read my post - I defined what a reasonable lifestyle is. The basics. It would be lovely if everyone could afford little luxuries as well, but that's a pipedream. I restate my point that Australian farmers are the most economically efficient in the world, and are among the most environmentally friendly (remember that clean green image that we have, that encourages other countries to buy our exports - that actually comes from somewhere). By default, if we expect out farmers (and businesspeople) to uphold certain standards, then we should expect the same standards to be upheld by any other supplier.