1/26/2012

On monopolies and getting your fair share

In early September of last year, I declared that the UFC is officially a monopoly. I was referencing the fact that they had just purchased their biggest competitor, and consequently, no serious rival company remained to challenge their dominance as the premier mixed martial arts (MMA) organization on the planet. I then listed the myriad of benefits that the UFC conferred to all parties involved (itself, the fighters, the consumer, the economy as a whole) and noted sarcastically at the end that, "all we need now is for the US anti-trust department to come in and break this consumer-hating monopoly up!" It now appears that may happen as the FTC is currently investigating the UFC for potentially being a monopoly.

The FTC investigation has sparked significant media attention on this matter and rekindled the monopoly debate. The most notable of which was an ESPN segment that featured an extensive (and heavily edited) interview with UFC owner, Lorenzo Fertitta. More recently, Gregg Doyel of CBS Sports weighed in. In response to the heavily critical ESPN piece, UFC President Dana White released the unedited interview footage. The full interview reveals many things I have touched on earlier regarding the increase in fighter pay, opportunity, economic benefits, and so forth that the UFC has created. While I will touch on those things again, my main focus will be on the oft repeated theme of a fair share.

In all the discussions on the UFC being a harmful monopoly, there is little contention that they have done much to improve the lot of their fighters. The perceived problem, instead, is that the entry level fighters do not receive their "fair share". The ESPN segment notes that the lowest paid UFC fighter receives only a base $6k to show and another $6k if he wins. (The UFC also awards three separate bonuses worth $75k each for fight of the night, submission of the night, and KO of the night.) While this is significantly higher than at any other point in history, not to mention the additional health insurance coverage and opportunities that the UFC provides, the focus is not on what has been created, but instead on what percentage of the UFC's total profit the fighter should be entitled to. What percentage is fair?

The question itself should indicate the problem here. Life is not fair. Government's role (at least as outlined by The Constitution of the United States of America) is not to make life fair. It is to protect the life, liberty, and the pursuit of happiness of all. Equally, if you will. Fairly, if you must. All are entitled to an equal and fair treatment under the law. Period. There is no asterisk denoting that the government is also a fairy god mother capable of re-shaping the harsh realities of the world into a more fair and palatable one.

As a libertarian and student of Austrian Economics, it is easy to slip into a delineation of all the economic and material benefits gained from an adherence to protecting individual liberty and a free market economy. The fact that under laissez-faire capitalism, the only way one can achieve wealth is by making those around him richer! Yet, this strikes me as an error. To do so tacitly implies the fundamental critique is valid. It is almost irresistibly compelling to direct the critic's attention towards all the wealth and prosperity the UFC has created. Surely if they are made to see just how much the UFC creates, (the very possibility to be a professional mixed martial artist) they would realize the errors of their ways. While such an argument can and should be made, I must insist on focusing on the fundamentally invalid premise that government force should be used to make life more fair.

Such a notion is much better suited for fairy tales and children's books, not the real world. The system of socialism, in which government is used to redistribute property in a supposedly equal or fair manner, is unworkable. It has been irrefutably proven so in theory, and tragically, empirically as well.

As Hoppe eloquently points out, for a law to be just it must equally and universally apply to everyone. There is nothing just or fair about denying the rights of individuals whom have been fortunate enough to achieve success in a free market system. To neglect this important tenet, is to commit serious intellectual error and embark on a fundamentally totalitarian mindset. While the would be reformer would certainly object to such a characteristic, I urge him to consider the phrase, "fair to whom?" What is it, if not tyranny, to suggest one becomes less human and less worthy of protection of his liberty, simply because he has wealth greater than some arbitrary limit?

If we are to create a truly just society, we must not allow envy to distract us from the most vital element required; the protection of private property rights. The denial of which, in any capacity, is an assault on the very nature of what it means to be human. To use the most fundamentally unfair mechanism ever designed by man - government force - in an attempt to make society more fair, is fatally flawed from its conception. Immoral and unjust means are incapable of producing a more just society. The UFC created a product and an industry that has increased the lot of millions of people across the globe. A career exists where there was none before. Every individual who chooses to undergo the career path of being a UFC fighter, does so because it is better to him than any other alternative. The tens of thousands of current or prospective UFC fighters are a tangible example of the increase in the quality of life and available opportunities that the UFC has created. Let us not punish such a feat! Let us certainly not pretend there is anything moral or just about using the inherently unfair method of government force to do so.


For earlier Grumblings on monopolies see here, here, and here.

1/18/2012

On SOPA and the role of government in society

To all who oppose SOPA, consider:

"The House and Senate bills are backed by the movie and music industries as a means to crack down on the sale of counterfeit goods by non-U.S. websites"

The narrative in defense of government goes something like this, "without government big business motivated purely by greed would harm consumers."

While I readily concede corporations are motivated by greed and self-interest (as opposed to the angels criticizing the free market whom, of course, are not) the astute observer notices that the introduction of government does not prevent this condition.

In fact, all of modern history is replete with examples like the quote above. Corporations are able to generate significantly more influence over the people via government, than they would without it. This is why you never see big corporations lobbying for a free-market system, which if the generally accepted narrative were correct, one would expect them to do just that.

The profit and power that can be obtained by co-opting government is infinitely greater than trying to figure out a way to come up with something better than the Iphone, for instance!

This article contains the opening quote above, but has nothing else to do with my point: http://www.businessweek.com/news/2012-01-18/u-s-lawmakers-abandon-anti-piracy-bills-as-google-protests.html