Baby Bells

Finance allah shmoop our monopolies Evil Should they be regulated

Should they be illegal Alright well big question Here are

monopolies evil And as bill gates used to say well

not a few own one Well okay bill was just

a little bit evil or maybe a lot depending on

whether or not you came from silicon valley So the

common wisdom among most voting public kind of people is

that monopolies are bad evil and awful Why Because they

can charge anything they want for whatever their product is

They have no competition Keep him honest Well microsoft via

their windows operating system was the greatest monopoly in history

Sorry they're rockefeller And for a long time that company

had massive profit margins until the internet more or less

became the operating system along with all the tools needed

for it And it was all more or less free

ish Wealthy interviewee it took to maintain the windows monopoly

along with regulatory friction eventually killed microsoft's monopoly and well

that was that But for a while microsoft had someth

fifty percent net profit margins about five times the margins

of even the best s and p five hundred companies

Worth noting coca cola and pepsi have what is called

a duopoly The two of them together would be essentially

a monopoly of soda but well they more or less

collude on pricing and terms and elbow out any would

be third editor so their margins are high about twenty

five percent or about half of what monopoly profit margins

give so that's the quote bad stuff unquote a monopoly

brands unfair advantage But if you were a shareholder of

microsoft in the eighties and the first half of the

nineties well you'd be just tickled Have you owned one

hundred shares of that awesome monopoly in nineteen eighty four

and held them fifteen years Well your original investment of

one hundred dollars would have turned into thousands like six

seven eight thousand dollars So what's so bad about making

hundreds of times your money Oh and here's another thing

to think about it and t the big t on

the big board Well t was the big monopoly before

microsoft and it owned local and long distance carriage of

phone calls for half a century Give or take it

had obscene profits in large part by virtue of the

us government granting them federal licenses to operate in various

areas in whatever form they needed Teo you know wire

our country But a number of good things came from

this monopoly one thing being that a teen t never

cut its dividend like most of the other companies did

during the great depression A lot of families lived on

that and not cutting that dividend literally saved the lives

of those families like hundreds of thousands of americans who

lived on it for luxuries like eat food and rent

so on Additionally is part of the monopoly handshake Att

and t was required to wire rural america These guys

remote farmers like if even one home existed forty miles

from pretty much nowhere a teen t had to spring

wires on poles all the way down to dead ends

ville and get that home wired and that served the

country well when farms became factories and well a whole

country could talk to each other without monopoly level profits

gained from more dense population areas Well att and t

never would've had the money or desire to spend a

few hundred thousand dollars it cost to connect that loan

Farmhouse in the boonies to the grid Why was that

so important Well eventually that loan farmhouse made it with

another farmhouse and there were two of them and then

five and then twenty and then three hundred and yes

having ubiquitous connectivity of every living human being in the

country said something about the u s of a that

we took care of all of our people whether city

slicker a redneck and allowed everyone to share in the

opportunities provided by a fancy new technological marvel called the

telephone So our monopolies good bad lukewarm Well hard to

say so Uh maybe monopolies are like pineapples sometimes good

like in a fruity tropical drink and sometimes terrible like

on a pizza Yeah we're just saying you have to

peel off the skin maybe it's better if you do

that and don't bother sending in an angry pineapple pizza

related letter we've got a special place for those in 00:04:21.049 --> [endTime] a shmoop h q huh