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Finance allah shmoop our monopolies Evil Should they be regulated

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Should they be illegal Alright well big question Here are

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monopolies evil And as bill gates used to say well

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not a few own one Well okay bill was just

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a little bit evil or maybe a lot depending on

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whether or not you came from silicon valley So the

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common wisdom among most voting public kind of people is

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that monopolies are bad evil and awful Why Because they

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can charge anything they want for whatever their product is

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They have no competition Keep him honest Well microsoft via

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their windows operating system was the greatest monopoly in history

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

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had massive profit margins until the internet more or less

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became the operating system along with all the tools needed

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for it And it was all more or less free

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ish Wealthy interviewee it took to maintain the windows monopoly

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

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that was that But for a while microsoft had someth

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fifty percent net profit margins about five times the margins

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of even the best s and p five hundred companies

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Worth noting coca cola and pepsi have what is called

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a duopoly The two of them together would be essentially

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a monopoly of soda but well they more or less

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collude on pricing and terms and elbow out any would

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be third editor so their margins are high about twenty

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five percent or about half of what monopoly profit margins

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

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brands unfair advantage But if you were a shareholder of

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microsoft in the eighties and the first half of the

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

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hundred shares of that awesome monopoly in nineteen eighty four

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and held them fifteen years Well your original investment of

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one hundred dollars would have turned into thousands like six

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

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

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to think about it and t the big t on

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the big board Well t was the big monopoly before

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microsoft and it owned local and long distance carriage of

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phone calls for half a century Give or take it

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had obscene profits in large part by virtue of the

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us government granting them federal licenses to operate in various

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areas in whatever form they needed Teo you know wire

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our country But a number of good things came from

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this monopoly one thing being that a teen t never

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cut its dividend like most of the other companies did

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during the great depression A lot of families lived on

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that and not cutting that dividend literally saved the lives

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of those families like hundreds of thousands of americans who

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lived on it for luxuries like eat food and rent

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so on Additionally is part of the monopoly handshake Att

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and t was required to wire rural america These guys

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remote farmers like if even one home existed forty miles

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from pretty much nowhere a teen t had to spring

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wires on poles all the way down to dead ends

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ville and get that home wired and that served the

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country well when farms became factories and well a whole

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country could talk to each other without monopoly level profits

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gained from more dense population areas Well att and t

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

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few hundred thousand dollars it cost to connect that loan

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Farmhouse in the boonies to the grid Why was that

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so important Well eventually that loan farmhouse made it with

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another farmhouse and there were two of them and then

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five and then twenty and then three hundred and yes

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having ubiquitous connectivity of every living human being in the

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country said something about the u s of a that

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we took care of all of our people whether city

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slicker a redneck and allowed everyone to share in the

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opportunities provided by a fancy new technological marvel called the

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telephone So our monopolies good bad lukewarm Well hard to

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say so Uh maybe monopolies are like pineapples sometimes good

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like in a fruity tropical drink and sometimes terrible like

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

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

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

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

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