Acquiring Market Share

Acquiring a share of a free-market, rather than mergers and buy-outs, requires replicating or improving the successful behavior that causes the empirical measure of success--the profit margin.

Replication and improvement means proliferation--expansion--of the marketplace, not the contraction of merging and acquiring markets which, for the most part, is the business of investment banks, private equity firms and hedge funds. These financial firms know very well their investment practices deflate the economy. They position with various kinds of instruments structured to gain value on the short side as the economy declines--the notorious credit default swap, for example.
The effect is an economy in command and control.

If the profit is margined on command, it is not free-market economics.

In a free market, an expanding profit margin is a measure of an expanding marketplace and demand (supply-side economics).

In a consolidated organizational environment, despite being touted as the best model for expanding supply, a contracting marketplace and a declining demand supports the profit margin (sustained capital accumulation) and resists the declining rate of profit (the distribution necessary to sustain demand and make a profit in an expanding free market). This intentional support and resistance occurs in both the short and long term. The result is a net gain for the commanders (the elite) and a net loss for the commanded (the non-elite).

While the gain is considered to be legitimately ontological by the operation of free-market economics, the gain is nevertheless retributively valued by the loss. A correction of the value is then always in demand and forms a gamma-risk ontology. Managing that risk, instead of the free marketplace, leads to a growing authoritarian regime that is equivalent to the lack of free-market legitimacy.

Mainstream economists who strongly supported the investment methods that led to the current liquidity crisis, known as the Great Recession, said these means, now the subject of heightened regulatory authority, would lead to optimal economic expansion and, therefore, no need for government. These economists explain the massive accumulation of errors as, not fully understanding how the economy equilibriates.

Notice how investments made in "dark markets" free of government regulation did not result in less need for government. Quite the contrary, too-big-to-fail firms rely on government intervention. Let's face it, the Ayn Rand philosophy is a lot of hocum if the organizational model is not there to support it.

Free markets do not operate in the dark, and the dark marketeers say they were operating with Rand's practical philosophy. They continue to advocate Rand's philosophy despite the practical failure.

Clearly, then, there is a practical effect to be achieved despite the free-market philosophy having been accepted by a controlling elite authority (and there is no reason that will change with a socialist legitimacy). We must consider that if the dark marketeers knew their methods would achieve the Great Recession, it would be necessary to operate in the dark.

Now that the free-market correction has come in the form of government authority, complaining that there is too much government intervention, which, like Ayn Rand says, causes the problem, is complete nonsense!

Government intervention does not cause itself, and if too-big-to-fail firms were really the model of free-market efficiency, it would not be necessary to operate them in the dark.

Not learning from the mistake here means that the Great Recession is no mistake. It is, as we now hear the conservative argument being delivered, the classical, free-market model of comparative advantage at work to re-adjust labor costs to third world levels where peasants just left the farm.

The problem here is not labor, it is capital. It is capital that needs the adjustment, allowing for economic expansion at the lowest possible price, rather than contraction of supply at the highest possible price with labor always trying to cause the distribution necessary to prevent crises of liquidity.

Increasing supply and controlling costs, whether forging steel or providing health care, is less about combining Ayn Rand with a too-big-to-fail efficiency than just simply accepting the model of pluralism.

Since the too-big-to-fail practice is, by definition, so obviously an organizational technology inimical to free markets, mainstream economists are now saying this "doctrine" should be abandoned to allow for failure. It is absurd, of course, because being so organized is too big for failure. The remedy is to allow for failure, not to disallow being too big.

The mainstream does not give up easily. They are apparently paid to persist in error which, of course, suggests there is no error, just fully intended consequences. The mainstream fully understands that the economy will not "equilibriate" with the investment vehicles being utilized, but "dis-equilibriate."

Now that the crisis of disequilibriation has occured, mainstream economists now argue we can benefit from the correction of valuations. Specifically: we will now benefit from the readjustment of labor costs, or a deflationary reduction of demand that increases supply without expanding the marketplace (false supply-side economics).

Rather than contracting the available supply by growing the size of a fewer number of corporate bodies, supply is added by adding to the number of firms available to supply the "growing" demand and acquire market share. The rate of profit, rather than declining, gets pluralistic support--it is growing, economic growth is occurring--without inflation or unemployment.

It is possible, then, for capital formation to occur without either the inflation liberals prefer (flooding the market with demand without increasing supply), or the unemployment conservatives opt for (starving market demand with an accumulation of capital to grow the economy which, of course, is not growth at all). Both options, of course, as we observe over and over again, cycle to progressively consolidate power, politically and economically, into one big corporate body with an evermore complete command and control acting to manage "the systemic risk."

Deciding how market share can be acquired is to decide how we manage the risk.