Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

To: semimojo

Both of those worthies would be closer to the idea that governments ar the reason monopolies exist.

From the Hayek link:

“Even though he discerns a strong case for prohibiting by general rules price discrimination by monopolists, he thinks governments’ record in such en- forcement is “so deplorable that it is astounding that anyone should still expect that giving governments discretionary powers will do anything but increase” obstacles to market entry.

He further cautions that all governments that have attempted to mitigate the abuses of monopolies have ended up favoring some “good” monopolies and disfavoring “bad” ones, which only makes matters worse. Turning transitory mo- nopolies into permanent ones is the artifice of governments.”

For Smith, The book itself is clear enough, from page 61 of The Wealth of Nations:

A monopoly granted either to an individual or to a trading company has the same effect as a secret.… The monopolists, by keeping the market constantly under-stocked … sell their commodities much above the natural price … the price of free competition.…

The exclusive privilege of corporations, statutes of and apprenticeship, and all those laws which restrain, in particular employments, the competition to a smaller number than might go into them, have the same tendency, though in a less degree. They are a sort of enlarged monopolies, and may frequently … in whole classes of employments keep up the market price of particular commodities above the natural price.… Such enhancements of the market price may last as long as the regulations of police which give occasion to them.3

mises.org would be the best place for your studies instead of a liberal NY law school.


39 posted on 11/28/2017 11:23:21 AM PST by FreedomNotSafety
[ Post Reply | Private Reply | To 32 | View Replies ]


To: FreedomNotSafety
There's no question that government can have a role in creating monopolies - either through bad policy or good.

I think the original AT&T monopoly was good public policy, bringing near universal phone service to the country which greatly enhanced our collective economic well being. And there are certainly examples of bad monopolies created by government.

There's also no question that monopolies can arise absent government involvement, and it's the fundamental nature of capitalism that companies will try to increase their pricing power by eliminating the competition, often by acquiring them.

It's also indesputable that every economic theory includes some level of governmental regulation to protect competition.

Some, like the Austrians, have a very light touch but even Hayek didn't believe in complete laissez faire.

The larger point is that in the real world monopolies occur regardless of how they came about and where they do exist government has a legitimate role in regulating them.

42 posted on 11/28/2017 11:50:52 AM PST by semimojo
[ Post Reply | Private Reply | To 39 | View Replies ]

Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson