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To: MosesKnows
"Why do we fear monopolies and cartels?"

I don't think we should be. The "anti-trust" movement was purely a progressive boondoggle.

In my opinion, a monopoly can only exist for long with the assistance of government. In a truly free market, if the monopoly attempts to fix prices higher than supply and demand would allow, then competition would quickly enter the market and force the monopoly to break up. There is no way to stop this without government shutting down competition.

As to cartels, they are most often international, but even they cannot escape the power of supply and demand for long. OPEC is a good example. The embargo of the 1970's forced prices up for a time, but then numerous competitors entered the market and de-fanged the cartel. In only a few years, the gold price of oil had declined to levels below where they had started. Since then, OPEC has wised up and now is content to make incremental increases to keep the price below the point where competition becomes active. Occasionally, they still miscalculate, as with the recent North Dakota oil boom made possible by world prices that were too high.

22 posted on 08/29/2015 12:33:07 PM PDT by Da Bilge Troll (Defeatism is not a winning strategy!)
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To: Da Bilge Troll
In a truly free market, if the monopoly attempts to fix prices higher than supply and demand would allow, then competition would quickly enter the market and force the monopoly to break up.

Some truth there, for sure. The problem occurs when the monopoly exists in a high-infrastucture industry. If I, for example, owned all the oil refineries in the US, I'd have little worry of someone trying to compete with me.

So my pricing would not be based on keeping customers, as is the case with competitive industries. I could charge pretty much whatever I wanted, as long it wasn't so high that you would be willing to spend millions to build your own refinery.

27 posted on 08/29/2015 12:46:09 PM PDT by Leaning Right (Why am I holding this lantern? I am looking for the next Reagan.)
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