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People fail to understand the difference between innovation driven monopoly and government enforced monopoly. The former is commendable, indicating that a comp
by geomark 11y ago
People fail to understand the difference between innovation driven monopoly and government enforced monopoly.
The former is commendable, indicating that a company has developed a product so useful that it becomes so widely adopted as to become a monopoly. Nobody is forced to buy the product - people just find it so useful that the it dominates in the marketplace. And there is nothing preventing the rise of a competitor other than the monopolist's success. Got enough smarts and money to beat them? Then go for it.
That's quite different than when a company uses regulatory capture to get regulations passed that maintain their monopoly and block competitors.
- eggy 11y agoI understand that, and I like the label of Corporatism when it is a big company colluding with the state, as opposed to Capitalism, which is for all its good and bad, better than the alternatives right now.
- geomark 11y agoYeah, I guess those are pretty good labels. I looked for a succinct definition of Corporatism: "the control of a state or organization by large interest groups." That happens in every economic system, not just capitalism.
- pasquinelli 11y agohow does a company innovate themselves into a monopoly? what's stopping others just copying their innovation and competing with them?
- onebigbug 11y agoYou haven't listed all the possible options for obtaining a monopoly, though, including the one Microsoft was convicted of. In addition to creating a better product and by controlling the government, you can also engage in tying, whereby you have a monopoly (perhaps rightfully gained through innovation) and use it to gain a monopoly in another area by forcing customers to buy both together, you can sell at a loss until your competitors go out of business and then raise the price, you can collude with other companies to fix prices, or to only service certain areas or sectors. Having a monopoly is not illegal, exploiting your position as a monopoly to maintain it is. That is what Microsoft did.