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> Monopolies only form in a free market when the government enforces them. This is incorrect. There are many industries that lead to natural monopolies in the
by voisin 4y ago
> Monopolies only form in a free market when the government enforces them.
This is incorrect. There are many industries that lead to natural monopolies in the absence of government breaking them up. Anything with incredibly high fixed entry costs, few substitute opportunities and low variable costs tend toward monopolies (at least regionally).
- WalterBright 4y agoName one.
- voisin 4y agoThe quintessential example is railroads, but also most utility providers (electricity, water, natural gas). Toll Roads / Bridges (often the substitutes are not good alternatives). Telecoms (to a lesser degree and declining thanks to the entry of new substitutes).
- WalterBright 4y agoExcept that railroads compete with each other, and with all the other forms of transportation. Telecoms only had a monopoly when the government enforced it (long distance AT&T). Phone companies often had local monopolies because cities would enforce them. People can (and did) build more roads and bridges if someone was charging monopoly rents.
- voisin 4y agoNatural monopoly != zero competition. I’d recommend you read this for more info: https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly
- WalterBright 4y agoYeah, I've read it. Didn't find it compelling.
- dredmorbius 4y agohttps://news.ycombinator.com/item?id=32762714 https://news.ycombinator.com/item?id=32762714
- dredmorbius 4y agoWhat I've come to find an interesting element of monopolies is that virtually all that I can think of seem to be fundamentally networked entities. That might be physical (railroads, utilities, communications, broadcast) or logical (marketing, wholesale, retail), and might involve edges/links (rail, comms), vertices/nodes (ports, datacentres), or quite often a mix of both. All tend to see some large realm over which there is an increasing return to scale (if there weren't, monopolies wouldn't form), and quite often a single entity may be established over multiple networks or modalities (e.g, Google controlling search, online advertising, and Web browser development). I've been hard pressed to come up with examples of monopolies which aren't describable as networks, though that description may not at first be obvious. Non-government-sanctioned monopolies exist as (illegal) drugs cartels, criminal syndicates, and warlord hierarchies, in which growth and maintenance of the network is typically obtained through direct (and non-legally sanctioned) force of arms, coercion, or intimidation.
- nyokodo 4y ago> There are many industries that lead to natural monopolies Care to provide a list of these industries conducive to natural monopolies that have monopolies broken up by government?
- voisin 4y agoSee my response in a sibling thread for a partial list of industries conducive to natural monopolies. Governments have had to step in to regulate each of these industries to varying degrees to rein in their power because of the fact that the industries tended toward monopoly.
- WalterBright 4y agoPlease name a company, not an industry.