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The idea of economic monopolies makes sense only for produced goods -- for example, diamonds, in which you influence what the market will bear by producing more
by rsj_hn 4y ago
The idea of economic monopolies makes sense only for produced goods -- for example, diamonds, in which you influence what the market will bear by producing more or less. If you can get all the producers together to restrict supply, then they can charge higher prices because they are selling to a smaller subset of buyers (those willing to pay the most). But notice the coordination is never on price -- OPEC doesn't get together to say "We will all charge $90 for oil" -- they get together to say "We will decrease production by 1 million bpd". So price is the target but the actual control is not price, but quantity.
The point of a monopoly is to manipulate the price by increasing or decreasing production, and this is why you need a produced good. Actual prices are set by whatever the market can bear.
But there is no such thing -- even conceptually -- in a market for non-produced goods such as land. Now that doesn't mean they can't be in violation of some law -- maybe they were coordinating to exclude bad tenants based on a protected category or something like that.
But then you will first object, "The land isn't produced, but the structure on the land is produced" and then I'll say that if there was an accusation of collusion among homebuilders, then you would have a point. But not landlords (there are many examples of monopolistic practices in housing, but in the form of zoning regulations).
And then a second objection is "Renting also requires property management services to owners. Maybe there is a collusion among those providing property management to charge more" -- but they are charging the property owner, and it's a field with such relative low entrance bars that it's hard to imagine owners getting screwed by some collusion among property managers.