Tuesday, March 30, 2010

CRASH: Why The Collective's Love Of Monopoly?

When you hear a Deemocrat saying "choice and competition" in the same breath where they are advocating a compulsory ANYTHING, you know that you are being lied to.

Even in our nation, where economic education is abysmal, most high-school kids could tell you that monopolies are bad.  Beyond that, the collectivist public school shibboleth they've been taught takes over and they explain how capitalism breeds monopoly, and how it takes the enlightened policy of a powerful government to keep them at bay.

That, of course, is the inverse of the truth.

In truth, one of the things that distinguishes market capitalism is its power and natural tendency to destroy monopoly.  This was discussed by Adam Smith, who warned that incumbent members of the "merchant class" would naturally gravitate toward monopoly; it is human nature.  He also said that the only time such an enterprise could survive for any length of time was for it to ally with government to obtain shelter from competitive market forces. 

This is demonstrably true.  Sometimes, from the inception of our Republic, society has seen some utility in granting a monopoly.  Patents are an example, granting an inventor (or their assignee) a special temporary monopoly to foster innovation.  The same is true of copyright.  These are examples of the use, by design, of monopoly linked with government, intended to make the nation more prosperous, innovative, and culturally rich.  But note that they are overt policy, and they are temporary.

Monopolies are, certainly, generally a bad thing if allowed to exist for long.  They tend to be like dinosaurs that are kept artificially alive long after they are inviable in their environment.  They are inefficient, costly, and produce inferior quality compared to what competitive enterprises would offer.  If early computer makers held a monopoly, computers would still be enormous and incredibly expensive.

The period of the "trust-busters" was, in reality, a period where powerful interests used do-gooders and Progressives (collectivists) to gain government help in avoiding market forces.  Railroads, for instance, were in a competitive environment for freight.  They were the real force behind the birth of the Interstate Commerce Commission.  While the press was full of talk about having government control rates for the benefit of the "little people", what the ICC did was control rates generally UPWARD.  Regulation fosters monopoly or quasi-monopoly by restricting entry into markets by new players, with predictable results.

The collective paradoxically talks about hating monopoly, while collaterally insisting on it in its very worst form; the government itself.  This is exactly what you have with single-payer health-care, our postal system, government education, and most publicly-owned utilities.  Monopoly is the essence of socialism.  But, unlike a private monopoly, these systems are all but immune to a law suit, or any chance that competition will challenge them.  Often, you won't even have the choice of boycotting them.

They are protected by force of law, backed by raw force.


  1. THANK YOU for posting this! I love your blog!!

    Common Cents

    ps. Link Exchange???

  2. Thank you, in return.

    Sure. Let's exchange links...

    That's not creepy or anything, right...???

  3. It's amazing how people think a single payer system isn't a monopoly.

    Love your blog, Rags, just as I liked your posts on MM.

    Oh, and get a room you two.

  4. Thanks, John...

    except about the room deal...