Longman Dictionary of contemporary English.
Monopoly : first definition : a right or power held by one single person or a group to provide a service, produce something, etc. “The postal service is a government monopoly” (=no one else is allowed to provide this service)
The second definition actually is the definition of private property…
Precisely. As Walter Williams likes to say, “I hold a monopoly on the affections of Mrs. Williams. She holds a monopoly on mine.” If we use that definition of monopoly, we’re forced to admit that there’s nothing wrong, in general, with monopolies. If we insist that monopolies are bad, then we need a different definition.
Rothbard argues that we should define monopoly in terms of the power to exclude competition forcibly, partly due to the above consideration, but mainly because the economic consequences of monopoly really belong to that phenomenon particularly. For example, I can’t demand and price I want for oil, even if I have the world’s only oil well, unless I can also prevent people from using biodiesel, coal, coal, nuclear and other alternative energy sources.
Today people will pay $7/gallon if they must for gas, but they won’t pay $1,000,000/gallon. They’ll walk, stay home or go by steamboat first. If gas does hit $50/gallon, say, it will primarily be the government’s fault for stifling alternatives with overregulation.
–Len
Are you so sure that the 2nd definition is the definition of private property? Because I could own something that is not shared by others and have stolen it. You might call it “private property” but it certainly is not “private property” in terms of a libertarian theory of justice in property aquisition. It’s not a product of labor and it wasn’t voluntarily exchanged for and it wasn’t a gift. Using that definition of private property, the state is private property, since it most certainly is exclusively controlled.
Depends whether you’re referring to de facto or de jure control. Just as I would never call a thief an “owner” (though Stranger has done so in the past), so I automatically interpolate “legitimate” in the right spots in the definition. A’course, that sort of thing sometimes results in confusion. I was recently reminded on another forum that FDR can’t be a “criminal,” since he was never in fact convicted…
–Len
It seems to me that the disputed and more common definition of monopoly as a single provider of a good or service within a territory logically follows from the Rothbardian one. If the forced exclusion or restriction of competition is consistantly followed through, what you eventually are left with is a single provider of the good or service within a territory. The state itself is a singular provider of certain services within a territory as a consequence of its power to restrict all of the competition within the territory. So in a certain sense perhaps both definitions make sense in relation to eachother.
Of course you’re right. My comment was a bit sloppy - or at least incomplete.
Right. So I wouldn’t =]
Yes, but not vice versa. One could be the only provider of some good without forcibly excluding competitors. In that case, the economic consequences that follow from having a monopoly, don’t follow.
–Len
I didn’t mean to nitpick or anything but it did seem that the definition was a bit too broad.
Agreed. Although in a free market I think that a singular provider would find it hard to sustain themselves in the long-term.
This is a common argument. Some will argue that the state shouldn’t even sell the property because they never legitimately owned it. I’m not such a stickler for such things. The idea is to get to a state of freedom quickly and efficiently. I find no reason why the state shouldn’t be allowed to sell off something to a private person for the sake of expediency. It’s not a perfect solution but it works. Homesteading, in my opinion, for certain things simply cannot work efficiently. It’s a fine process for something that was never owned (and yes, a lot of people will argue the state never owns anything anyway) but I don’t ever see it as a real solution to privatizing state owned operations. It isn’t efficient and it will cause problems.
I think the best route to take in privatizing anything is for the state to set up a public company with temporary officers and then sell stock in it on the stock exchange until 100% of the company is owned. The money raised from the sale of the stock should be used for the capital expenditures and expenses of the new company. The new stock holders could then elect new Board members who would then appoint new officers for the company. Of course we have now just gone from a public (state owned) monopoly to a private one but that isn’t a big issue really. As long as the state is no longer regulating that industry and giving special privileges to the newly formed company free market competitors will emerge to offer better more efficient service.
No, it is not a perfect and pure anarcho-capitalist way of getting the job done (such as using the homesteading theory) but then again no one ever said the world is perfect and pure. The goal is to get the state out of the way so the market can start functioning as quickly as possible. By going the route of simply establishing a public company which anyone can buy into we can quickly and efficiently remove the state. Competition will quickly emerge and a real free market will soon exist.
It could under certain conditions but not likely. Most monopolies have been created because of interference in market by the state. With the state out of the picture the free market will ensure that monopolies can’t exist because there is always someone who can do it cheaper and better. The only way for a natural monopoly to exist, from what I understand (and I could be wrong), is they must control every stage of production. The only way Standard Oil could be a natural monopoly is if they controlled every oil field in the nation and in the world. That is an impossibility. The famed Standard Oil wasn’t a real monopoly. Yes, it controlled large amounts of distribution networks (about 85-90%) but only controlled something like 11% of the market for the exploration and pumping of oil. By the time the government stepped in to break Standard up it’s market share was falling as competition was growing. If the government had stayed out of the picture other competitors would have naturally developed taking larger shares of the market.
Likewise, Microsoft isn’t a monopoly even though their operating system is on about 90% of the computers in the world. There is plenty of competition from companies such as Apple and other OS’s such as Linux. Apple is continuing to grow in market share and will continue as will Linux. So while it is possible for monopolies to occur it is not likely as there will always be someone who is willing to compete.
Any form of enterprise where risk is concentrated in the owner is capitalistic.
Monopolists do have to sell goods to the market in order to profit from their monopoly. It cannot be said that their income is stolen.
IF an activity has been monopolized(using force) THEN there is NO market for that activity. Are you saying that socialism is actually capitalism ?
Stranger’s definitions seem to be so broad and vague that it appears like he’s legitimizing monopolism and the state. I’m officially confused as to what the heck he is trying to say. From what I can tell, it appears like he’s saying that monopolies and states are “capitalist”!
No I am saying that monopolists do have to sell goods to the market, regardless of the fact that other producers are banned from supplying the same good as them.
I am using the definition of capitalism that Bohm-Bawerk used in his defense of capitalism.
They don’t “have to”. They do it because it’s a smokescreen for their true activity - their true activity is ‘legal’ plunder.
I’m pretty sure the activity of a monopoly telecom company is telecommunications.
I’m pretty sure you are trying to defend legal monopolies - that is, communism.
I am trying to answer the economic question asked in an economic forum, that is whether a private monopoly is better than a public monopoly. I am not interested in debating the ideological purity police.
Are you using the correct definition of monopoly? It’s hard to tell from your posts in this thread. A monopoly is defined by forcible exclusion of competition. A “private monopolist” must use either legal or illegal force, which in extant polities means that he must either shoot competitors himself, risking punishment, or get the police to shoot them for him.
If you have some other definition of monopoly in mind, if affects the meaning of your question.
–Len