Monopolist warfare

[DrSammyD]

So currently I’m discussing with someone on another forum the possibility of some business bombing all surrounding competing businesses in order to gain a monopoly. He thinks that once a business gains that monopoly, it will be able to keep new competitors from entering with the use of barriers to entry.

We are assuming an anarchist society.

His last post stated this

If you want to get into the technical terms, what I’m talking about are barriers to entry. A monopolized industry has much, much higher barriers to entry than a competitive industry. Depending on the industry and the monopoly, those barriers can make it effectively impossible to break the monopoly.

I am about to respond with this

The whole reason you would go to war to gain a monopoly is so that you could charge what ever you wanted. If you actually do raise your prices, you lift those barriers to entry (because now the profit margins are higher), thus opening yourself to competition. So any profits gained from the monopoly would go towards fighting upstart competitors, thus rendering the whole thing futile. If you don’t raise the prices, then what the hell was the point of waisting money on the war? In this way threat of competition can be just as good as actual competition. Unless you actually get costs down for what ever it is you’re producing, the barriers to entry won’t be there (other than the barrier of you constantly having to attack new competitors, which again, costs more money). Barriers to entry don’t exist because there’s a monopoly, the monopoly exists because of the barriers to entry, namely their ability to get the costs of production so low that they can charge a price so low that it discourages others from trying to start up competition.

Is this a good response? Does anyone have anything to add or subtract?

[liberty_student]

Why would one firm use violence against another in an anarchist society? An anarchist society doesn’t lack law or order.

The same reason why firms don’t do it today would apply.

In general, not only do they have to destroy current competition, they have to destroy all future competition. Without a legal monopoly, they can’t have the violence to support a monopoly without paying the direct costs and facing the consequences of violence. State privilege means the costs of maintaining a monopoly are offloaded onto tax payers.

Monopoly has its roots in privilege, not in firm on firm warfare. It is impossible for a single firm to control a market, unless it becomes a state. And then we’re no longer in anarchism.

[Caley_McKibbin]

@liberty student

State privilege means the costs of maintaining a monopoly are offloaded onto tax payers.

That is the part that can’t be emphasized enough.