“Since outright grants of monopoly or quasi monopoly would usually be considered baldly injurious to the public, governments have discovered a variety of methods of granting such privileges indirectly, as well as a variety of arguments to justify these measures. But they all have the effects common to monopoly or quasi-monopoly grants and monopoly prices when these are obtained.
The important types of monopolistic grants (monopoly and quasi monopoly) are as follows:
- governmentally enforced cartels which every firm in an industry is compelled to join;
- virtual cartels imposed by the government, such as the production quotas enforced by American agricultural policy;
- licenses, which require meeting government rules before a man or a firm is permitted to enter a certain line of production, and which also require the payment of a fee—a payment that serves as a penalty tax on smaller firms with less capital, which are thereby debarred from competing with larger firms;
- “quality” standards, which prohibit competition by what the government (not the consumers) defines as “lower-quality” products;
- tariffs and other measures that levy a penalty tax on competitors outside a given geographical region;
- immigration restrictions, which prohibit the competition of laborers, as well as entrepreneurs, who would otherwise move from another geographical region of the world market;
- child labor laws, which prohibit the labor competition of workers below a certain age;
- minimum wage laws, which, by causing the unemployment of the least value-productive workers, remove their competition from the labor markets;
- maximum hour laws, which force partial unemployment on those workers who are willing to work longer hours;
- compulsory unionism, such as the Wagner-Taft-Hartley Act imposes, causing unemployment among the workers with the least seniority or the least political influence in their union;
- conscription, which forces many young men out of the labor force;
- any sort of governmental penalty on any form of industrial or market organization, such as antitrust laws, special chain store taxes, corporate income taxes, laws closing businesses at specific hours or outlawing pushcart peddlers or door-to-door salesmen;
- conservation laws, which restrict production by force;
- patents, where independent later discoverers of a process are debarred from entering a field production.”
— Murray Rothbard, Power & Market
“…Moreover, Rothbard refuted every alternative theory as nonsense, nonoperational, or false. It is nonsense, for instance, to define a monopolist as someone who has control over his price (a “price-searcher”). Every businessman has perfect control over his price (and no control at all over the quantity bought at that price by consumers). Hence, under this definition, no one exists who is not a monopolist. Likewise, is it nonsense to define a monopolist as “the only seller of any given good,” for in an objective sense, every seller of every product is always the only seller of his own unique product (brand). Thus, everyone is a monopolist with a one-hundred-percent market share of one’s own product. Yet, this circumstance does not affect in the slightest that each entrepreneur must compete at all times with every other entrepreneur for consumer spending, regardless how unique or different one’s goods may be.
On the other hand, in a subjective sense, no seller of anything can ever be established definitely as a monopolist. According to this interpretation, the term “given good” means “a good as defined by consumers.” Thus, the determination of whether or not the seller of something is its only seller, or of how large his market-share is, depends on the consumers’ definition of what this good is; that is, on their classification of particular physical objects into various groups of homogeneousgoods. Not only can such classifications continually change, but different consumers can classify the same physical objects differently. Hence, in this sense the term monopolist becomes practically useless and non-operational, and all attempts to measure a product’s market share must be considered futile…”
— Hans-Hermann Hoppe, Economics, Science and Liberty
evokit asked: What is your view of government regulators like the Australian Competition and Consumer Commission (ACCC) who can prevent mergers which would create monopolies or an anti-competitive environment?
Hello :), apologies for letting this sit so long.
Firstly, I find amusement in the irony of a monopoly (of ultimate decision making over a given territory with the ability to tax) i.e a state: trying to ‘create’ competition or prevent other ‘monopolies’. It is a glaring contradiction and illogical to support a monopoly, in an effort to prevent monopolies, or anti-competitive behavior.
The state cannot create competition, just like it cannot create wealth. All it can do is redistribute what has already been stolen. The state inhibits competition by its very nature. Regulations when not done by the market, are often used to reduce competition in favor of big business and hurt the little guy. The self interest for the politicians is of financial support to get re-elected.
Monopoly is properly defined as ‘a barrier of entry’. Cartels and anti-competitive behavior such as collusion can only be maintained through the use of the state.
Australia’s anti-trust legislation is known as the Competition and Consumer Act (2010), formerly the Trade Practices Act (1974). The arbitrariness of the legislation can be seen in the following:
- Prices too low: price war, anti-competitive to kill competition.
- Prices the same: collusion.
- Prices too high: gouging the public.
Whatever businesses do, they can be considered criminal. It’s a joke & completely arbitrary.
“We do not know, and economics cannot tell us, the optimum size of a firm in any given industry. The optimum size depends on the concrete technological conditions of each situation, as well as on the state of consumer demand in relation to the given supply of various factors in this and in other industries.”
~ Murray N.Rothbard. Man, Economy and State, Chapter 10 Monopoly and Competition, p.629-754.
Suggested sources on the issue:
It’s the real estate game for the 21st century! Inspired by the original Monopoly game, Anti-Monopoly is where free-market competitors clash with ruthless monopolists…you just have to decide which one you want to be. Players who choose to be competitors charge fair rent, create supply and demand and can end a price war. Monopolists, on the other hand, are greedy, charge high rents, restrict supply and can go to prison for price fixing. The players follow different rules, depending on their status, in their quest for big money and real estate.
Players must choose free enterprise or monopoly, and each group must adhere to different rules. Will the winner be the competitor who charges fair market value for rent? Or will it be the monopolist who takes control over entire regions and charges higher fees? Anything can happen in Anti-Monopoly!
Game includes 28 title cards, 25 Competitor cards, 25 Monopolist cards, Game board, six wooden pawns, 50 wooden houses and apartments, dice, paper money and instructions. For 2-6 players. Made in China.
This looks like an amazing game. Since most monopoly games end in tears, or the board & pieces being flown across the room haha.. I’m assuming this will be the opposite?
…Furthermore, the purely free-market, stateless society would contain within itself a system of built-in “checks and balances” that would make it almost impossible for such organized crime to succeed. There has been much talk about “checks and balances” in the American system, but these can scarcely be considered checks at all, since every one of these institutions is an agency of the central government and eventually of the ruling party of that government. The checks and balances in the stateless society consist precisely in the free market, i.e., the existence of freely competitive police and judicial agencies that could quickly be mobilized to put down any outlaw agency.
It is true that there can be no absolute guarantee that a purely market society would not fall prey to organized criminality. But this concept is far more workable than the truly Utopian idea of a strictly limited government, an idea that has never worked historically. And understandably so, for the State’s built-in monopoly of aggression and inherent absence of free-market checks have enabled it to burst easily any bonds that well-meaning people have tried to place upon it. Finally, the worst that could possibly happen would be for the State to be reestablished. And since the State is what we have now, any experimentation with a stateless society would have nothing to lose and everything to gain. - No More Military Socialism by Murray N. Rothbard
If, in fact, we cast a cold and logical eye on the theory of “limited government,” we can see it for the chimera that it really is, for the unrealistic and inconsistent “Utopia” that it holds forth. In the first place, there is no reason to assume that a compulsory monopoly of violence, once acquired by the “Jones family” or by any State rulers, will remain “limited” to protection of person and property. Certainly, historically, no government has long remained “limited” in this way. And there are excellent reasons to suppose that it never will.
First, once the cancerous principle of coercion-of coerced revenue and compulsory monopoly of violence-is established and legitimated at the very heart of society, there is every reason to suppose that this precedent will be expanded and embellished. In particular, it is in the economic interest of the State rulers to work actively for such expansion. The more the coercive powers of the State are expanded beyond the cherished limits of the laissez-faire theorists, the greater the power and pelf accruing to the ruling caste operating the State apparatus. Hence, the ruling caste, eager to maximize its power and wealth, will stretch State power-and will encounter only feeble opposition, given the legitimacy it and its allied intellectuals are gaining, and given the lack of any institutional free-market channels of resistance to the government’s monopoly of coercion and the power of ultimate decision-making.