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From: mmt@dciem.UUCP (Martin Taylor)
Newsgroups: net.politics
Subject: Re: Re:Big Corporations 'filling the vac
Message-ID: <1394@dciem.UUCP>
Date: Thu, 14-Feb-85 17:18:18 EST
Article-I.D.: dciem.1394
Posted: Thu Feb 14 17:18:18 1985
Date-Received: Thu, 14-Feb-85 19:12:36 EST
References: 
Reply-To: mmt@dciem.UUCP (Martin Taylor)
Organization: D.C.I.E.M., Toronto, Canada
Lines: 43
Summary: 


>Goodness me.  I believe it's been pointed out several times: monopolies
>may exist, but they are short-lived in the free market.  I myself
> ...
>You'd better demonstrate that "monopoly" can be other than a short-lived
>condition before you start asking people to worry about it, or do you
>LIKE misrepresenting the situation?

I'm not sure I buy the argument about monopolies being unstable
in a free market.  It seems to rely on linearizations that may not
be justified.  But that's not the point of this note.

When a large company has a monopoly, that they are using to charge
prices higher than their costs warrant, they will be unwilling to
see their market share drop (much; some token sharing might be good PR).
I suspect that not all their directors or middle-line managers will
be good ethical libertarians, and some might like to do something
about the situation such as a few tacks on the driveway of the competitor,
a little rumour about safety, or perhaps a bomb or two.  Nothing that
could be pinned on the company, of course: "just an unfortunate
incident by a misguidedly enthusiastic subordinate, Mr. Nixon."
Perhaps one or two people are hung out to spin in the wind, or whatever
the expression was.  But the competition is somewhat reduced in its
ability to compete.

Another point that leads to the suspicion that monopolies might be
more stable than the equations suggest: knowledge is power, and who
has the knowledge tends to get more powerful.

Whether monopolies based on fair competition and good production and
pricing practices are good or bad is a totally different question.
The arguments against state subsidies are that the state is a stable
monopoly creating unfair competition.  Why shouldn't a fair monopoly
break the competition by selling (for a while) at ruinously low prices?
Once the competition is forced out, prices can go back up to cover it,
can't they?  This (quite probable) behaviour leads to the suggestion
that in a free market without Government intervention or regulation
monopolies might well be both stable and bad.
-- 

Martin Taylor
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