View Poll Results: Do you believe in natural monopolies?

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Thread: Do you believe in natural monopolies?

  1. #1
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    Do you believe in natural monopolies?

    A simple question to start a discourse.

    I do not believe in natural monopolies since they wouldn't exist in a free market. They only exist when the government regulates in favor of established businesses, which bars entry into the marketplace from newer competitors.

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    Re: Do you believe in natural monopolies?

    In certain circumstances over periods of time yes.

    Potable water that is piped into your house, rather then being delivered by truck is such a case

    It is very unlikely that a secondary water company is going to build a secondary distribution network (ie pipes) to homes an neighborhoods that already have them, The costs are extremely high, for a very low profit margin item
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    Re: Do you believe in natural monopolies?

    Quote Originally Posted by Lord Tammerlain View Post
    In certain circumstances over periods of time yes.

    Potable water that is piped into your house, rather then being delivered by truck is such a case

    It is very unlikely that a secondary water company is going to build a secondary distribution network (ie pipes) to homes an neighborhoods that already have them, The costs are extremely high, for a very low profit margin item
    Water companies here are government run, so they fail the natural monopoly thing. I was refering to a business gaining a monopoly over a particular product.

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    Re: Do you believe in natural monopolies?

    Ehh yes and no.
    Depends on time and place.

    I think power generation is slowly moving away from the natural monopoly set.
    Solar and wind, along with personal restrictions on usage(aka efficiency), can eventually eliminate the power monopoly system.

    Water can also be done this way, although usage would have to be personally monitored to not outstrip supply.
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    Re: Do you believe in natural monopolies?

    Quote Originally Posted by The_Patriot View Post
    Water companies here are government run, so they fail the natural monopoly thing. I was refering to a business gaining a monopoly over a particular product.
    Oh, well no for the most part.

    Almost every single monopoly has formed because of government favoritism or privilege.
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    Re: Do you believe in natural monopolies?

    Quote Originally Posted by The_Patriot View Post
    A simple question to start a discourse.

    I do not believe in natural monopolies since they wouldn't exist in a free market. They only exist when the government regulates in favor of established businesses, which bars entry into the marketplace from newer competitors.
    Where did you get your premise that monopolies don't exist in free markets.
    And the second.. that the govt creates them.

    These are Both False premises.
    The govt Routinely Blocks anti-competitive mergers and Prevents Natural monopolies.

    It's only the existence of federal anti-trust laws that prevents the airlines, railroads, etc etc, etc, etc, from becoming large natural monopolies.
    They would be far more efficient and have more pricing power as one entity but know they can't pull it off due TO the govt.

    Google would easily eat it's remaining competition Yahoo if allowed, and even without doing so, Has a virtual monopoly. But they wouldn't even try because of existing anti-trust laws. And only because of them.
    This applies in Many industries.

    It Was the Federal govt who broke up Standard Oil into most of todays major oil companies.

    It was the Federal govt who broke up AT&T into 7 companies 25 years ago to promote competition... FROM it's Natural monopoly state.
    But now we're back down to 3 of the 7 due to natural efficiencies of scale and the more successful Naturally eating the less successful.

    So the true 'natural state' is kept in check by the govt NOT promoted by it.
    Many companies would love to eat each other but know they are not allowed.
    Last edited by mbig; 07-26-10 at 09:18 PM.
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    Re: Do you believe in natural monopolies?

    Quote Originally Posted by mbig View Post
    Where did you get your premise that monopolies don't exist in free markets.

    And the second.. that the govt creates them.

    These are Both False premises.
    The govt Routinely Blocks anti-competitive mergers and prevents Natural monopolies.

    It's only the existence of federal anti-trust laws that prevents the airlines, railroads, etc etc, etc, etc, from becoming large natural monopolies.

    Google would easily eat it's remaining competition Yahoo if allowed, and even without doing so, Has a virtual monopoly. But they wouldn't even try because of existing anti-trust laws. And only because of them.
    This applies in Many industries.

    It Was the Federal govt who broke up Standard Oil into most of todays major oil companies.

    It was the Federal govt who broke up AT&T into 7 companies 25 years ago to promote competition... FROM it's Natural monopoly state.
    But now we're back down to 3 of the 7 due to natural efficiencies of scale and the more successful Naturally eating the less successful.

    So the true 'natural state' is kept in check by the govt NOT promoted by it.
    All of the examples you gave are because of government regulation that allowed them to form in the first place. That tells me that there wouldn't be natural monopolies in a free market since the government isn't interferring.

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    Re: Do you believe in natural monopolies?

    Outside products (such as the aforementioned water and power) that are delivered via infrastructure such as wires or pipes, thus greatly limiting (unless infrastructure is publically owned, for one) service provider competition?

    I don't know.

    IF there are laws preventing the varied actions that could allow a monopoly to keep potential competitors out of the market, THEN no anti-monopoly laws would be necessary.

    Assuming, of course, that those laws were enforced in all cases.

    As to laws creating/supporting monopolies (thus, unnatural), I have no idea, but I would assume such laws would be on a more state/local level, rather than federal, outside some few. But I know nothing about any such.
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    Re: Do you believe in natural monopolies?

    Quote Originally Posted by The_Patriot View Post
    A simple question to start a discourse.

    I do not believe in natural monopolies since they wouldn't exist in a free market. They only exist when the government regulates in favor of established businesses, which bars entry into the marketplace from newer competitors.
    In the so-called free market, businesses tends to be more monopolistic and stifle competition because corporations combine together though mergers and acquisitions.

    Just look a banking, the media and the petroleum industry now from what it used to be.

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    Re: Do you believe in natural monopolies?

    Quote Originally Posted by pbrauer View Post
    In the so-called free market, businesses tends to be more monopolistic and stifle competition because corporations combine together though mergers and acquisitions.

    Just look a banking, the media and the petroleum industry now from what it used to be.
    All of the examples you've cited are like they are because of the government got involved.

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