Naturally Occuring Monopolies

[Anti-Villain]

So can monopolies occur naturally in a unregulated free market society?

Austrian economists and libertarians say no. They claim monopolies can only form when governments interfere. In the free market society, the ever existing presence of competition will never allow individuals or enterprises to transform into monopolies(please correct me if I'm mistaken.)

There are other theories of monopoly, but I believe the Austrian theory is the only one worth mentioning here since it's quite questionable, at least to mainstream economists(of the neoclassical school) and it's the only theory, at least to my knowledge, that claims monopolies will never occur without state intervention.

So what do ya'll think?

[Schrödinger's Cat]

Yes. Plenty, actually:

1.) Land, or more precisely - space. You can't create more of it.
2.) Most roads. Sometimes there may be an oligopoly, but commuters and neighborhoods are severely limited. Furthermore, even if competition doest exist it's so limited that there isn't much of a rat race to please the consumers. In my own town we have some private roads, and they are absolutely atrocious.
3.) Major infrastructure, like dams.

Strict oligopolies are actually a worse problem, since sensible people don't believe in privatizing any of the above (okay - well - a lot of people believe in privatizing land, but they usually don't think about it). Thanks to the wonderful work of incorporation, economic rent, and some subsidization, a lot of markets have two or three main competitors and a field of very, very, very small guys. Box stores? Wal-Mart, Target, and the flailing K-Mart. Phone providers? I can count them on one hand. Same for food retailers, or technology retailers, or soft drink manufacturers. Microsoft and Apple have 99% market share in OS.

Most markets, without large government intervention, would be better for allocating resources. I don't see that as a problem, so long as we realize private property is just as authoritarian as the state. Land should be exchanged through use rights, not ownership, and private contracts that socialize risk for private firms should be abolished. Patents shouldn't exist, and I'm very skeptical about copyrights - at the very least they should die with the author. None of this bullshit about paying Disney a fortune just to use Mickey Mouse almost one hundred years after the fact.

I'm okay with a market that abides by the theories put forward by Tucker and Proudhon, in other words. Austrian schoolers can be very idealist: they defer everything to the market. I bet if you compared their internet demographic to ours, they would be younger.

[RGacky3]

A quick look at economic history would undo that theory in a second.

[Michael2]

1.) Land, or more precisely - space. You can't create more of it.


There's limited needs.
And theres unlimited wants.

And in japan, they do make more land to build stuff because they don't have enough land.

[Schrödinger's Cat]

And theres unlimited wants.

That's complete bullshit. People don't hoard leaves. They don't walk out of a buffet with a car full of food. The super rich have the means of purchasing plots of land the size of Rhode Island, but they don't. Anyone with unlimited wants is either dreaming of same fanciful fantasy world, or an abnormality.


And in japan, they do make more land to build stuff because they don't have enough land.

You can't "make more land." You can transfer substances to make something more habitable, but matter is relatively stagnant.

[Kwisatz Haderach]

In the free market society, the ever existing presence of competition...
There is no reason to expect that competition would be "ever present" in a free market society. Competition doesn't just come out of thin air. It only appears if people want to compete.

And in some cases, companies can grow so powerful that no one would ever want to compete with them - it just wouldn't be worth the effort. That's how monopolies can form in a free market society.

Of course, then there are also many cases where competition is made physically impossible by material constraints. If one company owns all the land in an area, for example, you can't compete with it because you can't make your own land.