Wednesday, August 8, 2018

Monopolies and Government

Brill: In guerilla warfare, you try to use your weaknesses as strengths.
Robert Clayton Dean: Such as?
Brill: Well, if they're big and you're small, then you're mobile and they're slow. You're hidden and they're exposed.
--Enemy of the State

Point made in these tweets has been made on these pages as well.
In unhampered markets, monopolies cannot exist for long. If a producer acquires a monopoly position, the smell of profits will entice entry into the industry. The monopolist's advantage will subsequently be competed away.

Monopolies can only persist with the help of government force. Regulation could raise entry barriers that keep entrepreneurs out and protect the monopolist's franchise. Government could also issue edicts that explicitly prohibit production by anyone other than the monopolist.

History suggests that government is a monopolist's best friend.

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