I wanted to follow up on my last post about monopolies as it has generated a good bit of interest. By general definition a monopoly is a product or service where there are no suitable alternatives. Depending how you consider the vague term “suitable alternatives” everything could be a monopoly or nothing could be considered a monopoly.
For instance as I sit here in Starbucks I have a monopoly on the chair I sit on. Granted there are other seats available, but none that provide the exact view I have, the exact flow from the air conditioner, or the exact proximity to other customers.
In reality it is silly to say I have a monopoly because almost all other coffee drinkers would be fine with a different seat. But what about the customer that absolutely must have the seat I am in? To them I have, without a doubt, a monopoly.
With that in mind it is ridiculous for the government to decide what is and is not a monopoly because all consumers have a choice.
I challenge one reader to name a product or service that one wants to acquire (without force) that they have no alternatives. Any item you mention I can remind you that the buyer can simply elect not to purchase the good.
We must look at the motives of why individuals, companies, or governments would accuse others of monopolistic practices.
To start you need to follow the money trail. Ultimately the accuser is most likely a competitor that cannot compete on the free market and must use government intervention to gain an advantage (or prevent a disadvantage). A recent example is the proposed merger between AT&T and T-Mobile when Sprint claimed harm to the consumer.
If Sprint was truly a believer that competition is good for the consumer they would spend more time lobbying against regulations which create a barrier of entry into the cell phone market. However, that’s not how they invest their money.
Going back to the Microsoft monopoly accusations you will see the consumer had plenty of alternatives for Microsoft’s products. In the marketplace the consumer was determining through their actions that Microsoft’s software was a better solution to the alternative. Whether it meant they had a lower learning curve by upgrading the OS rather than switching to Linux or Mac or that Internet Explorer provided a good enough experience that it was not worth their time to search out and download Netscape.
Ultimately in the free market there exists no monopolies. The only examples of monopolies are in governments where the tool of compliance is force. With the exception of leaving the country there are no alternatives to the Supreme Courts, Federal Reserve Board, Congress, the military, or many other government programs. If you choose not to purchase those services than you risk losing your freedom. That my friends is the only way you can achieve a monopoly.
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