>>A "natural" monopoly is simply a monopoly in an industry where, due to efficiencies of scale and other factors, the industry is most efficient, and consumers best off, if there is only one producer. The classic examples of a natural monopoly are the electric utility and the railroad.<<<
OK, I'll bite.
>the electric utility.
Possibly the most regulated (partly at industry request for both financial and technical reasons), and subsidy dependent industry in history, although there is lots of competition for that title. At this point we are having to break these apart to further everything from competitive pricing to alternative energy production. I have done a lot of work in this business, and mostly what I saw did not lead me to the conclusion that everyone was best served by the way it was being run. They promoted the overuse of inefficient devices to the point that we had to kill off most of the fish in the rivers with hydro, built a bunch of nuclear plants that are going to be problems for the next few thousand years, and generally had to be reined in at every juncture by the government and the voters to produce good results.
No reason to let them do what they want.
>>>the railroad
Let's see. The government created the railroads by the simple expedient of letting them take other peoples land away. To retain their local monopoly power, they instituted systems of incompatible track sizes and engine types, so that whenever you crossed into the monopoly domain of some little railroad, sometimes as small as fifty miles across, you had to unload everything from one train and put in on the other, at great expense. Government regulation was required to bring lower prices to the freight shipper because of that.
The railroads would probably still be in good health if it wasn't for the massive subsidization of the trucking industry by the government, which continues today. The shipping industry would also probably be in good shape if it weren't for regulations intended to protect unions and local ship builders. This is a great case to show that better, or less corrupt, regulation would have yielded better results for businesses and consumers, but not a good case for showing that no regulation or government planning would have been better. In that case we would have neither a functional rail system nor the interstate highway system that the truckers depend on.
Perhaps you don't remember the natural monopoly of rail being used by Rockefeller to keep all of his competitors from being able to ship their oil. If one of Rockefeller's customers or suppliers did business with a competitor, he reacted badly in a number of ways. This isn't very different from the browser case, except that old Rocky I used to have people wacked. And absolutely, the government had to step in.
I don't know if you can show that there is such a thing as a natural monopoly that the government shouldn't take over, regulate tightly, or break up. I don't know how you can show that natural monopolies are good. Perhaps you could produce an example of a lasting, critical, natural monopoly that has been safe in private hands? For instance, concentrated private ownership of all the land. Or water, or highways, or food distribution, or energy. These have all been tried with disastrous results.
Now computing and medicine and flight and trading of capital assets and other technologies have assumed as critical a position in the economy and survival infrastructure and international competition as basic resources. If this is done poorly due to the shortsightedness of a few billionaires trying to scratch up another billion or three, we will all end up completely screwed.
I think we should all pay close attention, at least, as does everyone else that is a regular here, apparently.
The software business is the only business I know of that has gotten the government to make it's products exceptions to consumer protection and truth in advertising and fraud laws, yet the backers of the various companies still whine about *too much* government interference. This when half the products shipped won't do what the advertising and the box back text says they do. Show me how this is benefitting the consumer.
Cheers,
Chaz
(P.S. To Dan: No, not a commie, nor a libertarian, nor a conservative or liberal. Been there, done that, and we need to move beyond labels and ideology to real thought. If we could get that started, maybe there would be a reason for most people (who won't vote) to start voting again.) |
