Monopolies, Antitrust:
“The alleged purpose of the Antitrust laws was to protect competition; that purpose was based on the socialistic fallacy that a free, unregulated market will inevitably lead to the establishment of coercive monopolies. But, in fact, no coercive monopoly has ever been or ever can be established by means of free trade on a free market. Every coercive monopoly was created by government intervention into the economy: by special privileges, such as franchises or subsidies, which closed the entry of competitors into a given field, by legislative action. (For a full demonstration of this fact, I refer you to the works of the best economists.)”
“Antitrust: The Rule of Unreason,” The objectivist Newsletter, Feb. 1952, 5
“A “coercive monopoly” is a business concern that can set its prices and production policies independent of the market, with immunity from competition, from the law of supply and demand. An economy dominated by such monopolies would be rigid and stagnant.
The necessary precondition of a coercive monopoly is closed entry—the barring of all competing producers from a given field. This can be accomplished only by an act of government intervention, in the form of special regulations, subsidies, or franchises. Without government assistance, it is impossible for a would-be monopolist to set and maintain his prices and production policies independent of the rest of the economy. For if he attempted to set his prices and production at a level that would yield profits to new entrants significantly above those available in other fields, competitors would be sure to invade his industry.”
“Antitrust,” Capitalism; The unknown Ideal, 68
“The difference between political power and any other kind of social “power,” between a government and any private organization, is the fact that a government holds a legal monopoly on the use of physical force. This distinction is so important and so seldom recognized today that I must urge you to keep it in mind. Let me repeat it: a government holds a legal monopoly on the use of physical force.
No individual or private group or private organization has the legal power to initiate the use of physical force against other individuals or groups and to compel them to act against their own voluntary choice. Only a government holds that power. The nature of governmental action is: *coercive *action. The nature of political power is: the power to force obedience under threat of physical injury—the threat of property expropriation, imprisonment, or death.”
“America’s Persecuted Minority: Big Business,”
Capitalism: The Unknown Ideal, 46
So the real villains (The only monopolies to abhor) are the coercive monopolies, i.e. the entities which you have no choice in evading. You can evade even the utility companies if you go off grid, but you can never fully evade the tax man. The government is the only legitimately coercive entity you can not avoid since they are the only entity sanctioned with the right to exert force… They are capable of protecting and creating monopolies. In a free market they would be unable to do so. We have come closer in our history to free market principles than any other nation, but we have only moved further away as time and special interest have elected pawns to government.
Respectfully,
O.A.

I'm very pro monopoly, and I think you have a very narrow view of their potential. Thank you for your post by the way, I just read a very long article on Rockefeller to brush up on my stance and I wouldn't have read it if I didn't want to argue with you :)

In any case you say that monopolies are bad for consumers, because it allows the business to raise prices without worry of being undercut by competition presumably? I don't like to assume. But in most cases you can't fully eliminate competition, it will always exist. Anyone is free to start a competing business at any moment.

You also have to consider that the reason any company gets to monopoly status is because they were the most efficient, the most productive. I'm sure you can argue that so I look forward to your response. But if it's true and they are the most productive, that means they are able to put an item on the market at a price set by demand, not based on what everyone else sells it for.

Monopolies also have the spare capital to invest in research and development, and to try new technologies that if a smaller company gambled on and failed would ruin it.

So maybe we can discuss the concept of a monopoly based in a rights respecting government and you can explain to me the negative consequences.

Originally the power companies made their own local distribution network, government stepped in after and took control. And I have to disagree, Government control is basically bad. The perfect world for people in Government is where they provide a service that is poorly run yet cost's a fortune to run. This way they will constantly need to tax more to 'fix' the service but never get rid of it because that would prevent them from needing more money.

Much has already been written about monopolies. To discuss them, you need to be conversant with the substantive literature. In _Capitalism: the Unknown Ideal_ by Ayn Rand, et al., Alan Greenspan explains the problems with anti-trust laws. That is the foundation for Nathaniel Branden's "Common Fallacies About Capitalism" in the next chapter, which begins with Monopolies. _Human Action_ has about 20 citations to monopolies including patents and copyrights, as well as incomplete monopolies and state monopolies. Mises is more technical and less moralistic. He notes that the general market is superior (stronger than) a monopoly which means that individual consumers will make choices that may be incompatible with the monopoly: they will find alternatives if the monopoly does not meet their needs.

Goto the Foundation for Economic Education (http://www.fee.org/), put "monopoly" in the search box and read to your heart's content.

Just to take one example from Rozar: "Monopolies also have the spare capital to invest in research and development, and to try new technologies that if a smaller company gambled on and failed would ruin it."

The empirical history of monopolies flatly contradicts this. I challenge Rozar to show an example - and more than one exception of an example, at that, considering the overwhelming facts against his claim. Consider:

Bell took his telephone to Western Telegraph which had no interest in it.

Marconi took his radio to AT&T which had no interest in it.

Xerox did not see the value in the personal computer or the GUI -- even though their own PARC developed both!

IBM did nothing in the personal computer industry and its PC was "successful" because it was open source and off the shelf: common knowledge. It advanced NOTHING. However -- most people do not know that IBM actually did have a "desktop computer" in 1977: the IBM 5100 with built in CRT and tape drive had both Basic and APL in ROM. What happened? Well, they marketed it to secretaries who they thought would write word processing programs in APL, apparently... Fail!

The entire story of Silicon Valley is one of entrepreneurs, inventors, innovators LEAVING any kind of over-structured, over-organized corporation and going out on their own with ideas that those firms typically rejected. Shockley Semiconductor led to Fairchild and then to the "Fairchildren." TWENTY major corporations rejected the sales pitch for Fairchild. (See "Something Ventured" under Business about two weeks back.)

The only reason that we have cellphone now is that in 1984 the Modified Final Judgment disbanded the Bell monopoly. I have a Scientific American here from like 1952 with an ad for an answering machine. Who had one? In the 1960s on television, detective Mannix had a "car phone" but who else had one? Fax machines? Sure the newspapers used "wire photos" but where was fax? Time and time again, the monopoly just FAILED to market what it actually had because it had no incentive to do more.

Yes, a MARKET MONOPOLY like Rearden Metal or Standard Oil (in real life) can succeed by being first and maintaining the lead it established. But has been pointed out time and again: steel competes with plastic. Not in all things: plastic bridges await the future. But overall, any market monopoly and even a so-called "natural" monopoly faces invisible competition.

The problem with city-owned and government-regulated utilities such as electricity and natural gas is that they stifle innovation. You can transmit energy many ways. The power companies ran cables overhead, then the cities mandated underground for aesthetics, but underground was always possible from the first.
The argument from "economies of scale" may not be solid, but only a spurious analogy. Consider the Volvo: for many years - one man; one car. So-called "public" utilities were only one solution... and perhaps not the best answer.