(March 14, 2010 at 1:57 pm)Tiberius Wrote: My point about monopolies was that they can be good. Sure, not all of them will be, and I think Microsoft are a good example of that, but that doesn't stop Dyson from having a monopoly on vacuum cleaners (in the UK at least) and still being an innovative and consumer-friendly company.
The reason I didn't pick Microsoft as an example of a "good" monopoly is twofold:
1) I suspected people would argue that they aren't technically a monopoly, since there are other Operating Systems (although I think they do have 90% of the market).
2) I do not regard them as an example of a "good" monopoly. They have used anti-free market tactics in order to get where they are; namely the forced install of Windows onto computers and laptops. There are few computer companies where you can request a computer without Windows pre-installed on it, although I am glad that this number is increasing (and Dell have done the whole Linux laptop thing).
Arguably socialism also creates a monopoly (the state). I think though economists would say rational calculation is impeded by a monopoly (just as it becomes impossible in a socialist state, because calculation requires the markets setting prices, monopolies are able to manipulate their own prices, and therefore act to skew market pricing).
Rational calculation involves the ability to understand demand, allocate resources, etc. The more market participants there are, the better the market is able to respond to demand and allocate resources to meet it. I'm not an economist so I really can't elaborate beyond that (and I'm pretty sure there's good arguments both ways, I have a few friends who are economists and I know they disagree on this issue; but I'm a lawyer not an economist ... although it's a very interesting topic).
I'm on the side generally against the idea of monopolies (but I imagine it might be a more efficient framework under certain "rare" circumstances).
