Thursday, February 24, 2011

Monopoly: A Nice Trick If You Can Do It

One question that’s frequently raised about market anarchism: How would you prevent the economy from being taken over by monopolies, if we didn’t have anti-trust regulations and other restrictions on corporate abuses of power? Without anti-trust laws, the firms in an oligopoly or cartel could simply lower prices when a competitor tried to enter the market, and then raise them again when the competitor went out of business.

Oligopoly firms could also, it’s argued, use their market power to restrict competition in other ways, like making exclusivity contracts to prevent a would-be entrant to the same industry from obtaining the suppliers and outlets it needed to function.

The problem with this argument is that it assumes a great deal of what it needs to prove.

Read the rest of Kevin Carson's article

James Tuttle,
Regular Columnist, THL
Articles | Author's Page | Website