In the late XIX century, during second industrial revolution, there was a general opinion that government’s intervention and not a free market economy leeds to monopoly. It was very true statement because permanent and harmful monopoly is caused by prices control, regulations, exclusive contracts, tender rigging, tariffs, government guarantees, tax reliefs for chosen people, grants, guaranteed loans, certificates, permissions, licences, or resources’ nationalization. All of those above are examples of interference into free market economy, by which governments can give a favour to one organisation at the expense of the other one. In Poland good example of monopoly is social security. Everyone is obliged to pay contributions. Theoretically we can choose other way of saving for our retirement but it is just additional way and we still have to pay to social security. Let’s imagine that we had free market economy in Poland. Would we choose government social security as a guarantee of our wealth during retirement? Probably some people would, but definitely the organisation wouldn’t be a monopolist.
In the free market economy there is no way that permanent and harmful for customers monopoly can exist. I invite you to take part in our survey at our website econclips.com. If you don’t want to miss our next videos, subscribe to our channel on YouTube and like us on Facebook.
You can listen to Murray Rothbard’s speech about cartels on free market.