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this post was submitted on 23 Aug 2023
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Monopolies are pretty dangerous, and I'd like to avoid then as much as possible.
I think that they're generally created and sustained by government intervention though. Bailouts, legal fees, red tape, price controls, exceedingly long copyrights, they all hurt new competitors more than established ones.
If one company decided that the average bread should cost 50 bucks then I'm going to buy someone else's bread and that company loses a lot of money.
If every company decided that the average bread should cost 50 bucks, that's an extraordinary opportunity for a new competitor to come in with reasonable prices.
One valid use of government power is punishing people who murder, and I'm not exactly sure what power cartels have outside of that.
I googled it and the Wikipedia page said they're inherently unstable, but I don't know how reliable that is.
In any case, I don't see how my second example isn't a cartel itself. All the bread companies are colluding to set the price of bread artificially high. The problem is there isn't much to stop new competitors (or to stop members defecting).
You should read Lenin's "Imperialism, the highest stage of capitalism", you're like 2 steps from it, just in this moment you try to turn back the clock instead of looking forward.