Tag Archives: Monopolies

The Many Ways Governments Create Monopolies, by Mike Holly

Almost all effective monopolies are created, blessed, and sustained by governments. From Mike Holly at mises.org:

Politicians tend to favor authoritarianism over capitalism and monopoly over competition. They have directly created monopolies (and oligopolies) in all major industrial sectors by imposing policies favoring preferred corporations and preferred special interests.

In 2017, University economists Jan De Loecker and Jan Eeckhout found monopolies behind nearly every economic problem. They have slowed economic growth and caused recessions, financial crises and depressions. These monopolies restrict the supply of goods and services so they can inflate prices and profits while also reducing quality. In addition, monopolies have decreased wages for non-monopolists by decreasing the competition for workers. This has led to wealth disparity, underemployment, unemployment and poverty

Monopolies have also led to many societal problems. Unlike truly competitive firms, institutions that enjoy monopoly power have more freedom to discriminate against outsiders, especially women and minorities. They block innovation, the key to long-term prosperity. Monopolies have led to imperialism and wars .

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