Monopoly Economics Quotes

State ownership! It leads only to absurd and monstrous conclusions; state ownership means state monopoly, concentrated in the hands of one party and its adherents, and that state brings only ruin and bankruptcy to all.

Seeds have the power to preserve species, to enhance cultural as well as genetic diversity, to counter economic monopoly and to check the advance of conformity on all its many fronts.

Saying that you are moral because you believe in a god is like saying you are an economist because you play monopoly.

It is one of the saddest spectacles of our time to see a great democratic movement support a policy which must lead to the destruction of democracy and which meanwhile can benefit only a minority of the masses who support it. Yet it is this support from the Left of the tendencies toward monopoly which make them so irresistible and the prospects of the future so dark.

And yet even among the friends of liberty, many people are deceived into believing that government can make them safe from all harm, provide fairly distributed economic security, and improve individual moral behavior. If the government is granted a monopoly on the use of force to achieve these goals, history shows that power is always abused. Every single time.

War has been the necessary and inevitable consequence of the establishment of a monopoly on security.

The time, then, had come for him to poison himself so that an economic monopoly could be kept alive, a sprawling, interplan empire from which he now derived nothing.

When industries lack competition, businesses get belligerent. Competition helps keep businesses humble.

In particular, the State has arrogated to itself a compulsory monopoly over police and military services, the provision of law, judicial decision-making, the mint and the power to create money, unused land ("the public domain"), streets and highways, rivers and coastal waters, and the means of delivering mail...the State relies on control of the levers of propaganda to persuade its subjects to obey or even exalt their rulers.

The government enforces a monopoly over the production and distribution of its alleged 'services' and brings violence to bear against would-be competitors. In so doing, it reveals the fraud at the heart of its impudent claims and gives sufficient proof that it is not a genuine protector, but a mere protection racket.

If I right now decided that I wanted to play Monopoly with you, and for 400 rounds of playing Monopoly, I didn’t allow you to have any money, I didn’t allow you to have anything on the board, I didn’t allow for you to have anything, and then we played another 50 rounds of Monopoly and everything that you gained and you earned while you were playing that round of Monopoly was taken from you, that was Tulsa. That was Rosewood. Those are places where we built black economic wealth, where we were self-sufficient, where we owned our stores, where we owned our property, and they burned them to the ground.

Copyright: a system of monopoly privilege over the expression of ideas that enables government to stop consumer-friendly economic development and reward uncompetitive and legally privileged elites to fleece the public through surreptitious use of coercion.

It is, perhaps, impossible to proportion exactly the price of labor to the profits it produces; and it will also be said, as an apology for the injustice, that were a workman to receive an increase of wages daily he would not save it against old age, nor be much better for it in the interim.

I watched with incredulity as businessmen ran to the government in every crisis, whining for handouts or protection from the very competition that has made this system so productive. I saw Texas ranchers, hit by drought, demanding government-guaranteed loans; giant milk cooperatives lobbying for higher price supports; major airlines fighting deregulation to preserve their monopoly status; giant companies like Lockheed seeking federal assistance to rescue them from sheer inefficiency; bankers, like David Rockefeller, demanding government bailouts to protect them from their ill-conceived investments; network executives, like William Paley of CBS, fighting to preserve regulatory restrictions and to block the emergence of competitive cable and pay TV. And always, such gentlemen proclaimed their devotion to free enterprise and their opposition to the arbitrary intervention into our economic life by the state. Except, of course, for their own case, which was always unique and which was justified by their immense concern for the public interest.

The more highly competitive the market for labor and for the employer’s products, the higher the cost paid for discrimination and consequently the less leeway the employer has for indulging his prejudices without risking his own profits and ultimately the financial survival of the business. On the other hand, enterprises not subject to the full stress of a competitive market—monopolies, non-profit enterprises, government agencies—have greater leeway.

It's WW2 and there are wage controls in place. Instead of health care, companies decide to offer employees shoes. Having absorbed those costs, they later lobby for every company to be required to offer shoes. That calls forth regulation and monopolization of the shoe industry. Shoes are heavily subsidized. Every shoe must be approved. Producers must be domestic. They must adhere to a certain quality. They can't discriminate based on foot size or individual need. Prices rise, and some people lack shoes, so the Affordable Shoe Act forces everyone to buy into an official shoe plan or pay a fee. Here we have a perfect plan for making shoes egregiously expensive. The entire country would be consumed with the fear of being shoeless if they lose their job. The left wing calls for a single shoe provider to offer universal shoes and the right wing meekly suggests that shoe makers be permitted to sell across state lines. Meanwhile, libertarians suggest that we just forget the whole thing and let the market make and deliver shoes of every quality to anyone from anyone. Everyone screams that this is an insane and dangerous idea.

We must not tolerate oppressive government or industrial oligarchy in the form of monopolies and cartels.

As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully constrained creatures of the law and the servants of the people, are fast becoming the people's masters.

When it has been proposed to lay any new tax upon sugar, our sugar planters have frequently complained that the whole weight of such taxes fell, not upon the consumer, but upon the producer, they never having been able to raise the price of their sugar after the tax higher than it was before. The price had, it seems, before the tax been a monopoly price, and the argument adduced to show that sugar was an improper subject of taxation demonstrated, perhaps, that it was a proper one, the gains of monopolists, whenever they can be come at, being certainly of all subjects the most proper.

We wish to break with all aspects of the liberal State: with its welfare and its warfare, its monopoly privileges and its egalitarianism, its repression of victimless crimes whether personal or economic. Only we offer technology without technocracy, growth without pollution, liberty without chaos, law without tyranny, the defense of property rights in one’s person and in one’s material possessions.

The church has no corner, no monopoly on work for the poor and for the elimination of economic and political injustice. The work of charity is ecumenical and universal both in its scope and its workers.

If you take away the state’s monopoly over the means of economic interaction, then you take away one of the three principal ingredients of the state. In the model of the state as a mafia, where the state is a protection racket, the state shakes people down for money in every possible way. Controlling currency flows is important for revenue-raising by the state, but it is also important for simply controlling what people do...

I use “anticapitalist” because conservative defenders of capitalism regularly say their liberal and socialist opponents are against capitalism. They say efforts to provide a safety net for all people are “anticapitalist.” They say attempts to prevent monopolies are “anticapitalist.” They say efforts that strengthen weak unions and weaken exploitative owners are “anticapitalist.” They say plans to normalize worker ownership and regulations protecting consumers, workers, and environments from big business are “anticapitalist.” They say laws taxing the richest more than the middle class, redistributing pilfered wealth, and guaranteeing basic incomes are “anticapitalist.” They say wars to end poverty are “anticapitalist.” They say campaigns to remove the profit motive from essential life sectors like education, healthcare, utilities, mass media, and incarceration are “anticapitalist.” In doing so, these conservative defenders are defining capitalism. They define capitalism as the freedom to exploit people into economic ruin; the freedom to assassinate unions; the freedom to prey on unprotected consumers, workers, and environments; the freedom to value quarterly profits over climate change; the freedom to undermine small businesses and cushion corporations; the freedom from competition; the freedom not to pay taxes; the freedom to heave the tax burden onto the middle and lower classes; the freedom to commodify everything and everyone; the freedom to keep poor people poor and middle-income people struggling to stay middle income, and make rich people richer. The history of capitalism—of world warring, classing, slave trading, enslaving, colonizing, depressing wages, and dispossessing land and labor and resources and rights—bears out the conservative definition of capitalism.

The Industrial Revolution started and made its biggest strides in England because of her uniquely inclusive economic institutions. These in turn were built on foundations laid by the inclusive political institutions brought about by the Glorious Revolution. It was the Glorious Revolution that strengthened and rationalized property rights, improved financial markets, undermined state-sanctioned monopolies in foreign trade, and removed the barriers to the expansion of industry. It was the Glorious Revolution that made the political system open and responsive to the economic needs and aspirations of society. These inclusive economic institutions gave men of talent and vision such as James Watt the opportunity and incentive to develop their skills and ideas and influence the system in ways that benefited them and the nation. Naturally these men, once they had become successful, had the same urges as any other person. They wanted to block others from entering their businesses and competing against them and feared the process of creative destruction that might put them out of business, as they had previously bankrupted others.

Substitution competition is a natural limit or control on prices. In a permaculture economy, every useful product or service in a market coexists with a variety of substitutes. There is a point to which monopolies become uneconomical/ unprofitable. Almost every product or service, or their inputs, may be used for a variety of purposes by a variety of consumers, If the price (a) causes there to be more or less consumption of (b) then a and b are substitutes. Substitution competition eventually causes monopolies to shrink or fail , or creates new market space which renders the previous monopoly relatively smaller in size and therefore not a monopoly in the context of the expanded economy

Monopoly is a market, or part of a market, reserved to the exclusive possession of one or more sellers by means of the initiation of physical force by the government, or with the sanction of the government. Monopoly exists insofar as the freedom of competition is violated, with the freedom of competition being understood as the absence of the initiation of physical force as the preventive of competition. Where there is no initiation of physical force to violate the freedom of competition, there is no monopoly. The freedom of competition is violated only insofar as individuals are excluded from markets or parts of markets by means of the initiation of physical force. Monopoly is thus a market or part of a market reserved to the exclusive possession of one or more sellers by means of the initiation of physical force. It is thus something imposed upon the market from without—by the government. (Private individuals—gangsters—can initiate force to reserve markets only if the government allows it and thereby sanctions it.) Thus, monopoly is not something which emerges from the normal operation of the economic system, and which the government must control.

The Internet breaks a 500-year Latin American pattern of monopoly, monopoly of information, economics, social, religious power. It fundamentally gives power to the individual, which is a new development in Latin America. —FERNANDO ESPUELAS

In the real world outside economic theory, every business is successful exactly to the extent that it does something others cannot. Monopoly is therefore not a pathology or an exception. Monopoly is the condition of every successful business.

One of the many signs of verbal virtuosity among intellectuals is the repackaging of words to mean things that are not only different from, but sometimes the direct opposite of, their original meanings. 'Freedom' and 'power' are among the most common of these repackaged words. The basic concept of freedom as not being subjected to other people's restrictions, and of power as the ability to restrict other people's options have both been stood on their heads in some of the repackaging of these words by intellectuals discussing economic issues. Thus business enterprises who expand the public's options, either quantitatively (through lower prices) or qualitatively (through better products) are often spoken of as 'controlling' the market, whenever this results in a high percentage of consumers choosing to purchase their particular products rather than the competing products of other enterprises. In other words, when consumers decide that particular brands of products are either cheaper or better than competing brands of those products, third parties take it upon themselves to depict those who produced these particular brands as having exercised 'power' or 'control.' If, at a given time, three-quarters of the consumers prefer to buy the Acme brand of widgets to any other brand, then Acme Inc. will be said to 'control' three-quarters of the market, even though consumers control 100 percent of the market, since they can switch to another brand of widgets tomorrow if someone else comes up with a better widget, or stop buying widgets altogether if a new product comes along that makes widgets obsolete. ....by saying that businesses have 'power' because they have 'control' of their markets, this verbal virtuosity opens the way to saying that government needs to exercise its 'countervailing power' (John Kenneth Galbraith's phrase) in order to protect the public. Despite the verbal parallels, government power is in fact power, since individuals do not have a free choice as to whether or not to obey government laws and regulations, while consumers are free to ignore the products marketed by even the biggest and supposedly most 'powerful' corporations in the world.

In contrast to Ricardo’s expectation that banking would retain its early focus on international commerce — and hence,on industrial capital formation to provide foreign markets with British exports in exchange for raw materials — banking has found real estate to be the key, along with its traditional market in creating monopolies and trusts. Some 80% of bank loans in the United States and Britain are mortgages, and consequently they account for 70% of the economy’s interest payments.

Although the view that, once discovered, ideas can be imitated for free by anybody is pervasive, it is far from the truth. While it may occasionally be the case that an idea is acquired at no cost—ideas are generally difficult to communicate, and the resources for doing so are limited. It is rather ironic that a group of economists, who are also college professors and earn a substantial living teaching old ideas because their transmission is neither simple nor cheap, would argue otherwise in their scientific work. Most of the times imitation requires effort and, what is more important, imitation requires purchasing either some products or some teaching services from the original innovator, meaning that most spillovers are priced.

Yet, though all the changes we are observing tend in the direction of a comprehensive central direction of economic activity, the universal struggle against competition promises to produce in the first instance something in many respects even worse, a state of affairs which can satisfy neither planners nor liberals: a sort of syndicalist or "corporative" organization of industry, in which competition is more or less suppressed but planning is left in the hands of the independent monopolies of the separate industries. This is the inevitable first result of a situation in which the people are united in their hostility to competition but agree on little else. By destroying competition in industry after industry, this policy puts the consumer at the mercy of the joint monopolist action of capitalists and workers in the best organized industries.

It is an obvious fact that the banks and big monopolies are now dependent on the state for their survival. As soon as they were in difficulties, the same people who used to insist that the state must play no role in the economy, ran to the government with their hands out, demanding huge sums of money. And the government immediately gave them a blank cheque. Trillions of pounds of public money has been handed over to the banks, totalling some $14 trillion. But the crisis continues to deepen. All that has been achieved in the last four years is to transform what was a black hole in the finances of the banks into a black hole in public finances. In order to save the bankers, everybody is expected to sacrifice, but for the bankers and capitalists no sacrifices are demanded. They pay themselves lavish bonuses with the money of the taxpayer. This is Robin Hood in reverse.

Surprising as it may seem today, classical ideas of creating a free market were to be achieved by “socialist” reforms. Their common aim was to protect populations from having to pay prices that included a non-labor rent or financial tax to pay landlords and natural resource owners, monopolists and bondholders. The vested interests railed against public regulation and taxation along these lines. They opposed public ownership or even the taxation of land, natural monopolies and banking. They wanted to collect rent and interest, not make land, banking and infrastructure monopolies public in character.

The opportunities for political and economic entrepreneurs are still a mixed bag, but they overwhelmingly favor activities that promote redistributive rather than productive activity, that create monopolies rather than competitive conditions, and that restrict opportunities rather than expand them. They

History, practical experience, common sense and economic theory all agree: economic competition is probably one of the greatest ideas humans ever came up with. When people compete to achieve the same goal, great things seem to happen that otherwise would not. Things get done faster, cheaper, and better; new methods for lifting a weight or quenching a thirst are invented; the average guy ends up with more of the stuff he likes at a lower price than before. That is why, in the end, socialism collapsed like a rotten wall: it did not allow its people to compete and, as a result, it not only made their economic life miserable, but strangled their hearts and souls.

Market fundamentalism is a harsh accusation. Christian fundamentalists are notorious for their strict biblical literalism, their unlimited willingness to ignore or twist the facts of geology and biology to match their prejudices. For the analogy to be apt, the typical economist would have to believe in the superiority of markets virtually without exception, regardless of the evidence, and dissenters would have to fear excommunication. From this standpoint, the charge of “market fundamentalism” is silly, failing even as a caricature. If you ask the typical economist to name areas where markets work poorly, he gives you a list on the spot: Public goods, externalities, monopoly, imperfect information, and so on. More importantly, almost everything on the list can be traced back to other economists. Market failure is not a concept that has been forced upon a reluctant economics profession from the outside. It is an internal outgrowth of economists’ self-criticism. After stating that markets usually work well, economists feel an urge to identify important counterexamples. Far from facing excommunication for sin against the sanctity of the market, discoverers of novel market failures reap professional rewards. Flip through the leading journals. A high fraction of their articles present theoretical or empirical evidence of market failure.

The same reasons apply to unions. Industry-wide price-fixing causes economic dislocations? So does industry-wide wage-fixing. A wage that is appropriate in one part of the country may not be in another area where economic conditions are very different. Corporate monopolies impair the operation of the free market, and thus injure the consuming public. So do union monopolies.

Honesty requires that we each recognize the need to limit procreation, consumption, and waste, but equally we must radically reduce our expectations that machines will do our work for us or that therapists can make us learned or healthy. The only solution to the environmental crisis is the shared insight of people that they would be happier if they could work together and care for each other. Such an inversion of the current world view requires intellectual courage for it exposes us to the unenlightened yet painful criticism of being not only anti-people and against economic progress, but equally against liberal education and scientific and technological advance. We must face the fact that the imbalance between man and the environment is just one of several mutually reinforcing stresses, each distorting the balance of life in a different dimension. In this view, overpopulation is the result of a distortion in the balance of learning, dependence on affluence is the result of a radical monopoly of institutional over personal values, and faulty technology is inexorably consequent upon a transformation of means into ends

While there are certainly informational spillovers as ideas move from person to person, it is hard to see why in most instances they are not priced. Although it is possible to imagine examples such as the wheelbarrow where an idea cannot be used without revealing the secret, relatively few ideas are of this type. For copyrightable creations such as books, music, plays, movies and art, unpriced spillovers obviously play little role. A book, a CD or a work of art must be purchased before it can be used, and the creator is free to make use of his creation in the privacy of his home without revealing the secret to the public at large. Similarly with movies or plays. In all cases, the creation must effectively be purchased before the “secret” is revealed.

However appealing it may be in theory, the benevolent design of Nature rarely works out in practice, requiring intellectual acrobatics on the part of those who invoke it. [Adam] Smith recognizes that a healthy economic circulatory system depends on some government interference. Complete freedom leads to monopolies, giving manufacturers outsize power over prices and politicians, which works to the detriment of the body politic. How to account for monopolies while maintaining an ideal of naturalness? Just call them unnatural. Monopolists, writes Smith, are guilty of selling their commodities "much above the natural price." To regulate them is to force them into accordance with nature—even though monopolies themselves naturally emerge in unregulated economies.

or creed.” These rights included: The right to a useful and remunerative job in the industries or shops or farms or mines of the nation; The right to earn enough to provide adequate food and clothing and recreation; The right of every farmer to raise and sell his products at a return which will give him and his family a decent living; The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad; The right of every family to a decent home; The right to adequate medical care and the opportunity to achieve and enjoy good health; The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment; The right to a good education. Roosevelt

Google’s enviable position as the monopoly leader in the provision of information has allowed its organization of information and customization to be driven by its economic imperatives and has influenced broad swaths of society to see it as the creator and keeper of information culture online, which I am arguing is another form of American imperialism that manifests itself as a “gatekeeper”18 on the web.

Today the message most commentators take from Adam Smith is that government should get out of the way. But that was not Smith’s message. He was enthusiastic about government regulation so long as it wasn’t simply a ruse to advantage one set of commercial interests over another. When “regulation . . . is in favor of the workmen,” he wrote in The Wealth of Nations, “it is always just and equitable.” He was equally enthusiastic about the taxes needed to fund effective governance. “Every tax,” he wrote, “is to the person who pays it a badge, not of slavery but of liberty.”9 Contemporary libertarians who invoke Smith before decrying labor laws or comparing taxation to theft seem to have skipped these passages. Far from a tribune of unregulated markets, Smith was a celebrant of effective governance. His biggest concern about the state wasn’t that it would be overbearing but that it would be overly beholden to narrow private interests. His greatest ire was reserved not for public officials but for powerful merchants who combined to rig public policies and repress private wages. These “tribes of monopoly” he compared with an “overgrown standing army” that had “become formidable to the government, and upon many occasions intimidate the legislature.” Too often, Smith maintained, concentrated economic power skewed the crafting of government policy. “Whenever the legislature attempts to regulate the differences between masters and their workmen,” he complained, “its counsellors are always the masters. . . . They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”10

What the complacent Russians forgot was that their strengths – above all, their technological superiority – were not a permanent monopoly conferred by Providence on people with white skin. There was in fact nothing biological to prevent Asians from adopting Western forms of economic and political organization, nor from replicating Western inventions. The first Asian country to work out how to do so was Japan.

Because they have their strategy-the strategy of laissez­ faire; the strategy of individual versus collective effort, of appealing to that little bit of selfishness that exists in each person to beat out the rest. They appeal to that petty superiority complex that every­ one possesses that makes one think they are better than everybody else. The monopolies instill in individuals, from childhood on, the view that since you are better and work harder, that it is in your interest to struggle individually against everyone else, to defeat ev­eryone else and become an exploiter yourself. The monopolies go to great lengths to prove that collective ef­fort enslaves and prevents the smarter and more capable from get­ting ahead. As if the people were made up simply of individuals, some more intelligent, some more capable. As if the people were something other than a great mass of wills and hearts that all have more or less the same capacity for work, the same spirit of sacrifice, and the same intelligence. They go to the undifferentiated masses and try to sow divisions: between blacks and whites, more capable and less capable, literate and illiterate. They then subdivide people even more, until they single out the individual and make the individual the center of so­ciety.

The creative destruction that would be wrought by the process of industrialization would erode the leaders’ trading profits and take resources and labor away from their lands. The aristocracies would be economic losers from industrialization. More important, they would also be political losers, as the process of industrialization would undoubtedly create instability and political challenges to their monopoly of political power.

At the same time, I began to question the efficacy of government for improving human lives. I came to suspect that taxation, restrictions, mandates, subsidies, licenses, tariffs, bailouts, prohibitions and all the rest, even if well-intended, usually protect monopoly, cause recession, burden the poor, enforce racial discrimination (as I learned from Jennifer Roback, the Jim Crow laws were legislation), obstruct education, and so on.

History clearly shows that governments that have tried to contain, regulate, or otherwise usurp capital have failed. It is the same with brainpower; no one has a monopoly on brainpower. Controlling brainpower is like herding cats. Brainpower creates capital, and capital fuels brainpower. It is a fundamental dynamic principle. Great ideas, solutions, insights, or inventions will develop only where they are nurtured and properly rewarded.

The processes of corporate power do not work in isolation. The economic and legal mechanisms that allow the privatization of the commonwealth, externalization of costs, predatory economic practices, political influence-buying, manipulation of regulation and deregulation, control of the media, propaganda and advertising in schools, and the use of police and military forces to protect the property of the wealthy-all of these work synergistically to weave a complex web of power. Activists have dedicated lifetimes of necessary work to deal with the results of corporate power, by trying to mitigate the results of power: an ever-increasing disparity in wealth and power and continual economic, political, environmental, and human rights crises. For social justice campaigns to be strategic, it is also necessary to examine how privatization, externalization, monopoly, and other corporate power processes have been institutionalized. This institutionalization is exemplified in the structural adjustment programs of the World Bank and International Monetary Fund, and in recent "free" trade agreements which have culminated in the creation of the World Trade Organization. An understanding of such institutions provides a necessary tool for achieving the long-term goals of environmental sustainability and social justice.

Neofeudalism: Much as warlords seized land in the Norman Conquest and levied rent on subject populations (starting with the Domesday Book, the great land census of England and Wales ordered by William the Conqueror), so today’s financialized mode of warfare uses debt leverage and foreclosure to pry away land, natural resources and economic infrastructure. The commons are privatized by bondholders and bankers, gaining control of government and shifting taxes onto labor and small-scale industry. Household accounts, corporate balance sheets and public budgets are earmarked increasingly to pay real estate rent, monopoly rent, interest and financial fees, and to bear the taxes shifted off rentier wealth. The rentier oligarchy makes itself into a hereditary aristocracy lording it over the population at large from gated communities that are the modern counterpart to medieval castles with their moats and parapets.

Note the profound implications of this closed-system economic paradigm, for it necessitates that the Bilderberg and similar Groups must resort to active measures to suppress the scientific development of new theories and their allied technologies that would shift the world’s energy supply — and hence the financial system — to a new basis, and a basis no longer needing to be reliant upon their own monopoly financial power to create the medium of exchange and credit.

The government monopoly of money leads not just to the suppression of innovation and experiment, not just to inflation and debasement, not just to financial crises, but to inequality too. As Dominic Frisby points out in his book Life After the State, opportunities in finance ripple outwards from the Treasury. The state spends money before it even exists; the privileged banks then get first access to newly minted money and can invest it before assets have increased in cost. By the time it reaches ordinary people, the money is worth less. This outward percolation is known as the Cantillon Effect – after Richard Cantillon, who noticed that the creation of paper money in the South Sea Bubble benefited those closest to the source first. Frisby argues that the process of money creation by an expansionary government effectively redistributes money from the poor to the rich. ‘This is not the free market at work, but a gross, unintended economic distortion caused by the colossal government intervention.’ The

In fact, as these companies offered more and more (simply because they could), they found that demand actually followed supply. The act of vastly increasing choice seemed to unlock demand for that choice. Whether it was latent demand for niche goods that was already there or a creation of new demand, we don't yet know. But what we do know is that the companies for which we have the most complete data - netflix, Amazon, Rhapsody - sales of products not offered by their bricks-and-mortar competitors amounted to between a quarter and nearly half of total revenues - and that percentage is rising each year. in other words, the fastest-growing part of their businesses is sales of products that aren't available in traditional, physical retail stores at all. These infinite-shelf-space businesses have effectively learned a lesson in new math: A very, very big number (the products in the Tail) multiplied by a relatives small number (the sales of each) is still equal to a very, very big number. And, again, that very, very big number is only getting bigger. What's more, these millions of fringe sales are an efficient, cost-effective business. With no shelf space to pay for - and in the case of purely digital services like iTunes, no manufacturing costs and hardly any distribution fees - a niche product sold is just another sale, with the same (or better) margins as a hit. For the first time in history, hits and niches are on equal economic footing, both just entries in a database called up on demand, both equally worthy of being carried. Suddenly, popularity no longer has a monopoly on profitability.

In the real world outside economic theory, every business is successful exactly to the extent that it does something others cannot. Monopoly is therefore not a pathology or an exception. Monopoly is the condition of every successful business. Tolstoy opens Anna Karenina by observing: “All happy families are alike; each unhappy family is unhappy in its own way.” Business is the opposite. All happy companies are different: each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.

What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914! The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot. But escape was possible, for any man of capacity or character at all exceeding the average, into the middle and upper classes, for whom life offered, at a low cost and with the least trouble, conveniences, comforts, and amenities beyond the compass of the richest and most powerful monarchs of other ages. The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighbouring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference. But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper, and appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalisation of which was nearly complete in practice.

The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighboring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference. But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper, and appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice.

All around the world, people have an overwhelming sense that something is broken. This is leading to record levels of populism in the United States and Europe, resurgent intolerance, and a desire to upend the existing order. The left and right cannot agree on what is wrong, but they both know that something is rotten. Capitalism has been the greatest system in history to lift people out of poverty and create wealth, but the “capitalism” we see today in the United States is a far cry from competitive markets. What we have today is a grotesque, deformed version of capitalism. Economists such as Joseph Stiglitz have referred to it as “ersatz capitalism,” where the distorted representation we see is as far away from the real thing as Disney's Pirates of the Caribbean are from real pirates. If what we have is a fake version of capitalism, what does the real thing look like? What should we have? According to the dictionary, the idealized state of capitalism is “an economic system based on the private ownership of the means of production, distribution, and exchange, characterized by the freedom of capitalists to operate or manage their property for profit in competitive conditions.

But the most lasting economic contribution of the first myth of the machine was the separation between those who worked and those who lived in idleness on the surplus extracted from the worker by reducing his standard of living to penury. Forced poverty made possible forced labor: in an agricultural society both rested on the royal monopoly of land and the control of the usufruct. According to Akkadian and Babylonian scriptures, the gods created men in order to free themselves from the hard necessity of work. Here, as in so many other places, the gods prefigured in fantasy what kings actually did.

As the bandwidth revolution unfolds, it will draw people more and more into the borderless virtual world of online communities and cybercommerce, a world with enough graphic density to become the “metaverse,” the kind of alternative, cyberspace reality imagined by the science fiction novelist Neal Stephenson. Stephenson’s “metaverse” is a virtual community with its own laws, princes, and villains.41 As ever more economic activity is drawn into cyberspace, the value of the state’s monopoly power within borders will shrink, giving states a growing incentive to franchise and fragment their sovereignty. Just

The United States has every reason from history and geopolitics to bolster the European Union and prevent its drifting off into a geopolitical vacuum; the United States, if separated from Europe in politics, economics, and defense, would become geopolitically an island off the shores of Eurasia, and Europe itself could turn into an appendage to the reaches of Asia and the Middle East. Europe, which had a near monopoly in the design of global order less than a century ago, is in danger of cutting itself off from the contemporary quest for world order by identifying its internal construction with its ultimate geopolitical purpose.

Increasingly economic historians can draw analogies between the development of the present crisis and the period between the two world wars, as well as the crisis of a century ago, which was associated with the so-called great depression of 1873-1895. The latter crisis resulted in the rise of monopoly capitalism and imperialism, but also the end of Pax Britannica, as Britain began its decline from world leadership in the face of challenges from Germany and the United States. The present world crisis seems to be spelling the beginning of the end of Pax Americana and may hold untold other major readjustments in the international division of labor and world power in store for the future.

a perfectly competitive industry is an utter impossibility in the real world. The requirements for this status are numerous and ridiculously otherworldly: completely homogeneous products; an indefinitely large, not to say infinite, number of both buyers (to stave off monopsony)5 and sellers (to preclude monopoly); full and complete information about everything relevant on the part of all market participants; zero profits and equilibrium. The reductio ad absurdum of this objection is that, not only could roads not be privatized under such impossible criteria, but neither could anything else be. That is, this is a recipe for a complete takeover by the government of the entire economy; whether by nationalization (communism) or regulation (fascism), it matters little.

In country after country where local moneys were abolished in favor of interest-bearing central currency, people fell into poverty, health declined, and society deteriorated12 by all measures. Even the plague can be traced to the collapse of the marketplace of the late Middle Ages and the shift toward extractive currencies and urban wage labor. The new scheme instead favored bigger players, such as chartered monopolies, which had better access to capital than regular little businesses and more means of paying back the interest. When monarchs and their favored merchants founded the first corporations, the idea that they would be obligated to grow didn’t look like such a problem. They had their nations’ governments and armies on their side—usually as direct investors in their projects. For the Dutch East India Company to grow was as simple as sending a few warships to a new region of the world, taking the land, and enslaving its people. If this sounds a bit like the borrowing advantages enjoyed today by companies like Walmart and Amazon, that’s because it’s essentially the same money system in operation, favoring the same sorts of players. Yet however powerful the favored corporations may appear, they are really just the engines through which the larger money system extracts value from everyone’s economic activity. Even megacorporations are like competing apps on a universally accepted, barely acknowledged smartphone operating system. Their own survival is utterly dependent on their ability to grow capital for their debtors and investors.

Antinomy, that is, the existence of two laws or tendencies which are opposed to each other, is possible, not only with two different things, but with one and the same thing. Considered in their thesis, that is, in the law or tendency which created them, all the economical categories are rational, — competition, monopoly, the balance of trade, and property, as well as the division of labor, machinery, taxation, and credit. But, like communism and population, all these categories are antinomical; all are opposed, not only to each other, but to themselves. All is opposition, and disorder is born of this system of opposition. Hence, the sub-title of the work, — “Philosophy of Misery.” No category can be suppressed; the opposition, antinomy, or contre-tendance, which exists in each of them, cannot be suppressed.

The transubstantiation of Andrew Johnson was complete. He had begun as the champion of the poor laborer, demanding that the land monopoly of the Southern oligarchy be broken up, so as to give access to the soil, South and West, to the free laborer. He had demanded the punishment of those southerners who by slavery and by war, had made such an economic program impossible. Suddenly thrust into the presidency, he had retreated from this attitude. He had not only given up extravagant ideas of punishment, but he dropped his demands for dividing up plantations when he largely realized that Negroes would be beneficiaries. Because he could not conceive of Negroes as men, he refused to advocate universal democracy, of which, in his young manhood, he had been the fiercest advocate, and made strong alliance with those who would restore slavery under another name.

In the case of patentable ideas such as the wheelbarrow, the idea of unpriced spillovers is more plausible. Yet there is no reason to believe that it is of practical importance. Indeed, there is a modern example of the wheelbarrow – that of Travelpro – the inventor of the modern wheeled roll-on suitcase with a retractable handle. Obviously such an idea can not both be useful and be secret – and once you see a wheeled roll-on suitcase it is not difficult to figure out how to make one of your own. Needless to say, Travelpro was quickly imitated – and so quickly you probably have never even heard of Travelpro. Never-the-less – despite their inability to garner an intellectual monopoly over their invention – they found it worthwhile to innovate – and they still do a lucrative business today, claiming “425,000 Flight Crew Members Worldwide Choose Travelpro Luggage.

major piece of financial regulation—the Dodd-Frank Wall Street Reform and Consumer Protection Act—moved toward passage. Wall Street money flowed to some of its fiercest critics in the 2010 election. That year, seven out of the ten top recipients of Goldman Sachs contributions, for example, were Democrats. Former Clinton secretary of labor Robert Reich declared that this was evidence that Wall Street was “bribing elected officials with their donations.”14 I would argue that Reich had the power equation wrong. It was the Permanent Political Class that threatened to cause severe damage to the financiers—not the other way around. As the late economics professor Peter H. Aranson puts it, “The real market for contributions is one of ‘extortion’ by those who hold a monopoly on the use of coercion—the officeholders.”15 The midterm election passed, and so did Dodd-Frank.

What is this thing called government, which can grant and take away rights? There are all sorts of answers to that question, but all the answers will agree on one point, that government is a social instrument enjoying a monopoly of coercion. The socialist says that the monopoly of coercion is vested in the government in order that it may bring about an ideal social and economic order; others say that the government must have a monopoly of coercion in order to prevent individuals from using coercion on one another. In short, the essential characteristic of government is power. If, then, we say that our rights stem from government, on a loan basis, we admit that whoever gets control of the power vested in government is the author of rights. And simply because he has the power to enforce his will. Thus, the basic axiom of socialism, in all its forms, is that might is right.

Representative democracy, as in, say, the United States or Great Britain, would be criticized by an anarchist of this school on two grounds. First of all because there is a monopoly of power centralized in the State, and secondly and critically—because representative democracy is limited to the political sphere and in no serious way encroaches on the economic sphere. Anarchists of this tradition have always held that democratic control of one's productive life is at the core of any serious human liberation, or, for that matter, of any significant democratic practice. That is, as long as individuals are compelled to rent themselves on the market to those who are willing to hire them, as long as their role in production is simply that of ancillary tools, then there are striking elements of coercion and oppression that make talk of democracy very limited, if even meaningful.

The answer to this question is closely connected with that other question which arises here, that of who is to do the planning. It is about this question that all the dispute about “economic planning” centers. This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals. Planning in the specific sense in which the term is used in contemporary controversy necessarily means central planning—direction of the whole economic system according to one unified plan. Competition, on the other hand, means decentralized planning by many separate persons. The halfway house between the two, about which many people talk but which few like when they see it, is the delegation of planning to organized industries, or, in other words, monopoly.

The EEC was grounded in weakness, not strength. As Spaak’s 1956 report emphasized, ‘Europe, which once had the monopoly of manufacturing industries and obtained important resources from its overseas possessions, today sees its external position weakened, its influence declining and its capacity to progress lost in its divisions.’ It was precisely because the British did not—yet—understand their situation in this light that they declined to join the EEC. The idea that the European Common Market was part of some calculated strategy to challenge the growing power of the United States—a notion that would acquire a certain currency in Washington policy circles in later decades—is thus quite absurd: the new-formed EEC depended utterly upon the American security guarantee, without which its members would never have been able to afford to indulge in economic integration to the exclusion of all concern with common defense.

When Ayatollah Khamenei needs to make a crucial decision about the Iranian economy, he will not be able to find the necessary answer in the Quran, because seventh-century Arabs knew very little about the problems and opportunities of modern industrial economies and global financial markets. So he, or his aides, must turn to Karl Marx, Milton Friedman, Friedrich Hayek, and the modern science of economics to get answers. Having made up his mind to raise interest rates, lower taxes, privatize government monopolies, or sign an international tariff agreement, Khamenei can then use his religious knowledge and authority to wrap the scientific answer in the garb of this or that Quranic verse and present it to the masses as the will of Allah. But the garb matters little. When you compare the economic policies of Shiite Iran, Sunni Saudi Arabia, Jewish Israel, Hindu India, and Christian America, you just don’t see that much of a difference.

Paleolithic communities had probably been egalitarian because hunter-gathers could not support a privileged class that did not share the hardship and danger of the hunt. Because these small communities lived at near-subsistence level and produced no economic surplus, inequity of wealth was impossible. The tribe could survive only if everybody shared what food they had. Government by coercion was not feasible because all able-bodied males had exactly the same weapons and fighting skills. Anthropologists have noted that modern hunter-gatherer societies are classless, that their economy is "a sort of communism," and that people are honored for skills and qualities, such as generosity, kindness, and even-temperedness, that benefit the community as a whole. But in societies that produce more than they need, it is possible for a small group to exploit this surplus for its own enrichment, gain a monopoly of violence, dominate the rest of the population.

All the problems that the socialists proposed to themselves, cosmogonic visions, reverie and mysticism being cast aside, can be reduced to two principal problems. First problem: To produce wealth. Second problem: To share it. The first problem contains the question of work. The second contains the question of salary. In the first problem the employment of forces is in question. In the second, the distribution of enjoyment. From the proper employment of forces results public power. From a good distribution of enjoyments results individual happiness. By a good distribution, not an equal but an equitable distribution must be understood. From these two things combined, the public power without, individual happiness within, results social prosperity. Social prosperity means the man happy, the citizen free, the nation great. England solves the first of these two problems. She creates wealth admirably, she divides it badly. This solution which is complete on one side only leads her fatally to two extremes: monstrous opulence, monstrous wretchedness. All enjoyments for some, all privations for the rest, that is to say, for the people; privilege, exception, monopoly, feudalism, born from toil itself. A false and dangerous situation, which sates public power or private misery, which sets the roots of the State in the sufferings of the individual. A badly constituted grandeur in which are combined all the material elements and into which no moral element enters. Communism and agrarian law think that they solve the second problem. They are mistaken. Their division kills production. Equal partition abolishes emulation; and consequently labor. It is a partition made by the butcher, which kills that which it divides. It is therefore impossible to pause over these pretended solutions. Slaying wealth is not the same thing as dividing it. The two problems require to be solved together, to be well solved. The two problems must be combined and made but one.

It is certainly true that imitation is everywhere, from sport to business, from dancing to dressing, from driving to singing. In fact, imitation is at the heart of competitive behavior and of almost any kind of social interaction. Like the fixed cost cum marginal cost argument that, as we pointed out earlier, is so powerful an argument that it can be applied to any and every thing, imitation is so widespread that, when taken literally, it is also everywhere. By this token one should see unpriced externalities in every market where producers imitate each other, thereby concluding that all kinds of economic activities should be allowed some form of monopoly power. Restaurants imitate each other, as coffee shops, athletes, real estate agents, car salesmen, and even bricklayers do, but we would certainly find it foolhardy to grant to a firm in each of these businesses monopoly power over one technique or another. This suggests that equating imitation with unpriced externalities leads us into a dark night in which all cows are gray.

I’m not suggesting anyone has acted illegally. To the contrary: CEOs believe they are supposed to maximize shareholder returns, and one means of accomplishing that goal is to play the political game as well as it possibly can be played and field the largest and best legal and lobbying teams available. Trade associations see their role as representing the best interests of their corporate members, which requires lobbying ferociously, raising as much money as possible for political campaigns of pliant lawmakers, and even offering jobs to former government officials. Public officials, for their part, perceive their responsibility as acting in the public interest. But the public interest is often understood as emerging from a consensus of the organized interests appearing before them. The larger and wealthier the organization, the better equipped its lawyers and its experts are to assert what’s good for the public. Any official who once worked for such an organization, or who suspects he may work for one in the future, is prone to find such arguments especially persuasive. Inside the mechanism of the “free market,” the economic and political power of the new monopolies feed off and enlarge each other.

From Smith's principle that labor is the true measure of price—or, as Warren phrased it, that cost is the proper limit of price—these three men (Josiah Warren, Pierre-Joseph Proudhon and Karl Marx) made the following deductions: that the natural wage of labor is its product; that this wage, or product, is the only just source of income (leaving out, of course, gift, inheritance, etc.); that all who derive income from any other source abstract it directly or indirectly from the natural and just wage of labor; that this abstracting process generally takes one of three forms, interest, rent, and profit; that these three constitute the trinity of usury, and are simply different methods of levying tribute for the use of capital; that, capital being simply stored-up labor which has already received its pay in full, its use ought to be gratuitous, on the principle that labor is the only basis of price; that the lender of capital is entitled to its return intact, and nothing more; that the only reason why the banker, the stockholder, the landlord, the manufacturer, and the merchant are able to exact usury from labor lies in the fact that they are backed by legal privilege, or monopoly; and that the only way to secure to labor the enjoyment of its entire product, or natural wage, is to strike down monopoly.

The development of the economic programme which consists in the destruction of these monopolies and the substitution for them of the freest competition led its authors to a perception of the fact that all their thought rested upon a very fundamental principle, the freedom of the individual, his right of sovereignty over himself, his products, and his affairs, and of rebellion against the dictation of external authority. Just as the idea of taking capital away from individuals and giving it to the government started Marx in a path which ends in making the government everything and the individual nothing, so the idea of taking capital away from government-protected monopolies and putting it within easy reach of all individuals started Warren and Proudhon in a path which ends in making the individual everything and the government nothing. If the individual has a right to govern himself, all external government is tyranny. Hence the necessity of abolishing the State. This was the logical conclusion to which Warren and Proudhon were forced, and it became the fundamental article of their political philosophy. It is the doctrine which Proudhon named An-archism, a word derived from the Greek, and meaning, not necessarily absence of order, as is generally supposed, but absence of rule. The Anarchists are simply unterrified Jeffersonian Democrats. They believe that "the best government is that which governs least," and that that which governs least is no government at all.

Civilization on Earth planet was equated with selfishness and greed; those people who lived in a civilized state exploited those who did not. There were shortages of vital commodities on Earth planet, and the people in the civilized nations were able to monopolize those commodities by reason of their greater economic strength. This imbalance appeared to be at the root of the disputes.

The initial result of this dynamic, quite clearly, is a rapid development of the traits of concentration within American imperialism. The simultaneously political and economic control over other countries exercised by U. S. finance capital; the increasing role of the American State in the establishment of this control; the direct stranglehold over German, Japanese, and Italian capital; the acceleration of vertical and horizontal concentration imposed by the need to control and regulate more and more completely its sources of raw materials and its domestic as well as foreign markets; the expansion of its military apparatus, the likelihood of "total" war, and a war economy; the need for increased exploitation of the working class imposed by the falling rate of profit — all these factors drive the American economy beyond capitalism "run by the monopolies" (just as these monopolies went beyond the stage of competitive capitalism) in order to arrive at the stage of a universal monopoly that is identical with the State. A new crisis of overproduction -more acute even than the present crisis- but, above all, war, will signal an extraordinary acceleration of this process.

The transformation of competitive capitalism into monopoly capitalism altered the character of the economic links between capitalist countries and their colonies. Monopolies require a well-ordered market with stable sources of raw materials and stable outlets. The colonies therefore became integrated into this general tendency toward market "rationalization," which monopolies try to achieve for their outlets and for the sources of their raw materials. The colonies became above all a field for the investment of overabundant capital from the home countries, which is now exported on an increasing scale from these metropolitan countries to their colonies and to backward countries in general. In these areas the high rate of profit, tied to the very cheap labor costs that prevail there, allows capital to exploit labor to a much greater extent.

The rise of Robber Barons and their monopoly trusts in the late nineteenth and early twentieth centuries underscores that, as we already emphasized in chapter 3, the presence of markets is not by itself a guarantee of inclusive institutions. Markets can be dominated by a few firms, charging exorbitant prices and blocking the entry of more efficient rivals and new technologies. Markets, left to their own devices, can cease to be inclusive, becoming increasingly dominated by the economically and politically powerful. Inclusive economic institutions require not just markets, but inclusive markets that create a level playing field and economic opportunities for the majority of the people. Widespread monopoly, backed by the political power of the elite, contradicts this. But the reaction to the monopoly trusts also illustrates that when political institutions are inclusive, they create a countervailing force against movements away from inclusive markets. This is the virtuous circle in action. Inclusive economic institutions provide foundations upon which inclusive political institutions can flourish, while inclusive political institutions restrict deviations away from inclusive economic institutions. Trust busting in the United States, in contrast to what we have seen in Mexico illustrates this facet of the virtuous circle. While there is no political body in Mexico restricting Carlos Slim’s monopoly, the Sherman and Clayton Acts have been used repeatedly in the United States over the past century to restrict trusts, monopolies, and cartels, and to ensure that markets remain inclusive.

The collapse of startups should be no surprise. Ever since antitrust enforcement was changed under Ronald Reagan in the early 1980s, small was bad and big was considered beautiful. Murray Weidenbaum, the first chair of Reagan's Council of Economic Advisors, argued that economic growth, not competition, should be policymakers' primary goal. In his words, “It is not the small businesses that created the jobs,' he concluded, ‘but the economic growth.” And small businesses were sacrificed for the sake of bigger businesses.34 Ryan Decker, an economist at the Federal Reserve, found that the decline is even infecting the high technology sector. Americans look at startups over the years like PayPal and Uber and conclude the tech scene is thriving, but Decker points out that in the post-2000 period, we have seen a decline even in areas of great innovation like technology. Over the past 15 years, there are not only fewer technology startups, but these young firms are slower growing than they were before. Given the importance of technology to growth and productivity, his findings should be extremely troubling. The decline in firm entries is a mystery to many economists, but the cause is clear: greater industrial concentration has been choking the economy, leading to fewer startups. Firms are getting bigger and older. In a comprehensive study, Professor Gustavo Grullon showed that the disappearance of small firms is directly related to increasing industrial concentration. In real terms, the average firm in the economy has become three times larger over the past 20 years. The proportion of people employed by firms with 10,000 employees or more has been growing steadily. The share started to increase in the 1990s, and has recently exceeded previous historical peaks. Grullon concluded that when you look at all the evidence, it points “to a structural change in the US labor market, where most jobs are being created by large and established firms, rather than by entrepreneurial activity.”35 The employment data of small firms supports Grullon's conclusions; from 1978 to 2011, the number of jobs created by new firms fell from 3.4% of total business employment to 2% (Figure 3.2).36

Many economists now openly praise monopolies as a more enlightened form of capitalism. Robert Atkinson and Michael Lind wrote a book titled Big Is Beautiful. They write, “In the abstract universe of Econ 101, monopolies and oligopolies are always bad because they distort prices… . In the real world, things are not so simple.” And to enlighten us, they continue, “Academic economics includes a well-developed literature about imperfect markets. But it is reserved for advanced students,” and these lessons are unavailable to the poor, benighted souls who don't have PhDs.15 It is ironic that the champions of monopolies are essentially aligning themselves with neo-Marxist economists who think that in capitalism the big inevitably eat the small. As the eminent Polish economist Michał Kalecki wrote, “Monopoly appears to be deeply rooted in the nature of the capitalist system: free competition, as an assumption, may be useful in the first stage of certain investigations, but as a description of the normal stage of capitalist economy it is merely a myth.”16 Kalecki would have felt at home in Omaha and Silicon Valley. Buffett and Thiel's views on competition capture the contradictions of capitalism. Thiel's idea that innovation comes only from large monopolies ignores his own personal history at PayPal. He was David creating a startup from nothing and competing against financial Goliaths.

Another great mystery for economists and central bankers is why businesses are not investing more. It is a puzzle why they're returning almost all cash to shareholders rather than doing more research and development or spending it on new factories and equipment. Larry Summers, the former Secretary of the Treasury and Harvard economics professor, shares the view with the 1930s economist Alvin Hansen that we're experiencing a “secular stagnation.” Supposedly, the economies of the industrial world suffer from “an imbalance resulting from an increasing propensity to save and a decreasing propensity to invest.”59 This means that the slowdown is structural and not cyclical. He blames inequality and technology. “Greater saving has been driven by increases in inequality and in the share of income going to the wealthy.

Europeans had highly developed regional and national cultures and societies before they bolted on Protestantism. America, on the other hand, was half-created by Protestant extremists to be a Protestant society. American academics accept the idea of American exceptionalism in one of its meanings—that our peculiar founding circumstances shaped us. “The position of the Americans,” Tocqueville wrote in Democracy in America, “is…quite exceptional,” by which he meant the Puritanism, the commercialism, the freedom of religion, the individualism, “a thousand special causes.” The professoriate rejects exceptionalism in today’s right-wing sense, that the United States is superior to all other nations, with a God-given mission. And they also resist the third meaning, the idea that a law of human behavior doesn’t apply here—scholars of religion insist that explanations of religious behavior must be universal. The latest scholarly consensus about America’s exceptional religiosity is an economic theory. Because all forms of religion are products in a marketplace, they say, our exceptional free marketism has produced more supply and therefore generated more demand. Along with universal human needs for physical sustenance and security, there’s also such a need for existential explanations, for why and how the world came to be. Sellers of religion emerge offering explanations. From the start, religions tended to be state monopolies—as they were in the colonies, the Puritans in Massachusetts and the Church of England in the South. After that original American duopoly was dismantled and the government prohibited official churches, religious entrepreneurs rushed into the market, Methodists and Baptists and Mormons and all the others. European countries, meanwhile, kept their state-subsidized religions, Protestant or Catholic—and so in an economic sense those churches became lazy monopolies.*10 In America, according to the market theorists, each religion competes with all the others to acquire and keep customers. Americans, presented with all this fantastic choice, can’t resist buying. We’re so religious for the same reason we’re so fat.

Deng’s judgment about the importance of strong economic growth was later validated by a series of studies of the collapse of the USSR conducted by party scholars in the 1990s. These scholars concluded that the Communist Party of the Soviet Union (CPSU) fell for four main reasons: •  The economy did not grow fast enough, leading to frustration and resentment, and this failure resulted from insufficient use of market mechanisms. •  The CPSU’s propaganda and information systems were too closed and ideologically rigid, preventing officials from getting accurate and timely knowledge about conditions both inside and outside the Soviet Union. •  Decision-making was far too centralized, and hence far too slow. •  Once reforms started under Gorbachev, they undermined the core principle of the party’s absolute monopoly on political power.14

two well-recognized economic principles. First, the firmer the monopolistic controls in a given market, the higher the prices. Second, monopoly prices are discriminatory prices. "Charging all the traffic will bear" does not mean that all the traffic will bear the same charge! In fact, it will not.

Competition is often conflated with capitalism, but they are not at all the same. Capitalism involves private ownership of the means of production and distribution, but the word implies nothing about the way in which privately owned firms do business. Capitalism is perfectly compatible with a society in which a powerful state doles out favors to private monopolies, protects some enterprises from others, or even sets the prices privately owned firms may charge for their products. Indeed, while capitalists tend to praise the virtues of competition, many of them would just as soon avoid it.

Human beings need land even more so than they need money; the monopoly of land - not the monopoly of money - is the primary driver of poverty and inequality. Once we understand that the issue is lack of affordable access to land, and therefore to community, we understand why the value of land has to be shared.

In theory, capitalism is an economic system that allows people to freely trade goods and services in a competitive free market. But since the outright ownership of land creates an entry monopoly, it restricts the operation of the free market... Consequently, our current implementation of capitalism is deeply responsible for the exploitation of nature and the decline of social well-being.

Markets are free when human beings have equal opportunities to influence the production and trade of desirable goods and services... Some people attain market control and set market prices due to favourable natural, social or political conditions: They attain a monopoly. The problem with monopolies is that they enable those who have attained them to extract money from society without providing goods or services of corresponding value. Apart from abolute monopolies, monopolies can also occur when the market is simply closed to new participants because overall supply can't be increased; these are known as entry monopolies.

Like his colleague Thomas, he viewed prejudice as a form of instinct, but where Thomas set it down to a reaction to the Other’s physical appearance, Park saw in it a manifestation of competition: Race prejudice may be regarded as a spontaneous, more or less instinctive defense-reaction, the practical effect of which is to restrict free competition between races. Its importance as a social function is due to the fact that free competition, particularly between people with different standards of living, seems to be, if not the original source, at least the stimulus to which race prejudice is the response.48 Park’s reference to free competition hinted at the strains being placed on society in a postwar context in which massive foreign (and particularly Asian) immigration had resumed. He argued that where fundamental racial interests are not yet controlled by law, custom, or other arrangement between the groups in question, racial prejudice will inexorably develop. It may, however, be deflected by ‘the extension of the machinery of cooperation and social control’ – in the U.S. case, the caste system and slavery: we may regard caste, or even slavery, as one of those accommodations through which the race problem found a natural solution. Caste, by relegating the subject race to an inferior status, gives to each race at any rate a monopoly of its own tasks. When this status is accepted by the subject people, as in the case where the caste or slavery systems become fully established, racial competition ceases and racial animosity tends to disappear ... Each race being in its place, no obstacle to racial cooperation exists.49 This paper shows that Park’s thought in 1917 was not free of obfuscation and bias. One finds him maintaining that while ‘caste and the limitation of free competition is economically unsound,’ it is nonetheless ‘politically desirable’50 because

Land ownership is an entry monopoly: Land is naturally scarce for each location since its supply can't be increased... When people buy a piece of land, their ownership gives them the right to exclude the rest of society from the benefits afforded to them by their land, even though those benefits only arise from nature and from the presence of goods and services that have been provided by that same society in the first place. Buyers pay for exclusive access rights to land and pay only to the previous landowner instead of to all the people who are now excluded from the location privileges that this one particular piece of land provides.

Throughout American economic life, regulatory barriers to entry and competition limit innovation by providing excessive monopoly privileges through copyright and patent laws, restrict occupational choice by protecting incumbent service providers through occupational licensing restrictions, and create artificial scarcity through land-use regulation. They contribute to increased inequality while reducing productivity growth.

The big tech companies—the Europeans have charmingly, and correctly, lumped them together as GAFA (Google, Apple, Facebook, Amazon)—are shredding the principles that protect individuality. Their devices and sites have collapsed privacy; they disrespect the value of authorship, with their hostility to intellectual property. In the realm of economics, they justify monopoly with their well-articulated belief that competition undermines our pursuit of the common good and ambitious goals.

Instead of leading to the promised leisure economy of abundance by freeing society from the legacies of feudalism and the hereditary privileges of aristocracies, bankers and monopolists, today’s financial elites promote Junk Economics to increase their time-honored “free lunch” at society’s expense. The debt overhead they create for the economy at large was well identified a century ago as avoidable. But today’s financial class has idealized running into debt as the way for economies to get rich by inflating asset prices. Wages, profits and rents are being turned into a flow of interest payments that are growing exponentially. Meanwhile, national statistics divert attention away from how debt service is siphoning household and business income up to the top of the economic pyramid. The suffering caused by the resulting financial austerity is unnecessary, not a result of any natural law. This reversal of the classical ideal of a “free market” – a market free from land rent, monopoly rent and predatory finance – has been promoted with a new vocabulary of Orwellian Doublespeak.

Urbanization and the emergence of a socially conscious middle and working class also challenged the political monopoly of landed aristocracies. So with the spread of the Industrial Revolution the aristocracies weren’t just the economic losers; they also risked becoming political losers, losing their hold on political power. With their economic and political power under threat, these elites often formed a formidable opposition against industrialization. Many organized against it, rioting and destroying the machines they saw as responsible for the decline of their livelihood. They were the Luddites, a word that has today become synonymous with resistance to technological change.

Markets can be dominated by a few firms, charging exorbitant prices and blocking the entry of more efficient rivals and new technologies. Markets, left to their own devices, can cease to be inclusive, becoming increasingly dominated by the economically and politically powerful. Inclusive economic institutions require not just markets, but inclusive markets that create a level playing field and economic opportunities for the majority of the people. Widespread monopoly, backed by the political power of the elite, contradicts this. But the reaction to the monopoly trusts also illustrates that when political institutions are inclusive, they create a countervailing force against movements away from inclusive markets. This is the virtuous circle in action. Inclusive economic institutions provide foundations upon which inclusive political institutions can flourish, while inclusive political institutions restrict deviations away from inclusive economic institutions.