scotty435 wrote:
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Without government intervention monopolies and cartels are inherently unstable and competition will always destroy them.
I suggest you ponder this deeply SV because I don't buy it. For a monopoly to develop, it must have a competitive advantage or be mandated by the government (like Bell Telephone or utility companies). Once it is there it can maintain that advantage by overcharging enough to create a nest egg. Whenever a competitor comes into the market it uses that nest egg to drop it's price until it runs the competitor out of the market.
Well first we had the problem of the government run monopoly in the first place

This maybe be true for a short time, however assuming this now private company is completely free of advantages given to them by the government (expensive regulations preventing smaller companies from competing) Competition will prevail. Maybe the first couple of competitors may find it hard to break into the market however while large companies can have the advantage of scale, smaller companies are often far more efficient. This will eventually wear down any profits that may be left over from former monopoly days. Telstra in Australia is a good example. DESPITE Telstra owning most of the copper wire in the "last mile" giving it a big advantage over its competitors, we see a slow but steady erosion of their market share to the likes of optus, vodafone, etc as they can be more competive not just in price but new and innovative services. Sure they are still better in some way, but they have disadvantages. It is not a monopoly if other companies can successfully compete.
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In addition it can monopolize the resources used to create a product so that it prevents competition.
This is a great point. It brings to mind the monopolisation of aluminium and other commodities by JP Morgan. However JP Morgan is one of the most powerful groups in the world and has an incredible influence over the US congress and so we certainly can't use that as an example of monopolies existing in the free market.
Maybe microsoft is a good example. Should they have been made to break up ?
There was that court case over including internet explorer (was it ?) and pushing out competition. Its not really a monopoly, other companies can still compete if they want to. Microsoft just have a superior product. For all the complaints about the windows series, it is still to this day generally a better alternative. iOS and all the Unix based systems are competitors, and they make money so it is not really a monopoly.
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They have economies of scale. They can also sue their rivals out of existence or just buy them up. On the up side maybe a bigger monopoly with deeper pockets will come along and wipe them out
True but we can never know (well we can, but it takes a lot of time) how much political power some companies have to affect the outcome of court cases and such.
I don't see a problem with buying them. If the company only has a few shareholders then its totally up to the owners to sell or not. If it is a publicly listed company then its still up the the majority shareholder whether or not they want to sell out more than a controlling share 51% or whatever.
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I think you are assuming that they get sloppy and inneficient but that's not always the case - Alcoa before it was split up would probably be a good example of a strong monopoly that had to be broken up by the US government.
I don't know the story but I would be very surprised if they were totally seperated from all the political-corporate dealings that are common place today.
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The British East India Company might be another example of a strong monopoly even though it acted as the British governments agent in many locations. Guess who had to break it up? That was back when they could still revoke corporate charters.
This was by no means a purely free market company. The government had some sort of control of it from the very start, and there is no way there were not ongoing entanglements between the company and the government. They had a lot of political power and so this just goes under the umbrella of a monopoly that exists because of government intervention. Just because the government has to break up a company doesn't meant it wasnt the government that allowed to become so large in the first place.
Governments have been known to change their mind in a heartbeat due to public (or other) pressure.
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Certain types of monopolies would be unstable but not necessarily all.
I'm still thinking all.. unless they are not a true monopoly... maybe there are some examples that seem to be this way.. but the devil is always in the details..
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Anyone who thinks that government can improve the world through regulation has no idea what they are talking about and has never read any usefull history.
I Don't agree with this SV. I'm willing to consider that you didn't mean it the way it came out but I rarely agree with a blanket statement like this. What would the world be like it everything was unregulated - would it be better

Kind of doubt it!
I would like to retract the harshness and brevity of the statement. I do however still put forward that in almost all cases regulations on companies are lobbied for by the large corporations in order to prevent competition. Sometimes regulations seem good but in reality they just make bad regulations slightly better.
Some regulations seem totally necessary however without the bloated and growing state may not be needed at all.
My opinion comes from many hours of reading and research (Im not trying to impress anyone) so the context from which it comes might seem a bit out of field but I stand by it and am willing to refer anyone interested to the material.