Monopoly (alternatively oligopoly/cartel) is the entire issue, all the time.
Who has a monopoly...they're doing bad stuff.
Who has to compete for customers? They're doing good stuff.
Does the government have substantial power? Folks are trying to use it to gain monopoly.
Protectionism: 99.8% of the time...it's group A saying: group A's products are necessary for future growth. Therefore we should create a local monopoly (or otherwise uneven playing field) and make everyone else in the group pay more for A's products.
Regulation: 99.98% of the time...it's group A saying: let's make sure the legislation gets written in such a way that favors us existing players, and discourages new entrants.
The power to create monopoly is VERY bad. Presumptively, anything that is an attempt at monopoly-creation should be opposed on principle. It screws everyone else.
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What about natural monopolies? Is it justifiable for men to band together to break up a natural monopoly? Can we band together and force a contract carrier to become a common carrier? E.g. only one practical train line through a mountain pass, but the private carrier charges differential rates.
I think you're being overly self confident with your estimated percentages. At least for the regulation area.
At a guess (60% confident) this would be because you are an educated, intelligent, person who can operate without guidance. And we live in a culture where a lot of good behaviour has been absorbed into culture, so we just don't see a lot of possible problems, because they've been suppressed so long that nobody would even thing about them any more.
I have to admit that my definition of coercion doesn't allow banding together to break up a natural monopoly.
Best I can say is that there's no monopoly on food or shelter, so it doesn't matter. Monopoly pricing is just an incentive to route around the monopoly. The higher the price, the faster they'll be nullified.
"And we live in a culture where a lot of good behaviour has been absorbed into culture, so we just don't see a lot of possible problems, because they've been suppressed so long that nobody would even thing about them any more."
I am only recently coming to appreciate how important this point is.
The evidence clearly shows that 100 IQ is a dumb shit. For example, they have habits, not thoughts.
However, A) the evidence is self-flattering so I suspect bias but B) thinking the average person is a dumb shit is depressing, so I suspect a reverse bias explains my previous ignorance. Finally even if true C) this may be a result of eg. public schooling, not natural inclination.
Sorry to double, but this is important.
Considering the cognitive gains I've experienced from switching to paleo and giving up alarm clocks, diet and sleep alone may explain why most people are idiots.
If there is a "natural monopoly" why not build a new way through the mountain pass? Or fly over the mountain or tunnel under it or build a high-speed route around it? There is no need to break a monopoly; just out-compete it. As long as it is not a government monopoly, if it tries to stop you from competing, you can defend yourself. Government frowns on that.
Let us say that I spend 1 billion dollars to install a phone network in a city. And now I own this network I charge people $5 per phonecall. My marginal cost is $0.05 but I have the only phone network, so I get to charge $5.00 and I make 20% return on my investment.
Can someone build another network and so break my monopoly? Yes, yes they can. But it will cost them 1 billion dollars. AND once we have two networks, we will compete*, driving the cost back to near marginal, or about $0.05.
That we neither of us pay off our initial investment. Any potential competitor knows this, and so they never try.
How do we tackle this?
1. Make charging high amounts for phone calls illegal. Politicians will try to reduce the price all the time, nobody risks 1 billion dollars in the first place if they can never profit, residents have to keep using tin cans with string.
2.Get the government to build the system. Now you have a monopoly with government power as well. At least the private monopoly wants to encourage people to use the system up to the maximum profit point. The government monopoly wants to maximize some political objective, and/or minimize work for themselves.
3. Wait until the invention of mobile phones (how Africa approached the problem)
4.???
*Or we could agree to not compete and both charge $5.00, but that is just a monopoly by another name, and doesn't change the situation for the consumers.
4. It doesn't ultimately matter of phone calls cost $5 each. The economy will come to expect that phone calls are rare and not come, as ours, to rely on cheap calls.
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