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Monopoly: A Debate

R. A.:
In his book, Wealth Against Commonwealth (1894), Henry Demarest Lloyd wrote:
"Monopoly is business at the end of its journey."

M. P.:
But business doesn't have an end, it is a continuing journey.

R. A.:
I do not think that H. D. Lloyd intended his words to be taken as literally as you are taking
them. His words are meant to make a certain point. There is something of a suggested
intimation or allusion to business monopoly as being analogous to human maturity.

There is an observed, and observable, tendency to monopoly. This tendency is a propensity; it is not a foregone destiny.

According to Karl Marx: "Capitalism will kill competition."

M. P.:
Then you should be able to name a lot of monopolies that don't rely on State force to
maintain themselves.

R. A.:
Actually, I believe that every capitalist enterprise relies on the capitalist state to enforce,
and to defend them against the class of direct producers who might collectively decide to
expropriate the class of expropriators. I believe that every capitalist monopoly does rely
upon the monopoly-power capitalist state to enforce and to protect the private property
rights of modern capitalism.

M. P.:
In fact there are few of these (or none, depending on what you call state force).  There is an
observed tendency to oligopoly but that is not neccesarily a bad thing.

R. A.:
In my opinion, a tendency to monopoly is only a tendency, and not necessarily or usually a
reality or actuality. Oligopolies are real and actual, while monopolies are the inclination of
every enterprise seeking a 100% market share. I believe that there are statutory
monopolies, sheltered monopolies, and natural monopolies. The antitrust capitalist state
creates policies intended to restrict the formation of natural monopolies, and of sheltered
monopolies which are not also statutory monopolies.

There is every good reason to suspect the natural tendency to monopoly. There is no good
theoretical reason deny the gravitation of small commercial concerns into ever larger
firms.

M. P.:
There are several good theorectical and practical reasons to deny such. Specifically
diseconomies of scale and the difficulty of coordination of very large organisations. Your
ignorance is showing again, which wouldn't be so bad if you'd stop acting like you
understand everything.

R. A.:
I do not know everything, and I do not understand everything. I know this.

However, a monopoly firm's diseconomy of scale can be solved by having multiple plants,
and by making for more flexibility in the face of changes in both markets and techniques.

I do not claim to know all that one needs to know, and that has a lot to do with my stated
inability to answer every question I am asked, and with my own unwillingness to pretend
that I can solve every trivial problem little minds can manage to invent. If we cannot seem to
agree on questions of principle, how can you to expect me to address questions of
practice?

In fact -- to return to the question of monopolies -- in my opinion and observation, the big
business establishments often allow the existence of the smaller companies, giving them
freedom to range into unexplored locations, into new market niches, and letting these small
companies take on the costs and the risks, only to take over the smaller companies if and
when they succeed in an out-of-the-way niche, in an alcove or place which the larger
company has not ventured into. That a large company with a controlling market share
allows a small company some minimal market slice does not itself serve as evidence
against the tendency towards monopoly.

M. P.:
And how do the larger companies do that? If the smaller company succeeds in the niche
then by definition it is hard and expensive to dislodge them from it.

R. A.:
The big fish eat the little fish, as they say. Explaining how this is done will require too much
writing from me, and I'm just not willing to do so much work for you. There is sufficient
literature on this subject; and you can take the time needed to educate yourself, if you want
to know more about the subject.

A monopoly can exist even if there are a lot of lesser players with a weak market share.

M. P.:
In other words why monopoly can exist where it doesn't.

R. A.:
In the literature of economics, monopoly is often used to describe an environment which is
not a pure and perfect monopoly. The word monopoly can embrace a capitalist firm which
accounts for more than 33% of market sales; and so, the word is often used less literally
than you seem to prefer. It is not a usage I invented, however. It is a usage which can be
found in some of the relevant literature.

A capitalist firm can be called a monopoly even though there are some provincial and
petty competitors with some small measure of market sales.

M. P.:
Capitalisation is the adding to something of capital, which has nothing to do with monopoly.

R. A.:
Capitalization is not monopoly in limine, in the beginning; but can become monopoly in futuro, in the future.

M. P.:
Anything can become a monopoly in futuro but it usually doesn't.

R. A.:
I suppose that a majority of business enterprises do not manage to reach a monopoly
position. The tendency towards monopoly is a propensity; it is not an inevitable destination.

As I see it, capitalization empowers, and a monopoly is power.

M. P.:
But one sort of power is not the other.

R. A.:
Without capitalization, a business cannot succeed. The more capitalization a business can
muster, the more the business will resemble or approach monopoly dominance.  Monopoly
is power to a greater extent or degree, and a monopoly's power largely derives from its
exceptional command of a ginormous measure of capital.

A monopoly embodies economic power, effective economic power. A monopoly also exercises influential political power.

In my opinion, the word monopoly is like the word socialism, in that both have different
meanings and uses to people with different opinions.

M. P.:
No they don't.

R. A.:
In my opinion, they do.

M. P.:
The word monopoly has a specific meaning. If it didn't why did you use it?

R. A.:
People communicate with words which can have controversial meanings.

The word monopoly does have a literal, primary meaning, which is the meaning you prefer.
But, there is also a figurative, secondary meaning which is allowed, and which is used in the
relevant literature.

There are those who use the word monopoly when they ought to use the word oligopoly.
There are those economists who use the word monopoly if a firm accounts for more than
33% of market sales.

M. P.:
No there aren't.

R. A.:
It's there, in the pertinent literature, especially concerning monopoly competition.

There are those who believe that a firm can be called a monopoly only if that firm accounts
for 100% of market share.

M. P.:
And they are correct.

R. A.:
Yes, they are correct in their literal usage. But, there are theorists of monopoly competition
who employ the word monopoly less literally, less precisely, and more figuratively, more
descriptively, more graphically, etc.

M. P.:
You can use the term effective monopoly if a firm has a very large market share.

R. A.:
That's a word I do not remember coming across. It sounds a lot like a successful, operative
monopoly. But, whatever floats your boat.

And yet, the word effective can be taken to mean successful, credible, plausible, logical, actual, etc. Effective can also mean virtual, which is perhaps the meaning you prefer. But
most people just take what is near enough to be called an effective monopoly to be to all
untents and purposes a monopoly. What is a virtual monopoly can be considered virtually
a monopoly, or all but a monopoly. If it's a monopoly in effect, then what's so wrong with
just calling it a monopoly.

There are uses of the word monopoly which do not satisfy the theoretical meaning of
monopoly; and so, it is understandable that the apologists of capitalism get rather upset
with a use of the word that is less than concurrent with the theoretical and strict sense of
the word. If people were as concerned about the strict literal meaning of socialism, then a
lot of discussion, debate, and disagreement could be avoided.

M. P.:
It is understandable that anyone gets upset when you use words to convey meanings they
don't have. I spent years learning english and you sir, are attempting to destroy it.

R. A.:
That is a wild accusation!

Tell us: Who gets to decide the meaning a word must convey?

Perhaps the ideological capitalists can sympathize with the ideological socialists who
get very upset when the name of socialism is mindlessly attached to, and associated with
totalitarian-statist régimes. Not every capitalist believes in natural monopolies, and not every socialist believes the state is necessary.

M. P.:
Socialism is statist.

R. A.:
If I think and say that socialism is not statism, then how does it come about that your
convenient identification of socialism with statism is the only correct meaning of
socialism?

If the majority meaning of socialism is statism, then it seems that, in your opinion, when it
comes to word-usage the majority's usage rules. The minority's usage has no right to be.

M. P.:
The only way you have been able to discribe a socialist system without calling it statist is
to redefine state arbitrarily.

R. A.:
I have never been accused of having an arbitrary definition of the state. You have never
contested my definition of the state.

I ask you: What arbitrary definition of the state have I used or offered?

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"Time heals griefs and quarrels, for we change and are no longer the same person."
-- Blaise Pascal