What is Monopoly Power?
First off, Dr. Bylund defines monopoly as “one seller,” which makes sense given that the prefix “mono” means one and it is describing how many sellers there are. But when he was defining power, he was not exactly being straightforward about it. He made it seem as though power is subjective and relative to the subject you are talking about. He gave an example of a car salesman and someone selling a pack of gum, the car salesman has more power because cars have more power and weight of importance over a stick of gum (to most adults anyways, I am sure a few five-year-olds would beg to differ). Power is also based on how badly you may want something; later in the lecture he does give a more specific definition of “power comes from when there is no choice or there is not allowed to have a choice in goods,” in terms of like building tenants and facilities or services. The lack of a real definition of power is interesting because that is what his argument, that monopoly power is not a bad thing, is solely relying on.
Is Monopoly Power Bad?
Dr. Bylund would argue that monopoly power is not a bad thing; he believes that “any innovator is a monopolist,” and that power is just describing a monopolist because, without power, the word monopoly would just be a title held with no weight. He gives Steve Jobs and Apple as his main example throughout the lecture. Because Steve Jobs led the way to the rise of smartphones, Apple was the poster child for a “Monopoly Power” company. His innovation alone almost virtually put the flip phones out of business, and yet they did not stay a monopoly for long. Soon, Nokia, Motorola, Samsung, and a few others had their smartphones out for competition and using Dr. Bylund’s definition of a monopolist, Apple no longer was a monopoly power company, even though they still have the leading smartphone sales, and like Bylund likes to point out, very dedicated followers. Because consumers have the choice between multiple different smartphones in today’s market, Apple does not hold the power that it used to when they were a monopoly. So, all of that being said, if we believe Dr. Bylund’s definition and explanation through an example, monopoly power is not bad when given a choice between different products, it is actually very good and competitive for the market and benefits the economy.
Actual Thoughts
While I can agree with the points and arguments that Dr. Bylund made in his lecture, if you could even call it that, I did not really learn much because it was hard to follow. The lecture itself was more like a Q&A session more than anything, which is fine, but for someone like me who has very little background information on the topic, the questions and tangents he was going off on made me feel lost and I did not get very much out of it. Though there were a few things that I still found interesting from him, the first being the notion that if a monopolist begins to raise their prices, it is an almost sure invitation for other monopolists and entrepreneurs to compete with them for consumers and title of “the best.” It may seem like common knowledge to most, but after hearing it, it makes total sense. Again going back to the Apple example, when buying a phone, or any product for that matter, from them, it is almost guaranteed that there will be campers the night before waiting to be the first to get their hands on the product. And though they already charge a pretty penny for any of their items, they are still the leading competitors, in smartphones and tablets at least, proving that their customers will continue to buy whatever price they sell it for. However, and Dr. Bylund poses this question as well, what would happen if they doubled or tripled the price of their iPhones? Do you believe that there would be a competitor ready to take their spot in the rankings for making the exact same quality phone for a fraction of the cost? And would people buy it? I think in this economy they would, simply because only the top 5% would actually be able to afford Apple’s prices. And although Bylund gives a good definition of monopoly power with the stipulation that power is only derived from the lack of choice, I still think that even if there are choices, societal power is still a stronger influence and companies take advantage of it and grow their monopolies based off of it.
Image Citation
Yang, Jessie. “A Regulator’s Perspective on Monopoly Power - Business Review at Berkeley.” Business Review at Berkley, 2019, businessreview.berkeley.edu/a-regulators-perspective-on-monopoly-power/.
