Introduction
The word monopoly holds a lot of weight in the United States. I commonly associate the word with the robber barons of the 19th century who ruthlessly sought to create the most effective economic system to maximize profits and minimize competition despite the plight of those who worked for them. Because of this history and for other important reasons, America is fearful of these systems. In fact, the US government monitors companies to ensure they will not grow too large and take over an industry. A recent case of this occurred with AT&T. The government believed that AT&T broke anti-trust laws preventing competition, so they were forced to dispossess 23 of their local telephone companies into 7 regional companies known as ‘Baby Belles’. Monopolies can drive the economy, however pursuit of the dollar at all costs has both positive and negative effects for the consumer and the employee.
What is a Monopoly System?
A monopoly system according to the speaker is just one seller. This can be both good and bad. An inventor is essentially creating a monopoly because they have the only product on the market. We are all also monopolies in that we are all different laborers with a variety of different skill sets and personalities. However, we as consumers have power over them with our money. We can choose to not purchase a product if we do not believe it is worth the price or we are not interested. Therefore, we give the monopiles’ power with our dollar. When no one else is allowed to sell certain products, the economy can become very inefficient. Companies stop trying to deliver the best possible product at the lowest possible price so that consumers will choose their product. A monopoly tries to produce the best possible product at the most efficient time and at the lowest price, which is the best deal for the client but has other repercussions to be considered. Monopolies have some benefits, but there are also huge drawbacks to be considered.
Benefits of a Monopoly System
Monopoly systems can be very beneficial for the economy. Monopolies specifically try to push to satisfy the consumer over all else so that they will pick their product. Inventors essentially start monopolies because they ae the only ones who know how to create that product. As more people gain the technology, the inventor is forced to compete through prices, quality, and new technology to get the consumer to choose their product. By raising the price, other companies are invited to compete with the product. Therefore, overtime are there ever truly any monopolies? More competition is never a bad thing for a consumer. Therefore, companies becoming bigger, gaining more resources, and gaining more influence could be a good thing for the consumer. These companies still have to offer competitive pricing and goods so that the consumer will choose them, and they have the resources to do so. Therefore, monopolies can drive competition driving prices and new products that benefit consumers.
Drawbacks to the Monopoly System
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When one company is given whole control over an entire service or industry, there is no competition to drive the market and companies become very inefficient and collusion is more likely. Monopolies are not necessarily about size about rather the power they control. In the 19th century, we see how monopolies with too much power can hurt industry and the consumer. The robber barons used their immense wealth and power to not pay their workers a livable wage, dangerous working conditions, and long hours. The workers’ compensation for injuries, unions, a clean working environment, limits on minors’ working hours, and more regulations were all born out of this time. While regulations can hurt the economy and affect competition, they do protect the workers and the less fortunate from being taken advantage of. The monopoly system was used to prey upon immigrants who did not have any better options. These people were given very little income, lived in tenements with barely any space, faced poor working conditions, and many more hardships caused by the lack of regulations. These monopolies would do anything to cut costs to the detriment of the people. Therefore, while monopiles can help the economy, they must be regulated to protect the workers. Without these regulations, monopolies will do anything they can to cut costs and save money.
Conclusion
Monopoly systems can do both good and bad for the consumer. Monopolies push companies towards competitive pricing, goods, and services. When other companies enter the market, monopiles must continue to lower prices to offer competitive services. However, monopolies can also easily have too much power and influence over the economy and government. This can lead to poor working conditions and poor wages that ultimately affect the consumer. Therefore, monopiles are not necessarily a bad thing for the economy but they do need to be regulated to ensure they do not gain too much power and influence.
