Dr. Per Bylund claims that monopolies are not a bad thing. I would have to agree with this claim. He claims that market power is inevitable just like we as humans “sell our labor” as work. Monopolies can occur when there is a new innovator, which is an essential contributor to societal advancement. The term “monopoly” itself only implies a number of businesses, which isn’t a negative thing on its own. I believe the connotation of what comes with the word monopoly still holds true. The power that this solidates choices can still be very effective in urging consumers to purchase a certain product. However, there is still always the choice to not give business to a monopoly.
The company that has a monopoly wants the money of a consumer more than they want to keep the product that is being sold. The question that it comes down to is essentially whether the person, as a consumer, wants the product more than keeping their money. Now I will admit that it is not always this simple. Things are not simply purchased because people want the product because of its value or usefulness. Peer pressure and conformity are motivating factors in purchases. More often than not, things are not purchased simply because the consumer thinks they need the product. That product will make them appear smarter/richer/cooler to those around them, or they do not want to settle for a lesser product that will fill the same need. But the principle still stands that there is a choice. I also believe that making the choice to not purchase from a monopoly will leave the person with an alternative of lesser value in most cases. For example, a leasing company owns and rents out a majority of houses in a town. On all the houses owned by this company, they can choose to provide low-quality customer service, poor maintenance, high prices, and slow response times. Sure, a renter has the option to lease from a different company, but these options are limited and when they are taken, the renter has no other choice but to rent from the company that owns the monopoly. Not to mention, the few other options will likely fall behind the monopoly’s properties in terms of availability and quality.
The companies in the same markets as monopolies didn’t innovate as the monopolists did by learning how to satisfy consumers with a new good. There is always the option to make a competing good that is innovative as well. For example, apple makes iPhones which are smartphones. Companies such as Google and Samsung have made their own competing smartphones as well. Taking advantage of this competitive market and the opportunity to gain power is a huge part of a free-market economy and its incentives. This is the point Dr. Bylund is making when he says that monopolies and power are not inefficient. This innovation has to be started by someone in order to inspire the other companies to excel too. Often, these monopolies don’t last forever. They are then outcompeted in the future by another better, more competitive product. There are multiple ways to compete: by providing another product or by making an existing product better priced. These aspects keep businesses always in healthy competition. Monopolies can't raise prices too much or other companies can come in and steal customers that have been pushed past their limit of what they deem “worth it”.
The problem with a literal monopoly is that there is no competition at all. Then consumers are forced to pay whatever price is set, regardless of what it's worth. However, this is extremely rare in a free market economy. Any issues that may come up such as the wages they pay their employees, political power, and higher prices are very limited in a country like the United States and the economy that exists in countries like it. So, when there is a “monopoly” but not a monopoly in the literal sense of no other options, consumers still have a choice to not give the power to these companies from which the issues arise. The question that exists is whether these risks are worth the reward that monopolies bring. I would say that they do. Monopolies provide incentives for innovation, bring success to society, and are not permanent. I think that it would be practically impossible to have a market without monopolies occurring. Competition for power is a healthy thing that stimulates growth and advancement. Without incentives to grow, a market would be held back and stay stagnant.
