How to deal with natural monoloplies?

[Machjo]

For those who don't know what a natural monopoly is, you can read about it here:

Natural monopoly - Wikipedia, the free encyclopedia

Essentially, it's a monopolistic company engaged in a naturally monopolistic industry, an industry that gravitates towards monopolization naturally, even in the absence of criminal activities or corruption or unfair competition, since it naturally functions more efficiently as a monopoly in the free market. Common examples of monopolistic industries are those that depend on a common and compatible infrastrucutre, such as road networks, municipal water systems, telecommunication networks, etc.

Essentially, without government regulation, if left to the free market, the largest company in such an industry has economies of scale as an advantage against the competition, leading to its growing until it finally sqeezes all competition out of the market. Among solutions I could see are the following:

1. Leave it to the market. A company will eventually monopolize the market, and yes it could then exploit this power unfairly, but so be it. That's how the market works.

2. Nationalize it. That way the people still have a say in how it is run through an elected government, and this thus prevents such companies from expoiting their monopoly status unethically.

3. Transform it into a consumers' co-op. If all clients of the company's must buy voting shares, then that means the consumers own the company and get to vote for the board of directors, thus preventing unethical abuse of its monopoly status.

4. Hyper-regulate it. Leave it privatized, or privatize it, but let the government regulate what it can do, how much it can charge for services, etc. If the company becomes too hegemonic, the government can even force it to sell parts off, or even split, or limit its area of operations to specific geographical areas, resulting in many local monopolies.

5. A combination of 3 and 4 above, whereby consumers' co-ops would exempted from the hyper-regulation that comes from government anti-competition laws (besides, if it's owned by the consumers it serves, then it cannot be dangerous even if it does become a monopoly), whereas any other company would be subject to them.

So which do you think is the best solution to dealing with natural monopolies?

My favourites solution would be 3 above (and 3 is the one I vote for in the poll). 5 would be my second preferred option, and 2 my third. 4 would be my fourth option, and 1 would be my last.

 

[L Gilbert]

Competition laws. The reason being that the people are the governments' prime interest, not the welfare of some company.

 

[Liberalman]

Monopolies pay good dividends and get products or services for a lot cheaper because any body that sells to them will get a bigger sale

 

[L Gilbert]

They also have total control over pricing. IOW, the ability to stick it to the people any chance they get. Something like the oligopoly the major oil companies have. Or Canadian banks.

 

[Trex]

spell check.

 

[L Gilbert]

Your spelling looks fine, Mr. Trex. One thing though. Capitals are used as the first letters in sentences. lol

 

[Cliffy]

Competition laws. The reason being that the people are the governments' prime interest, not the welfare of some company.

You are speaking idealistically I hope. We live in a corporate dictatorship. Corporations are only interested in the bottom line and people's health and environmental degradation do not fit into the equation. People only count once every four years when millions are spent to brainwash them into voting whichever way the money wants them to.

We don't get to choose the pack of degenerates that are presented to us to vote for. They are basically appointed by the same money no matter which party affiliation they have. That same money owns the media that force feed most people their political views. The number of people who actually form their own educated view are few and far between. Sheeple vote governments out of office, rarely voting one in. That is why our political system is degenerating into chaos.

Just look at logging in BC. The concerns of the corporations have always trumped the concerns of the people. If they look like they are losing ground on a contentious area they dump millions into a propaganda campaign to make their opponents look like radicals, misfits and degenerates. The media is constantly slanting their "news" coverage to slander legitimate concerns.

 

[L Gilbert]

You are speaking idealistically I hope. We live in a corporate dictatorship. Corporations are only interested in the bottom line and people's health and environmental degradation do not fit into the equation. People only count once every four years when millions are spent to brainwash them into voting whichever way the money wants them to.

We don't get to choose the pack of degenerates that are presented to us to vote for. They are basically appointed by the same money no matter which party affiliation they have. That same money owns the media that force feed most people their political views. The number of people who actually form their own educated view are few and far between. Sheeple vote governments out of office, rarely voting one in. That is why our political system is degenerating into chaos.

Just look at logging in BC. The concerns of the corporations have always trumped the concerns of the people. If they look like they are losing ground on a contentious area they dump millions into a propaganda campaign to make their opponents look like radicals, misfits and degenerates. The media is constantly slanting their "news" coverage to slander legitimate concerns.

Idealistic in that people should be gov'ts' prime concern.
However, if people want to they can prod gov'ts into doing stuff, though. So getting gov't off its lazy fickle ass and making corporate fairness laws or competition laws isn't idealistic. Our favorite culprit for exampling public influence is Switzerland. The people really do have the last word there. hhhmmmm Getting Canucks off their lazy behinds may be a problem. Perhaps you are right; I am being too idealistic.

 

[L Gilbert]

Um, what's an unnatural monopoly?

 

[Machjo]

Um, what's an unnatural monopoly?

An unnatural monopoly would be a company that becomes a monopoly but not necessarily owing to a natural market tendency.

An example would be a restaurant chain. If anything, a small family-owned restaurant can have an advantage over a large conglomerate owing to the larger bureaucratic overhead of that conglomerate. After all, it's not like the restaurant needs to plug into any kind of infrastructural network, except sewer, electricity, water, cable, internet, etc., like any other building.

Though I could be wrong, too. A conglomerate of restraurants might be able to negotiate a better price for things too.

But I guess in principle, an un-natrual monopoly would be one that, if left to the market, would not likely gravitate towards a monopoly status on its own.

 

[Machjo]

One think I like about the consumers' co-op option is that it would give all consumers a direct vote on the board of directors. This would also help alleviate responsibility from the shoulders of politicians so that they can focus on other things instead.