Tuesday, April 8, 2014

Defending libertarianism: Monopolies

There is a certain amount of irony hearing people complain that a libertarian society would be controlled by monopolies. These same people support monopolies on law enforcement and contract enforcement. The state has created monopolies that control our money and our mail. In most cities, basic utilities like water, sewage, gas and electricity are controlled by government protected monopolies.

What is not important is if monopolies exist but if transactions are voluntary and voluntary transactions are not prohibited. There are few real monopolies that exist without government protection. At one point, Microsoft was declared a monopoly, and due to copyright laws it is to a certain extent, but Microsoft still faced competition. Microsoft's biggest competitor for its Windows operating system is actually older versions of that same system.

Antitrust laws are supposed to protect us from monopolies. Unfortunately these laws use coercion to force companies to behave the way politicians want. The anti-trust case against Microsoft was based on the fact that Microsoft integrated its web browser into its operating system. This means that the government went after Microsoft for trying to improve consumer experience.

Worse, antitrust laws ignore the reality of how firms form and expand to serve customers. This is documented by Alan Greenspan.

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