The word monopolies has negative connotations in economic history, but recently monopolies have been praised by people such as Warren Buffett an Peter Thiel. The arguments for and against are not new, but some of the arguments for and against now have better empirical support.
Yes: Monopolies are good for the economy
Monopolies provide capital for R&D and incentives to entrepreneurs.
Monopolies stimulate capitalism
Without monopoly type profits, there would be little incentive to innovate.
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Monopolies can invest in innovation
Perfect competition erodes returns leaving little for R&D
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No: Monopolies are damaging to economies
Monopolies choke economies: competition is central to a healthy economic system
Monopolies reduce entrepreneurial activity
Rising product market concentration leads to a collapse in entrepreneurial activity
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Monopolies reduce wages for workers
Monopolies or tight oligopolies have "pricing power"
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Monopolies lead to higher prices
With no consumer choice, companies have pricing power.
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Monopolies reduce innovation
Monopologies have no need for innovation to stay ahead.
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Oligopolies behave like monopolies
Concentrated oligopolies are just as bad for economic growth as monopolies
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This page was last edited on Sunday, 4 Nov 2018 at 16:53 UTC
