Monopoly Power
Dr. Per Bylund discussed the concept of Monopoly Power in his lecture, Monopoly Power: What Should We Fear? and what gives a monopoly that power. He begins by discussing what he believes a monopoly is, how an innovator is a monopolist, and how we have a monopoly of selling our own personal labor. Monopolies are simply “one seller”, and without the power aspect of the idea, monopoly is just a description instead of, what he calls, “a bad thing”. Throughout his lecture, he explains how monopolies are fine in of themselves, it is when there is power in monopolies brought through restriction that the problem arises.
People buy things not because they are coerced to buy them, but rather because there has become a desire and a want for certain products. Monopolists become monopolies when they as innovators try and satisfy the wants and needs of the consumer. This isn’t a bad thing, we still are only looking at monopolies without the concept of power tied in. Now that the innovator is creating products that they hope satisfy the consumer so that they will buy what they are selling, there comes competition. Competition is important in monopolies because it constantly keeps each innovator and market in check. This is done by new markets coming in with a better product or a cheaper product than their counterparts, and one market or the other is going to eventually “win out” the other before the cycle continues with new markets. Dr. Per Bylund explains that when a new market comes in, their product has to be either cheaper than the market they are competing against or it has to be a totally new and better product than what is currently being sold. This creates a constant ring of new innovators trying to create new products and cheaper options and makes a constantly changing market. This competition is still not the issue with monopolies.
Now that Dr. Per Bylund has laid out what monopolies are and how they in themselves are not inherently bad, he begins to discuss what power even is before figuring out why power is the problem in monopolies. He begins by describing that power is where there is restriction. Power is held by the people who hold the only viable option. If other markets and other innovators are suddenly told that they can’t create a competitive market, if they are told that only certain people can sell certain things, there is where a power lies. If only one person is allowed to sell something there is no competition, which means that they have the power to hike the price of their product up, lessen the quality, and nothing can be done. Because if they are the only allowed option, they have the thing that people need and now can hold it over them. And this, Dr. Per Bylund states, is where the problem is found in power monopolies.
In Dr. Per Bylund’s lecture, he talks about hospitals and medical care, and how this is a power monopoly because the government controls it. What happens in a situation where there aren’t regulations on things like healthcare? While there is bad healthcare and doctors now, would the problem not become worse if there weren’t regulations by law for specifically healthcare? Because then there are going to be people starting healthcare practices without the screening and regulations that they have to now, and couldn’t this then make healthcare malpractice become a widespread issue? Other than hospitals, what is the line where no regulations by law are drawn?
When a market gets more and more traction by the consumer, and suddenly they have a portion of the market and connections, is this not a way to stifle out competition and then also creates an imbalance without regulations? Because if a monopoly has the ability to buy out advertisements and people and businesses, would that not push all the attempts at a new competitor out of the market? And is this a version of power monopolies, even though this is not made with regulations? Would this also be considered the way to gain power because they seem to be the only option because they are knocking their competition away before they even have a chance to compete? In his lecture, Dr. Per Bylund posed the question what if other business’s cant be added? Is this referring to this aspect? Or is that comment still in line with his idea of the government saying that there is a law that other businesses can not be added?