Fear on the Free Market?
Monopoly? Most people may say they are bad for consumers, they give a business too much power, and overall we should fear them. In his speech to OSU Free Enterprise society, Dr. Per Bylund lays out a case for why we should remain skeptical in the fear of "monopolies".
In fact, Dr. Per Bylund tells us to look at monopolies from the opposite end. Instead of thinking "monopoly" and simply applying only to large and powerful corporations, look to yourself and realize you are also a monopoly. You provide a skillset no one else does and have the opportunity to capitalize off that.
Dr. Bylund shares his approach as to why we should not fear "monopolies". Dr. Bylund shares stories and examples from the smartphone industry and the Apple I-phone we are all familiar with today to show as to why monopolies are not intrinsically bad.
In the case of the market for phones, Dr. Bylund uses the example of the i-phone today. Many times, people sleep on the sidewalk to get the new phone on release day. They are not forced to sleep there nor are they forced to even buy an I-phone at all. The Apple company does not have a monopoly on the phone industry, they are merely the best competitor. The introduction of the smartphone from Steve Jobs pushed out flip phones and flip-phones pushed out landlines. Nokia used to be the best and now it is Apple.
Why? Not because Apple has a monopoly on the market, there are competitors and different options for phones, but because there is high enough demand for their phones. There is nothing keeping competitors from entering the market with different versions, prices, etc., yet people continuously choose I-phones because they are the "best". (I say "best" subjectively, as this is what people who buy iPhones think and why they buy them). There is a market for these smartphones at the current pricing and quality.
No Need For Fear, The Free Market is Here
Dr. Bylund says there is no reason to fear these large corporations, as long as their power is controlled. As long other competitors can enter into the market, the bigger corporations have less price control. If Apple were to raise their prices an absurd amount, Samsung would undercut the price and continue to release similar smartphones to the I-Phone that would take away the demand for the phones from Apple.
Dr. Bylund also makes the point that just because they are the first innovator, does not make them the bad guy. Without these first innovators or entrepreneurs nothing would ever improve. Entrepreneurial value is important to innovation and if a business or organization becomes too flippant with their quality, products, or pricing they will be phased out. Just like Nokia or the countless other brands that have replaced each other as time progresses.
The time to fear is when the power of the monopoly comes from the fact that there are no other options. Such as when utility companies have a monopoly since the government does not allow for other people or businesses to sell or provide the service. Dr. Bylund believes that the government oversteps their power by enabling these monopolies and not giving the people the choice.
Conclusion
Overall, I found that Dr. Bylund's speech could have used more time or dedicated time to a rebuttal. I thought that his choice to use the I-phone and the market for smart phones to be weak in terms of his argument for monopolies. I think that we should be afraid of monopolies and that in the U.S we live in the comfort of knowing that most markets are open to who ever has the means and will to join.
The true monopolies we face, are often regulated and for good reason. If anyone could open up shop and provide natural gas to others, unregulated, it could lead to disastrous consequences. Natural gas is also harder to produce, so if left unregulated there would be little from keeping an extremely wealthy business or corporation from buying all the natural gas resources, and completely distorting prices. At least when the government federally regulates something, the government has to answer to voters and not shareholders. The price of natural gas is very deliberate and companies such as ONE Gas must be able to support fluxes in price in court. Their prices are based on limitations set by the government and (weirdly) change in temperature.
On the flip side, Big Pharma is its own beast. They do have some government control but that does not keep them from charging insane prices for things such as insulin. We as citizens are almost forced to have health insurance, we are not required to have it, but the consequences can be costly. Paying out of pocket for health related costs is not feasible and it is almost impossible to live with out some form of healthcare.
If the government were to completely open the market and not have high entry barriers to pharma, the incidents that could occur would also be disastrous. So far, the only good thing to come out of the pharameticual industry recently was the cost plus drugs company from Mark Cuban. It also goes to show, the difference in cost of the drug and was it is sold for by other companies and the insane un-needed added cost.
To answer the question set by Dr. Per Bylund, we should fear true monopolies. We should not fear the large companies that operate on the free market.
Works Cited
Dr. Per Bylund. (2022, Feb. 15). Monopoly Power: What Should We Fear?. [Video]. Facebook: https://www.facebook.com/okstate.fes/videos/539962257140227