When considering the term “monopoly,” the majority of western populations are left with a bitter taste in their mouth. Whether it is because of the titular board game that infamously lasts for hours or because of its association with mega, too-big-to-fail corporations, ‘monopoly’ has always been widely negatively received; however as explained in Dr. Per Bylund’s lecture, this may be a faulty attribution. The real evil of capitalism is not monopolies - it is power.
What is a Monopoly?
Before discussing the misconceptions behind monopolies, it is important to define what they are in the first place (and it is not necessarily an all-powerful company)! Instead, Dr. Bylund posits the idea that monopolies are simply singular entities, which by themselves are not inherently good or bad. For instance, each person capable and in possession of free will owns a monopoly over their personal labor, a statement which is considered largely positive. On a larger scale, another example of a monopoly, and one thoroughly explored by Dr. Bylund, is Apple and their product the iPhone. In the technology industry, they are the fore-running company, and while they have competitors, none have nearly as much prominence as Apple; therefore, it could be said that Apple holds a monopoly over the current phone market, and yet, this is no more sinister than the monopoly one holds over themselves.
This seems like two very distinct ends of the spectrum, and yet, what saves Apple from being entirely negatively branded is that competitors are easily able to enter the industry and provide their own product - Apple is not the only one allowed in. While Apple is the biggest, it may not always be the best - in fact, just 20 years ago Nokia was in the exact same position Apple is now, and yet it was dethroned when a new company entered the market with a product more desirable for consumers. These monopolies only exist because they are the best option for consumers, but the moment that desirability goes down, either through price raises or decline in comparative quality, a new company will rise to the top and take hold of the monopoly. Monopolies are a cyclical offshoot of the very nature of capitalism, yet their negative reputation must come from somewhere, a source Dr. Bylund identifies as power.
Power Corrupts
Power, as Dr. Bylund defines it, is the ability to preclude competitors from entering the market. In such a scenario, formed monopolies have no advantage to provide improving service or products to a consumer, as there are no market alternatives. Regardless of what they do, even if it decreases product desirability, they will still get sales as the ability for innovators to offer their service ‘better’ is impossible. But where does this power come from? As Dr. Bylund points out, it comes from governments.
While Apple is a beneficial monopoly due to its competitive markets, Dr. Bylund provides an example of the negative monopoly held by hospitals due to Certificate of Need (CON) Laws which require pre-existing hospital approval to build a new one. This naturally makes it much more difficult to enter the market, and as such competition is limited and exorbitant prices have become the norm in health care.
To finalize his lecture, Dr, Bylund further expands on this point by discussing political lobbying, and how this creates the phenomena of companies spending money on politicians to ensure their markets remain in their favor at the expense of consumers. In this manner, monopolies have gained a negative reputation through participation in political matters that ensures their success. It is not the monopoly's existence that is a societal net negative - it is their collusion with the government that harms society; however, is this not inherently anti-capitalist? Capitalism is all about free enterprise without government intervention; therefore, it is unfair to say that monopolies are capitalism’s boogeyman. Rather, they are socialism's, as that is the system which perpetuates government oversight of business.
Shades of Grey
And yet, while I have been in agreement with most of the points made by Dr. Bylund, there are a few criticisms I have of his thinking. For instance, take the previously discussed health care industry, and imagine there were no restrictions on who could open a hospital. Certainly, the issue of high prices would nearly vanish as thousands of competitors would enter the market; however, what would the quality of these competitors be? In other industries, this is not an issue, such as with phones. In this field, if a phone is poor quality, even if it is cheap, people will just simply not buy it, thus failing the company. However, healthcare is not a luxury - it is a necessity. People cannot simply choose to go without it, and by offering questionable services at cheap prices, it targets the poorer demographic that cannot afford the better services offered at a reputable and established hospital. This is a system easily taken advantage of, so some government oversight is necessary. While, yes, it will limit competition and hurt consumers economically, ensuring public safety and quality is necessary in these basic needs industries.
Another issue I take with his line of thinking is deeming antitrust laws as a societal negative. Dr. Bylund believes that, as long as a big company has competition, it will be forced to offer the best deal to its consumers. However, this has historically not been the case as seen in Standard Oil, which incited the creation of antitrust laws in the first place. It is often said that it takes money to make money, and for Standard Oil, they made so much profit that, when a competitor entered the field, they could simply slash their prices until their competitors were essentially run out of business. As soon as they were gone, Standard Oil could resume pricing at their leisure, giving them an essential monopoly where they could control who entered the market by manipulating their own prices. When monopolies grow this powerful, it can be nearly impossible to drive sales of a competing product, resulting in the necessity of antitrust laws.
Overall, I believe that Dr. Bylund is correct in his attempt to disentangle the web of monopoly and power. However, while this is a strong generalization to make of a capitalist society, it cannot be applied to every situation, and to attempt to overlook the nuance of desperation and necessity in society. Not all industries are created equally, so to conflate all monopolies as one-in-the-same is a dire oversight that ultimately undermines the validity of Dr. Bylund’s attempt to generalize his ideals.