Based on the video by Dr. Per Bylund -- Monopoly Power: What Should We Fear?
https://www.facebook.com/okstate.fes/videos/539962257140227
Government-Derived Corporate Power and Monopolies
I appreciate everything that Dr. Per Bylund had to say, but I didn’t feel strongly about the message being taught here. To me, it almost feels like he was dancing around the point. Toward the beginning, I was excited for him to talk about businesses that have a monopoly within different markets, but I think he just kind of stated that he doesn't believe that businesses actually have a monopoly and then focused solely on the government's role in consumer choice. I do agree, however, that in many economies, corporate power does not exist in isolation. There is often heavy government influence. Government-derived corporate power focuses more on the advantages that businesses gain through government intervention, like subsidies, regulatory protections, contracts, and exclusive rights. When power like this is granted to a business with monopoly tendencies, it significantly boosts the impact on competition, market dynamics, and consumer choice.
Government Grants and Monopolistic Advantages
Some monopolies exist not because they outcompete rivals but because the government explicitly or implicitly grants them special privileges. There are many examples of this. Bylund mentioned public utility monopolies being energy, water, and telecommunications companies, which operate as legal monopolies because the local governments regulate them. This example is mainly regulated to ensure the consistency of service and development. Members of the audience also brought up patent protections. Pharmaceutical companies, for instance, benefit from government-issued patents that allow them to be the sole producer of a drug for a fixed period, reducing market competition. An audience member mentioned the vaccine brands that were mainstreamed for the COVID-19 pandemic. Another advantage example would be licensing requirements handled by governments. These licenses often require businesses in industries like transportation and news broadcasting to obtain licenses, which can create barriers to entry and limit competition. Bylund used the example of hospitals for this instance. While these protections might promote stability and innovation in some cases, they can also crush competition and create high prices for society.
Subsidies and Government Contracts
Certain monopolies arise because of subsidies or government contracts that favor one company over others. Looking at examples of this in bigger, more populated cities, we see that large firms in defense and technology receive billions in government funding. This obviously gives them a very favorable advantage in the market. Defense contractor companies like Lockheed Martin and Boeing have significant contracts with the U.S. government, making it almost impossible for smaller firms to compete. Large tech firms often receive government-funded research, giving them more opportunities for creating and innovating, while smaller companies cannot develop and compete. In rural cities, big agribusinesses receive subsidies that allow them to dominate food production, pushing out the smaller, local, and more sustainable farms. New entrants are very rarely successful in competing against government-supported businesses.
Political Influence
Political donations often help build monopolies through lobbying. The name for this example is regulatory capture, and it occurs when businesses hold financial influence over government agencies that are meant to regulate them. Major banks do this by influencing financial regulations to ensure new competitors have stricter compliance rules. Big banks can spend up to hundreds of millions on lobbying to try and shape financial laws in their favor. Another big example of companies that do this would be Google and Amazon. They send millions to politicians to advise them against antitrust regulations, keeping their market dominance. By using government connections to shape policy, these firms sustain their own dominance at the expense of smaller competitors and the consumers.
Real Monopolies
I guess my biggest complaint with the speaker in the video is that I could almost say he “clickbaited” us. I would argue that there are plenty of companies that don’t have government aid in their monopoly. Some companies are just innovative or trustworthy with a good reputation. I know that Nvidia (I only know about this because my roommate is a computer nerd), the Graphics Processing Units company, dominates the GPU market. They hold over 80% market share, primarily because of their superior technology, software ecosystem (CUDA), and AI acceleration capabilities. Unlike government-granted companies that receive patents or subsidies, Nvidia has simply outcompeted AMD and Intel in high-performance computing. By making its CUDA software the best the company could, Nvidia locked in developers and AI companies, ensuring that competitors couldn’t easily replicate their technology. Another example is Adobe, a creative software company. Now, I know this one because I’m a photographer, and I work in Photoshop, Illustrator, Premiere Pro, and Lightroom quite often. Adobe overpowers other professional creative software because its tools became the industry standard for many companies, making it difficult for competitors to gain traction. Unlike Microsoft, Adobe’s monopoly appeared because professionals adopted its software as the gold standard merely because of its high quality. The switch to subscription-based pricing through Adobe Creative Cloud locked users into long-term payments, making it a financial burden to switch.
I did not dislike the speaker or even disagree with him, really, but I think he could have acknowledged some real monopolies if he is going to title his lecture “Monopoly Power”.