SamuelRSmith said:
1) Just about any economist worth their salt, from Keynesian, to Chicago, to Austrian, will tell you that monopolies form when barriers to entry into a market are high. Thus, the higher the barriers to entry, the more likely monopolies are to form. Regulations increase the barriers to entry. 2) Diseconomies of scale act as a natural check on monopoly power in a free market. I guess you haven't worked in a large corporation before. Talk to people who have, and ask them about the bureacracy and internal management struggles that go on. Truth is, there's no way that they could compete against any startup without all the artificial barriers protecting existing industries, and various Government subsidies that keep them in profit. The corporation I work for, now spends 60% of it's multi-billion dollar budget on regulatory compliance. Think about that. How could any new entrant to the market possibly hope to legally compete. 3) The most extreme example of this can be seen in drug prohibition. They aren't called "cartels" because the name sounds cool. |
Some regulations protect competition, some advance monopolies. Truth remains, if you're in a completely deregulated economy, being an ambitious young company won't do you any good if large monopolies will try to squash you by any means necessary.
In the earlier stages of capitalism, where regulations were few or nonexistant, there was a clear and undeniable tendancy towards monopoly. From industrial to banking monopolies.
