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Currently, in the present day, I can only think of the TVA and the Long Island Power Authority, but those are government-owned.

asked Jan 27 '12 at 22:33

Collin1's gravatar image


It depends on what you mean by "monopoly." If you mean a trust/corporation/organization that, through talent, efficiency and hard work, held an overwhelming market share, then yes. The one that comes first to mind (probably because Rockefeller is one of my biggest heroes), is Standard Oil. If, however, you mean a COERCIVE monopoly, one in which the dealers and customers had NO CHOICE but to deal with the interest involved, then no. The reason for this is that without government intervention such a monopoly would not be possible in the private sector. The free market would not allow it.

(Jan 28 '12 at 02:03) Radicap ♦ Radicap's gravatar image

We have to draw a distinction between coercive monopolies and earned monopolies. An earned monopoly is a company that holds an overwhelming share of a freely competitive market. There have been multiple instances of such companies in American history. Some have already been mentioned: Standard Oil, Alcoa, IBM. (I question AT&T; while I don't know the history in detail they were certainly a regulated and government protected monopoly for a significant part of their existence.) Such companies earn their dominant market share by producing more efficiently over a long period than their competitors; if and when their competitors up their game the earned monopoly can be lost. An example of this in the modern era might be when Juniper Networks broke Cisco's earned monopoly in the router market around the turn of the century.

There have also been privately-owned coercive monopolies -- private companies which have held overwhelming market share because of special privileges or protections granted to them by government. The so-called Big Four railroad barons who effectively controlled railroad access to California in the late 1800's are an example. Cable TV companies are a modern example; they are privately owned but usually operate under local franchise monopoly grants from municipal governments that block other companies from providing competing cable service in the area.

Objectivism holds that earned monopolies are not problematic -- they are a sign of great productive ability and thus a reward of virtue. Coercive monopolies are bad because of the government violations of economic liberty that are required to create and sustain them.

answered Jan 29 '12 at 23:56

Kyle%20Haight's gravatar image

Kyle Haight ♦

I have to disagree with Kyle's claim that there have been privately-held coercive monopolies, for one reason. Once the government "helps" a company, they tend to take control. It starts slowly, with little "suggestions," but soon it's a government-run enterprise. A good example is NASA. It started private, but then it started receiving government funding and, slowly and steadily, it became state-run. Coercive monopolies may start out private, but once the government gets involved (which it has to for them to be coercive in the first place), they won't be for long.

(Jan 30 '12 at 00:32) Radicap ♦ Radicap's gravatar image

Government control is not the same thing as government ownership; if it were there would be no distinction between fascism and communism. The question was whether had been "privately-owned" monopolies, and the answer to that is clearly "yes".

(Jan 30 '12 at 01:00) Kyle Haight ♦ Kyle%20Haight's gravatar image

Point taken.

(Jan 30 '12 at 02:16) Radicap ♦ Radicap's gravatar image
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Yes, but they weren't coercive monopolies (which are the bad kind): Microsoft, Alcoa Aluminum, IBM and AT&T, to name a few.

answered Jan 28 '12 at 06:53

Rick's gravatar image

Rick ♦

Private monopolies cannot exist for an extended period because they become bureaucratic and inefficient as they grow making them susceptible to competition. The Microsoft monopoly became irrelevant with the rise of Google and the Open Software initiative which together severely curtailed Microsoft's power. Alcoa's monopoly ended in the 40's with the rise of Reynolds and Kaiser. Alcoa's initial monopoly arose from their patents on the electrolysis process. Patents grant short term monopolies.

(Mar 26 '13 at 12:18) Dave_F Dave_F's gravatar image

IBM's monopoly was broken in the 70's with the rise of DEC and DG which were later crushed by the likes of Dell, HP, Samsung, Apple, Gateway, Toshiba, etc. AT&T was an explicit government granted monopoly, hence it is a great example of the requirement of government protection for a monopoly to exist for an extended period.

(Mar 26 '13 at 12:19) Dave_F Dave_F's gravatar image

The Microsoft monopoly became irrelevant when Apple Computer and other competitors convinced the government to stifle them with antitrust litigation, culminating about the time when, in the wake of a court ruling to divide the company into pieces, Bill Gates resigned as CEO.

Steve Jobs even brags about it to his biographer, recalling a conversation with the lead prosecutor where he told the prosecutor they didn't want to break up the company, just slow them down with litigation in order to give other companies like Apple Computer a fighting chance.

(Mar 26 '13 at 12:42) anthony anthony's gravatar image
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Asked: Jan 27 '12 at 22:33

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Last updated: Mar 26 '13 at 12:49