Coercive monopoly: Difference between revisions
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all coercive monopolies are not government granted monopolies so it was improper to redirect this page to "government-granted monopoly" |
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==Coercive monopoly== |
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A '''coercive monopoly''' is a monopoly that arises and persists as the result of any sort of activity occuring in the marketplace that violates the principle of a ''[[free market]]''. Since a ''government-granted monopoly'' is sustained by preventing free competition by law backed by the threat of force, it falls into this broader category. An example of this would the the United States Postal Service. If any firm competes with the particular kind of service that the "post office" provides (delivering letters to mailboxes), force will be initiated against the competitor, thereby thwarting the operation of the free market. The term also applies when a firm receives government subsidies which effectively preclude profitable competition. "Coercive monopoly" also applies to coercive influence by firms themselves to prevent competitors from entering the market, such as extortion. Distinguishing monopolies as occuring as a result of thwarting free market principles is typical of those who advocate [[economic liberalism]], such as ''[[libertarians]]''. |
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Revision as of 20:13, 30 December 2004
Coercive monopoly
A coercive monopoly is a monopoly that arises and persists as the result of any sort of activity occuring in the marketplace that violates the principle of a free market. Since a government-granted monopoly is sustained by preventing free competition by law backed by the threat of force, it falls into this broader category. An example of this would the the United States Postal Service. If any firm competes with the particular kind of service that the "post office" provides (delivering letters to mailboxes), force will be initiated against the competitor, thereby thwarting the operation of the free market. The term also applies when a firm receives government subsidies which effectively preclude profitable competition. "Coercive monopoly" also applies to coercive influence by firms themselves to prevent competitors from entering the market, such as extortion. Distinguishing monopolies as occuring as a result of thwarting free market principles is typical of those who advocate economic liberalism, such as libertarians.