Questions about Monopolies December 4 2009
I’d like to know what the average person thinks about monopolies? Do they have a positive or negative view of monopolies?
Generally, we know that monopolies will do whatever they can to drive out any competition. We also know that once a monopoly is established, the price that the consumer pays for the service or product goes up. One reason being because of a lack of credible competition. Also, once a monopoly is established innovation usually dies. Again, there’s no reason to innovate when you don’t have to worry about a competitor taking your market share.
The government, throughout our history of the 20th century has believed and acted on the idea that monopolies are bad – that’s why there are laws that highly regulate monopolies or businesses that appear to be a monopoly and numerous lawsuits attempting to break up monopolies or what the government perceives as a monopoly – i.e. Bell telephone, Microsoft, etc.
Considering all this, why would the same people who oppose a monopoly in the private sector be fully supporting a government created monopoly when it comes to health insurance? Do these people believe that a government monopoly will create lower prices? Why? Based on what? Why would a government monopoly work different than a private sector monopoly in delivering services? Can you point to an example of a government monopoly reducing costs anywhere else?
Do these people believe that a government monopoly would keep the US on the cutting edge of medical innovation, research and development of new wonder drugs, etc? If so, why would it be done differently than a private sector monopoly?
Why is a private sector monopoly considered bad, but a government created monopoly considered good? There is inconsistency.
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Comments, compliments or complaints?
Bill Shaw Dec 4
Blockbuster Video did just this in our area…they lowered their prices to knock out the mom and pop video stores, then raised their prices through the roof (over 5 bucks/video)
They are slowly shutting down now, and the “redbox” has taken over as the video monopoly in our area…how soon until they raise their prices?