From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Tue Sep 10 2002 - 15:51:33 EDT
Jerry's comments below underscore the importance of distinguishing two senses of the term "monopoly"--the one used by Marx in describing a condition of absolute scarcity, and the one used by (e.g.) Adam Smith and the neoclassicals in describing a situation in which given market actors enjoy the power to *set* the market price for a good, rather than taking the market price as *given* (say, by the intersection of supply and demand). I understand Fred to refer to the condition of "absolute scarcity" invoking only the former, Marxian sense of "monopoly,"-- a sense in which notions like "collusion" and "cartel agreements" have no necessary place --rather than the sense that Jerry describes below. Gil >There is an interesting issue here that concerns struggles among >capitalists and struggles among capitalists and lardlords. You write >what landlords will not "allow". Certainly, they will resist any >attempts to break up their monopoly but it is in the nature of monopoly >that others will attempt to by-pass the monopoly through various means. >Of relevance here is the capacity of technological change to make >possible alternatives. E.g. diamonds have long (for several >decades) been manufactured. This represents a (potential) threat to the >diamond monopoly. Similarly, there have been methods developed to >extract gold from water. For this and other reasons monopolies >tend to be historically contingent and unstable. > >There have been other cases where an alternative technology is developed >that breaks the strength of the monopoly and/or creates another >(alternative) monopoly. Consider energy generation (e.g. nuclear, solar, >wind) and home heating alternatives. > >Moreover, monopoly power in terms of ownership of natural resources >often takes the form of cartels rather than just a 'pure monopoly'. >In this circumstance, while there are incentives for cartel members >to come to an agreement and stick to it, there are also short-run incentives >for individual cartel members to break an agreement (e.g. by selling >more or by selling at lower prices). Once this happens, then the >solidarity required for the cartel to function effectively tends to erode >and the cartel begins to unravel. > >At an more concrete level of investigation, it should also be noted that >ownership of these resources is often _not_ private but "public", i.e. >there is frequently state ownership of natural resources. (It should >even be noted that historically there have been 'extra-legal' examples >of successful efforts at monopoly breaking: e.g. the theft of pineapples >for replanting in Hawaii). > >In solidarity, Jerry
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