The theory of natural monopoly is an economic fiction. No such thing as a 'natural' monopoly has ever existed. The history of the so-called public utility concept is that the late 19th and early 20th-century 'utilities' competed vigorously, and like all other industries, they did not like competition. They first secured government-sanctioned monopolies, and then, with the help of a few influential economists, they constructed an ex post facto rationalization for their monopoly power. ... The theory of natural monopoly is a 19th-century economic fiction that defends 19th-century (or 18th-century, in the case of the U.S. Postal Service) monopolistic privileges and has no useful place in the 21st-century American economy. |
