Natural Monopolies?

—–Original Message—–
From: A
Sent: Tue 8/8/2017 6:45 PM
To: Walter Block
Subject: Re:

Greetings. Are you aware of any scholarly writings on the monopoly that utilities have? I’m reading something now from Stanford that is saying the natural monopoly state of utilities is good for consumers. I suppose my real question, without having enough knowledge to answer it myself, is: are the utility companies in this country REALLY NATURAL monopolies? My understanding is that there really is no such thing as a natural monopoly, and since there is licensure and state run regulation involved, I find it hard to believe these allegedly natural monopolies have, indeed, formed naturally.

Dear A: In my view, there is no such thing as a “natural monopoly.” For readings on this, see:

Anderson, et. al., 2001; Armentano, 1972, 1982, 1989,1999; Barnett, et. al., 2005, 2007; Block, 1977, 1982, 1994; Block and Barnett, 2009; Boudreaux and DiLorenzo, 1992; Costea, 2003; DiLorenzo, 1996; DiLorenzo and High, 1988; Henderson, 2013; High,1984-1985; Hull, 2005; McChesney, 1991; McGee, 1958; Rothbard, 2004; Shugart, 1987; Smith, 1983; Tucker, 1998A, 1998B

Anderson, William, Walter E. Block , Thomas J. DiLorenzo, Ilana Mercer, Leon Snyman and Christopher Westley. 2001. “The Microsoft Corporation in Collision with Antitrust Law,” The Journal of Social, Political and Economic Studies, Vol. 26, No. 1, Winter, pp. 287-302

Armentano, Dominick T. 1972. The Myths of Antitrust, New Rochelle, N.Y.: Arlington House.

Armentano, Dominick T. 1982. Antitrust and Monopoly: Anatomy of a Policy Failure, New York: Wiley

Armentano, Dominick T. 1989. “Antitrust Reform: Predatory Practices and the Competitive Process.” Review of Austrian Economics. Vol. 3, pp. 61-74. http://www.mises.org/journals/rae/pdf/rae3_1_4.pdf

Armentano, Dominick T. 1999. Antitrust: The Case for Repeal. Revised 2nd ed., Auburn AL: Mises Institute

Barnett, William, Walter E. Block and Michael Saliba. 2005. “Perfect Competition: A Case of ‘Market-Failure,’” Corporate Ownership & Control. Vol. 2, No. 4, summer, p. 70-75

Barnett, William II, Walter E. Block and Michael Saliba. 2007. “Predatory pricing.” Corporate Ownership & Control, Vol. 4, No. 4, Continued – 3, Summer; pp. 401-406

Block, Walter E. 1977. “Austrian Monopoly Theory — a Critique,” The Journal of Libertarian Studies, Vol. I, No. 4, Fall, pp. 271-279.

Block, Walter E. 1982. Amending the Combines Investigation Act, Vancouver: The Fraser Institute.

Block, Walter E. 1994. “Total Repeal of Anti-trust Legislation: A Critique of Bork, Brozen and Posner, Review of Austrian Economics, Vol. 8, No. 1, pp. 35-70.

Block, Walter and William Barnett. 2009. “Monopsony Theory.” American Review of Political Economy. June/December, Vol. 7(1/2), pp. 67-109; http://www.arpejournal.com/ARPEvolume7number1-2/Block-Barnett.pdf; http://www.arpejournal.com/

Boudreaux, Donald J., and DiLorenzo, Thomas J. 1992. “The Protectionist Roots of Antitrust,” Review of Austrian Economics, Vol. 6, No. 2, pp. 81-96

Costea, Diana. 2003. “A Critique of Mises’s Theory of Monopoly Prices.” The Quarterly Journal of Austrian Economics. Vol. 6, No. 3, Fall, pp. 47-62; http://www.mises.org/journals/qjae/pdf/qjae6_3_3.pdf

DiLorenzo, Thomas J. 1996. “The Myth of Natural Monopoly,” Review of Austrian Economics, Vol. 9, No. 2, pp. 43-58; http://www.mises.org/journals/rae/pdf/rae9_2_3.pdf

DiLorenzo, Tom and Jack High. 1988. “Antitrust and Competition, Historically Considered,” Economic Inquiry, Vol. 26, No. 1, pp. 423-435, July.

Henderson, David R. 2013. “The Robber Barons: Neither Robbers nor Barons.” Library of Economics and Liberty. March 4;
http://www.econlib.org/cgi-bin/printarticle2.pl?file=Columns/y2013/Hendersonbarons.html

High, Jack. 1984-1985. “Bork’s Paradox: Static vs Dynamic Efficiency in Antitrust Analysis,” Contemporary Policy Issues, Vol. 3, pp. 21-34.

Hull, Gary, ed. 2005. The Abolition of Antitrust. New Brunswick, NJ: Transaction Publishers

McChesney, Fred. 1991. “Antitrust and Regulation: Chicago’s Contradictory Views,” Cato Journal, Vol. 10.

McGee, John S. 1958. “Predatory Price Cutting: The Standard Oil (New Jersey) Case,” The Journal of Law and Economics, October, pp. 137-169

Rothbard, Murray N. (2004 [1962]). Man, Economy and State, Auburn AL: Ludwig von Mises Institute, Scholar’s Edition; http://www.mises.org/rothbard/mes.asp

Shugart II, William F. 1987. “Don’t Revise the Clayton Act, Scrap It!,” 6 Cato Journal, 925

Smith, Jr., Fred L. 1983. “Why not Abolish Antitrust?,” Regulation, Jan-Feb, 23; http://cei.org/op-eds-and-articles/why-not-abolish-antitrust

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7:13 pm on August 14, 2017