—–Original Message—–
From: KM
Sent: Tue 10/11/2016 4:33 PM
To: Walter Block
Subject: Re: Dr. Block,

I had some questions on Rothbard’s monopoly chapter and the Austrian Theory and just want to make sure I understand it. Our general perspective is that all industries compete with one
another for our limited dollars and that all goods are in competition. The piece I’m confused on is that certain goods may be necessary to life (highly inelastic) like say healthcare. Now using an absurd example here say a mid-sized town where a hospital exists with a decent amount of capital equipment, the market in the area can only bear certain levels of equipment and it happens to be located in a remote area like say North Dakota. Now our position would argue that the costs are raised in part due to remote location and costs of let’s say getting all of the items that make up a hospital to that location I think that is a strong point to be made. However can we assume these people will likely pay extremely high prices to live and that some will be priced out where other goods would have no bearing on it because at least in the case of going to the emergency room there will be no good valued near where that good is (they may value it at their whole life savings or more than that if they are unfortunate). What am I missing here if anything? Thanks, KM

Dear KM: I don’t think you are missing anything here. You are giving a reasonably good depiction of living and working in an isolated environment such as Alaska, North Dakota, Wyoming, Siberia, the middle of the Amazon in Brazil, etc. It is very expensive to bring things there, such as food, clothing, medical supplies, etc. That is why wages are typically higher there than in highly populated areas, ceteris paribus. The only problem I have with what you say is that I don’t think this has anything to do with Rothbard’s monopoly chapter in Man, Economy and State, nor with the usual Austrian view of monopoly (it has nothing to do with the number of competitors, and everything to do with government grants of monopoly privilege). Rather, your scenario is solely the result of the high costs of getting the means of life to outlying areas. They are very expensive as a result. Best regards, Walter

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