SWAT Teams, Machine Guns, Tanks

Monday, June 25, 2012
By Paul Martin

The True Source of Monopoly

by Thomas J. DiLorenzo

For centuries the common law defined “monopoly” as a governmental grant to an individual or enterprise to operate without any legal competition. Government-sanctioned monopoly was a key feature of European “mercantilism,” the type of political/economic system that Adam Smith railed against in his famous 1776 treatise, An Inquiry into the Nature and Causes of The Wealth of Nations. So-called mercantilism was essentially a collection of government policies, such as protectionist tariffs and government-sanctioned monopolies, which benefited producers at the expense of consumers. Granting such favors to politically-connected businesses was a way in which the European monarchs could share in the plunder of their citizens through kickbacks from the monopolists. Today these kickbacks go by various euphemisms, such as “campaign contributions.”

Of course, the worst of all monopolies is a government-run monopoly financed directly by tax dollars, for the consumers’ refusal to pay for the “services” of government monopolists can lead to the forceful confiscation of one’s income and property or prison (for tax evasion). At least with most “private” government franchise monopolies a consumer can always say “no thanks, I’m not wasting my money; you can go play in the traffic as far as I’m concerned.”

There is no such thing as “free-market monopoly” and there never has been. The notion of “free-market monopoly” is especially ridiculous in today’s age of globalization, where competition can spring up from anywhere on the planet – as long as governments do not interfere with the free market by prohibiting competition, as they often do in myriad ways. Monopoly has always been solely a creation of government.

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