Summary of Lecture
Dr. Per Bylund is an economist and professor who has written many books on the topic of economics. In his lecture, the topic was on monopoly: what it is and why he is not against it. He also touches on the concept of power as it functions in a monopoly and the government's role in monopoly. To start, Bylund tells us the definition of monopoly. In his words it is simply “one seller”. This is interesting to note, because when you do a simple Google search, every single “definition” of monopoly includes high barriers to entry and lack of competition. This could be due to the fact that definitions change over time and connotations of the words start becoming parts of those definitions. Either way, it’s included when you search “monopoly”.
Does Bylund Really Want a Monopoly?
So why does Bylund advocate for monopoly? Bylund is clearly very positive about competition, little to no regulation, and low barriers to entry, so why is it that he seems okay with monopoly? From his stance, he basically tells us that there will always be someone who follows (or just simply copies) the original innovator, creating competition which gives consumers a choice. But that’s not a monopoly. He even tells us that there is rarely ever a monopoly, especially when we have money which gives us choices. We don’t need an iPhone; it’s our choice, Bylund explains. This means he is telling us that he is for monopoly because it never truly exists. This is when power comes in. He explains to us that power comes into play when there is an actor who sets the barriers to entry so high that no one can compete. To me, that is a true monopoly and one I can agree is not a positive thing… but he still argues for monopoly. This is because his version of a monopoly does not necessarily mean that there are barriers to entry, but rather that what the market is offering is so good that there are basically no competitors, meaning that that is essentially all the consumers need from that particular market.
Government Regulations
Yes, it’s true that we absolutely need innovation to progress in society, I agree. Competition is important, and choice is important. That being said (with no government regulations), if we assume that a market has no competition just because they are supplying us with the very best that market has to offer, is that a safe assumption? And also, how would we prove it? Companies like Disney are becoming so powerful that it may get to the point that they have political power. How would we regulate that without the government? Bylund insists that with absolutely no government interference, eventually something better would compete with/replace that company. But how would we be sure that would happen? These are all genuine questions, because I certainly don’t have an answer. I get where he is coming from, that it is when the government gets involved that corruption and power starts taking place, but how would we prevent something like that from happening? Even with no government, there will always be “politics”.
[Image Source] (https://www.alamy.com/stock-photo/monopoly-board.html?sortBy=relevant)
Ethics of Companies
Bylund suggests that companies will take care of or provide what the consumer wants, and he then suggests that if a market is not providing it, the consumers must not care about it that much. He uses environment as an example for this, basically saying that it is because the consumers do not care enough about the environment for the market to care about it. The problem with this is that he does not consider the level of income of the consumer, as well as the social and individual pressure someone has to purchase a specific product. For instance, fast fashion is an industry which treats its human workers terribly, as well as the environment; but they produce it in a vast variety very quickly, and at the cheapest price possible. Yes, everyone has an option. Everyone can walk away, and everyone has a choice, but there is always some bigger reason someone is purchasing those clothes. For a long time, I did purchase those clothes right out of high school, because I was trying to make up for all of the lost years where my mom didn’t buy me clothes. I felt poor, and I wanted to feel not poor. It isn’t because I didn’t care enough. It should just be an assumption that workers are being treated fairly and that the environment is being taken into consideration.
What Replaces the Government?
I shouldn’t have to Google the ethics and rules around the environment and worker safety and treatment before purchasing a product. With all that being said, how would that be regulated without government? The problem of ethics should not lie on just the consumers, it lies on the companies; and without regulations, where is the line? Another government regulated thing Bylund talked about was utilities. Why are there no entries to that market? Well, certainly there is a reason for that. I would assume safety and consistency. How would utilities be provided in a safe and consistent way without government regulations? It’s just another genuine question. “The cost of regulations”, Bylund says, is that it creates monopoly power, but what is the alternative? If the same actor (the government) is causing all of the issues when it comes to free market capitalism and monopolies, then what is the solution? That is my main question I have from this lecture. We need regulations. That’s how people stay safe. How would we regulate with no government?