There's Nothing Natural About `Natural' Monopolies

The old concept in economics of "natural" monopoly refers to an industry where the technological advantages of large-scale production preclude efficient competition among smaller companies. The alleged superiority of bigness has been used in most countries to justify government ownership of many industries, since state monopolies are supposed to do a better job than private ones looking out for the public interest. Although claims about natural monopoly continue to influence public policies and academic discussions, this concept has become largely irrelevant to modern dynamic economies.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.