Much more serious than the fact that prices may not correspond to marginal cost is the fact that, with an intrenched monopoly, costs are likely to be much higher than is necessary. A monopoly based on superior efficiency, on the other hand, does comparatively little harm so long as it is assured that it will disappear as soon as anyone else becomes more efficient in providing satisfaction to the consumers.#
The shape of the demand curve facing a producer at a given point in time has virtually nothing to do with the competitive character of the market for his product.#
There are no determinants in the price mechanism which apportion output among those who share in the benefits of monopoly. From the social standpoint the division must be arbitrary.#
A monopoly is ‘natural’ when it does not depend on any amalgamation of interests through the purchase of competing resources or any other form of contractual or tacit collusion.#
The object of public utility control is presumably to restrict entrepreneurial powers in such a way as to convert a monopolistic situation into a competitive one.#
Natural monopoly can be observed in practice to be of relatively small importance in comparison with collusive monopoly. In the absence of collusive monopoly (in conspicuous or unrecognized form) there can be little withholding of capacity.#
In a ‘pure’ strike between two parties, each side believes that the other will be the more burdened or inconvenienced, and counts on the other side’s continued waste of its services forcing it to acquiesce.#
Restriction schemes are threatened less from internal quarrels than from the danger of competition from outside. . . . The greater part of that divergence of interest within . . . would cease entirely if the permanence of a cartel could be assured by the suppression of all external competition.#
Regrettable idleness, like other forms of ‘waste’, seems to be the product of arrangements which allow private interest to triumph over social interest. It arises, in other words, because our laws permit competition to be restricted. Hence, no improvement of the monetary system alone is capable of eliminating causes of idleness whilst other existing institutions remain.#