Re:Why do they still make car alarms? (2015)
by imtringued on Wednesday January 20, 2021 @04:28AM
(#25844363)
Monopolies form because there is no upper bound to how big a company can grow. Eventually it will be as big enough to serve the entire market.
In a free market you can still have the government as a market participant of last resort. You don't have to mess with the market itself. If only one company is needed to serve the entire market there is no reason for the government to not own a large share in it and steer it. The threat of government control should be a good incentive for companies to not grow too large relative to their competitors.
In a free market, the first entrepreneur to get a loan from the bank to build up some of the infrastructure would beat all the public collectives - they could just build up, sell at a loss until the local collective gives up, and jack up prices as most users switch to their offering. Rinse and repeat, and with every iteration it only gets easier - because wealth and power compound, much like interest in the bank.
A free market structurally favors larger companies. Unlike what some people say, government intervention is neither necessary nor sufficient to enable monopolies - all that's required is the positive feedback loop on capital. The more you have, the easier it is to get more.