Origin of Modern Monopoly State - Essay Example

Origin of Modern Monopoly State Monopoly exists when a particular enterprise or person is the only distributor of a specific commodity. Therefore, monopoly is characterized by lack of competition economically in the production of services and goods and absence of viable substitute products. Additionally, the verb monopolises speaks of the process through which an organization gains the capabilities to raise its prices in order to eliminate competitors. Thus in economics, a monopoly is termed as a single seller. Furthermore, monopolies may possibly be big businesses but size is not a feature of monopoly. Small companies might still have power to increase its prices in a small market or industry. Monopolies can form naturally, form by integration or form by a government. In numerous rules, competition laws limit monopolies. However, holding a leading position or the monopoly of a marketplace is not unlawful in itself. But, certain types of behaviours may be considered unlawful and thus incur lawful authorizations when a business is dominant. Monopoly by integration is when two large competing companies come together to form a single entity in order to have more economical dominancy in the market. Thus becoming a monopoly. Additionally, a government-granted monopoly is authorised by the government, and it provides an encouragement to capitalize in uncertain ventures or enhance a national interest group. Examples of government granted monopolies utilized are trademarks, patents and copyright. Thus, the government might reserve the project for its own benefit hence creating a government monopoly. Lastly, a monopoly can be formed naturally. In this circumstance, monopoly happens when manufacturing technology such as comparatively high fixed costs, brings about the decline of long-run regular costs as the output increases. Thus, in such businesses, a single manufacturer will at last be able to manufacture at lesser prices than any other manufacturers therefore generating a natural monopoly (Depoorter, 22). Literature Review In today’s world, the political economy is animated by a striking paradox. Furthermore, conventional economics and plentiful of the missing economics debate this period to be the most extreme and improved competition between businesses on a world-wide scale. Concisely, monopoly power is dominant in the recent days unlike in the past. Therefore, this is an academic concern. Moreover, the political defence of capitalism states that economic control is diffuse and cannot be accumulated in such a manner as having too much effect on a self-governing state. Additionally, the economic argument on capitalism is based on the ubiquity of economical markets thus catering for the rational distribution of rare resources and qualifying the current distribution of incomes. Further, these claims on capitalism are destroyed if monopoly is the statute. Monopoly in economics is used to mention those firms that have adequate market power to influence the asset of an industry, the output and price, therefore, practicing monopoly power- furthermore limit the new comers in the business even in the presence of high profits. These companies considered to be monopoly normally function in oligopolistic environments. This is markets where a number of firms control the manufacturing process, but the monopoly companies still manage to determine the prices of the products. In early 1980s, an unhesitating faith in the universal effect of economic market took grip in the capitalist culture indictment largely and economics, to a degree that would have remained unimaginable ten years earlier. Monopoly concerns were prevailing in mainstream economics. Nevertheless, it had a respected and distinguished place in the era (Medina and Stokes,12). Therefore, monopoly logically brings about competition and ought to be expected. Further, monopoly exists in the DNA of capitalism. According to Karl Marx, growth of capital had a tendency to grow bigger in a solitary hand, whereas partially due to straightforwardness procedure of concentration of assets, and even more as the end result of monopolization of capital, or the preoccupation with resources by another. Karl further wrote that the larger capitals as a statute beat, the smaller ones. Competition furies in direct percentage to the number and contrariwise proportion to the enormousness of the rival assets. Competition ends up tarnishing small entrepreneurs whose assets partially passes in competitor's hands therefore vanishing totally. Thus the monopoly state and competition in today’s economy tells us that both the percentage and number of production companies have really increased greatly since the 1980s. Additionally, more companies in the production subdivision of the economy are quasi-monopolistic and oligopolistic markets branded by a considerable amount of monopoly. And, the trend is accelerating day by day. However, the ratios of concentration for individual companies are important but their value has decreased in today’s world compared to in the past in accomplishment of the filled range of monopoly power of the enormous industries. This is due to the fact that enormous firms do not operate in only one industry, rather it is a conglomerate functioning in multiple industries. Therefore the finest way to get a general picture of the style of economic concentration which records the multi-industry nature of the enormous companies is by observing measures of comprehensive concentration like the economic status of one hundred enormous firms matched to all companies in the economy. Furthermore, the aptitude of enormous organizations to gain greater profits than their minor competitors is the chief indicator of the degree of monopoly existent in these big corporations (Foster Robert W.Jonna, R. Jamil, 1). Agreeing with neoliberal newspeak, monopoly to the left grip as the nature of its evaluation in capitalism was scarcely imitated by the mainstream economists. Dissimilarly, in the early 1980s the capitalism precisely went in a differing direction. The neoliberal move to a leaner, meaner capitalist system conveyed the free market economics of Chicago school to a spot of domination. The philosophies of George Stigler, Friedman, Hayek and a multitude of other conservative economists currently governed the profession. Conventionally, institutionalists and Keynesians those more considerate to reality-based assessments of monopoly not mentioning economists, found themselves side-lined. However, the triumph of neoliberal economics was not the outcome of superior debating methods. In addition, it is best observed as the essential political-economic policy complement to the growth of monopoly-finance investment. Precisely, it can be defined as a reply to the alterations in competition and accumulation related to a new stage of stagnant build-up in the capitalist core, and to the related financialization of the world-wide economy. Therefore this feature of neoliberal economics which niftily exploited the vagueness of competition, remained vital in altering the whole discussion about monopoly amongst policymakers, the general public, activists and scholars (Burawoy, 320). Above all, owing to the growth of global competition the monopole question became less pressing to the economists. According to Stigler, it was the rivalry between international companies in other states signified by the deteriorating domestic and global position of the United States automobile and steel industries that steered the widespread criticism about the ubiquity of monopoly. Nearly part of this desertion of the idea of monopoly can be credited not to the implementation of a certain hypothetical position. However, it was attributed to substantial confusion through the left economists concerns on the countering of a worldwide economy. Additionally, part of the aim of reduced attention in the subject of monopoly capital by the left economists might also have been the development of an important strain within Marxian economics that gradually banned any orientation to monopoly assets in its study since that method tried to go on historic grounds past Marx’s investment. Therefore, the understanding of monopoly power is not only vital to understanding in what way the capitalist system works and the complications of financialization and stagnation. Additionally, it is important to comprehending the actual world of governance and policies, as well as to some significant analysis of colonialism (Foster, 10). Currently, there are a number of business monopolies. Moreover, Google has in some way has expanded into such an enormous business that it may well be considered as a modern day-monopoly. Furthermore, monopolies are constantly feared in the society due to their immense power and the corruption assumed to be inside the company. Google is a globally recognized corporation that offers internet associated services and products. Some of the products Google offers are Google Earth, Google Docs, Google Calendar, Google Blogger, Google Sites, YouTube, Google Plus, Google Search, Gmail and many more. The most astonishing fact about Google is that there is no single day that will pass by without one coming into contact with the multiple products the corporation has to offer. Almost, everybody raging from students to workers own Gmail accounts where they receive and send mails through it daily. Additionally, Google’s search engine is also used in exploration for basic information and other aspects of life. Moreover, adults and youths use Google Docs to save documents, images and many more important documents. The company’s products are ranked highly compared to their competitors. However, the only slight problem about Google is that it has to make decisions about how their products are ranked with other competitors. Thus, some competitors feel this act as biasness. Further, when use searches the word email in Google search, Gmail is ranked as the first despite it being the third largest. Actually, Yahoo! Mail which is the largest is ranked second and Microsoft ranked fourth. Due to these numerous minor competitors have filled protests against Google. Therefore, the Attorney General of Texas, Gregg Abbot is assessing the anti-trust accusations against Google. Thus, Whether or not the Administration contemplates Google a monopoly is a subtle problem. The company’s CEO confirmed that google is practically a monopoly in regard to recent standards. However he agrees that Google has the kind of market to be referred as a monopoly but since there is no rule based on that, it is not considered as a monopoly company (Foster, “Monopoly Capital and the New Globalization”, 8). Finally, monopoly is not acceptable in today’s corporate world. But it exists in some corporations naturally. It is commonly seen in enormous organizations who control a certain market thus controlling the prices. This sometimes might have negative impacts on the small organizations that are venturing into the market. In addition to this monopoly is the extreme situation in capitalism. Majority believes that these monopoly system does not work when there exists only one provider of services and goods, because in occasions like this there exists no encouragement to improve customers’ demands. Governments are attempting to prevent these monopolies by the use of antitrust laws. But it is proving to a hard task to the administration since the companies already have a large market place within. Therefore, I agree that monopoly should be banned completely from the corporate scene because it does not provide a fair competitive market for the smaller organizations that have not established themselves in the industry. It is therefore an agreeable fact that in whatever way people perceive monopoly, there is always the positives and the negative connotations of the same. The origin of monopoly may be seen as having a positive motive of ensuring that there is congruence and proper flow of operations. However, in most cases, monopolised operations tend to fail for lack of quality comparisons. It is in this sense only when monopoly encourages a growth in economy that a group of individuals may be supportive of it. Economically speaking however, monopoly is not an acceptable phenomenon owing to its ability to deny positive competition in the market. In a globalised and economically conscience world we live in, monopoly is not acceptable. In fact, it is sometimes related directly to the greedy move by politicians and powerful people to retain control of markets. A market that lacks competition is viewed as biased and unworthy. While the government tries to fight monopoly, the political systems on whose platform most of the government came to power are exceedingly monopolised in one way or another. This frustrates the positive motives and create confusion within the same government. Work cited Burawoy, Michael. “Manufacturing Consent: Changes in the Labor Process under Monopoly Capitalism.” Contemporary Sociology 2001: 453. Web. Depoorter, Ben W.F. “Regulation of Natural Monopoly.” Encyclopedia of Law and Economics 2000: 1205. Web. Foster, John Bellamy. “Monopoly Capital and the New Globalization.” Monthly Review 53 (2002): 1–16. Web. ---. “The Financialization of Capitalism.” Monthly Review 58 (2007): 1–12. Web. Foster Robert W.Jonna, R. Jamil, John BeLLAMYMcCHESNEY. “Monopoly and Competition in Twenty-First Century Capitalism.” Monthly Review: An Independent Socialist Magazine 62 (2011): 1. Web. Medina, LF, and Susan Stokes. “Clientelism as Political Monopoly.” Annual Meetings of the American Political Science Association. N.p., 2002. 1–27. Web. Read More