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Comment by duncan_bayne | Hacker News Reader

Some Austrians (e.g. Rothbard) argue that monopolies as we understand them are actually impossible without State action.

https://mises.org/library/austrian-monopoly-theory-%E2%80%94...

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And some people are flat out wrong. Monopolies at the local level are very common historically. Small towns would have 1 blacksmith for example as there was not enough work for 2 and transportation was prohibitive.

What's the problem then if there's not enough work for 2? You're close to a barter economy at that point. The blacksmith can't gouge the customers he depends on for everything else.

Individual sales matter less to the blacksmith than their customers. So, they might not gouge their customers but padding bills is common behavior after all selling 10% less at 20% higher profit is a net gain. Consider how important the internet is to you vs an extra 20$ a month in profit is for a multi billion dollar company.

Its not padding though. Its picking the right business where the market will accept higher margins than usual.

This is not a moral judgment. It is simply the seller doing what is in their best interest, just like they would in a competitive market.

The difference is that in a competitive market, this self-interest happens to lead producers to do what is in the public interest, but in the monopoly case it generally leads to lower production and higher prices than would be optimal. For more explanation, here's a Wikipedia article that jibes with my college Intro to Econ class:

https://en.wikipedia.org/wiki/Monopoly_price

Yup, and it feels like the blacksmith allocation is very similar to last-mile infrastructure investments. Its not worth putting two sets of infrastructure because either the existing operator is going undercut the new entrant, putting them out of business, or the competitors are going to split up some fraction of the market each, but now, both companies and their customers have to bear the full-cost of capital to wire and maintain the whole market area twice.

If true, a state-less people should be unable to create a state (a kind of monopoly) on their own if they start out as free...

I'd love to hear those Austrians explain Windows and Google search

If only those were monopolies.

No true monopoly?

Well, yes. In the sense that I use search engines other than Google, and I know others who do the same. And I know many people who use operating systems other than Windows.

I get what you mean, but at the same time, a monopoly these are not. Just because there are companies that have a very large market share does not mean there are no alternatives.

15 years ago Microsoft had a monopoly on the x86 operating system market and used that position to unfairly take browser market share by bundling IE with Windows. They had agreements with almost all PC manufacturers to ensure Windows was installed on each PC sold.

> The plaintiffs alleged that Microsoft abused monopoly power on Intel-based personal computers in its handling of operating system and web browser sales. The issue central to the case was whether Microsoft was allowed to bundle its flagship Internet Explorer (IE) web browser software with its Microsoft Windows operating system. Bundling them together is alleged to have been responsible for Microsoft's victory in the browser wars as every Windows user had a copy of Internet Explorer. It was further alleged that this restricted the market for competing web browsers (such as Netscape Navigator or Opera) that were slow to download over a modem or had to be purchased at a store.

https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....

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