I mean, feel free to provide an example where we successfully regulated a monopoly to encourage competition and consumer choice...
Natural monopolies need counterbalancing regulation. This isn't even remotely a controversial statement in economics.
Unless your argument is that the Austrian and Chicago schools of economics doesn't actually exist, this is quite wrong, since the Austrian school denies the existence of natural monopoly and argues that harmful monopoly can only exist as a product of government regulation, and the Chicago school likewise holds that absent regulation, monopoly is a transient condition, not a stable one; both favor removing regulations that they see as stabilizing harmful monopolies, rather than regulating to manage naturally-formed-and-self-stabilizing monopolies, which they don't acknowledge the existence of.
Now, I think the Chicago/Austrian positions on monopolies are wrong, but you really can't reasonably deny that this is a fundamental area of controversy.
Austrian overtly so, Chicago less so, but, yes, its another issue that "is economics an empirical science" is also a controversial position in economics.
> but not even remotely so amongst the economists I talk to.
That's a very different claim than your original one. That last qualifier does quite a bit of work.
A temporary regulation could possibly help, but making it temporary is the hard part. And if it lingers, the inefficiencies it creates let some companies become incumbents, and, with some luck, even monopolies.
Is there any evidence that unregulated free markets actually tend towards competition, rather than consolidation?
Based on recent experience this does appear possible, that some monopolies have gotten savvy enough to become long-running nation-state-like entities if left unregulated.
We know from the science of complex systems that one characteristic non-linear dynamic systems, like markets or national economies, is that the critical resources of the system tend to concentrate and consolidate over time.
We’ve witnessed this over the past several decades with the deregulation of the US banking industry, its subsequent concentration and consolidation.
Libertarians like to believe that such economic problems are self-correcting, that eventually such concentrations of wealth and economic power will either asymptotically collapse, or become ossified and be supplanted by something newer and innovative. Either way there’s a reset.
But I don’t think either is inevitable, in all domains. What we’ve actually observed with the banking system is that:
1) powerful monopolies/oligopolies use their resources to capture the actual government and regulators, and use those entities to shape favorable laws, and to bail out the monopolies when they collapse, preventing the reset, and
2) even if the collapse and reset occurs, it causes far more damage and misery to the rest of the economy and society than to the people responsible for causing it.
All else equal I’d rather live in a society that simply prevents those extreme cycles by making natural monopolies into well-regulated public utilities. Public utilities in the US have worked very well for a century, they’re a far more desirable economic arrangement for 99% of society.
You assume markets are inherently centralizing. Where is this assumption coming from, its actually Marxist economics. If you critic Austrian for being empirical, we should first admit that this base assumption is purely based on a school of thought that is much more un-empirical then any Austrian or other market oriented schools ever where.
This prediction was made 200+ years ago, and we have seen a trend towards ever greater number of companies. The amount of interventions by government, with things like anti-trust act were incredibly few and far between.
If there was any validity to the concept, of inherent centralization, we would have seen government having to near constantly fight monopoly.
Both in illegal and legal market we constantly see disruption of big players. The stability of the farmer own farms, rather then the inherent centralization corporate farming. The distributed production of meth, replacing the centralized supply of other drugs. The restaurant industry has existed with few regulation and no anti-trust cases for 100s of years.
I would argue the argument that all markets are inherently centralizing has been totally dis-proven by evidence. Even in the cases where Anti-Trust cases were launched, usually by the time they came anywhere near breaking up a company, the original problem had basically passed. I'm only 30 and in my lifetime I have already seen like 4 tech companies who were gone dominate the world and if Anti-Trust wasn't invoked society was doomed according to people on Hacker News.
There are natural monopoly, and markets where one player can dominate. These are more complex cases, but they are also limited in scope and unlikely to grow out of that market. In fact in general those companies usually become rather happy with just profiting from their monopoly and quickly lose the drive to go into the competitive markets.
In those cases regulation in the short term can help, but being aware of locking in the system are very real, making any kind of disruption in those markets incredibly difficult.
At the time, a broader evaluation of the concept of monopoly must realize that threw-out history, the majority of monopolies were state created. In fact, one of the kinds prime way of making mponey, was selling monopoly rights and using royal power to suppress competition. Some economists have even modeled the Soviet economy along those lines as well. This is largely still the case, the places where monopoly are most persistent, are places where it is created and sustained by regulation.
More common then strict monopoly is some small to mid sized group, getting regulation that protect them. My fav example are the like 15 families who produce cane suger in the US who have for 50 years profited from a sugar import tax. This is party the reason corn sugar is so much used in the US.
In the end, pragmatically the state should likely be aware of citizens being exploited in some natural monopoly situation, but also be aware that if it is actually a natural monopoly, even regulation can not systematically fix the problem either and can do harm in the long run.
This sounds prima facie absurd to me. Are they just throwing phrases out of Ayn Rand novels on paper and calling it science?
They similarly deny the existence of externalities- although depending on who you read the justification varies widely.
Praxeology doesn't accept other axioms, and the axioms it accepts are empirically testable. Which is the why math is fine but Austrian economics isn't.
Also, mathematics doesn't make claims on the real world.
The Austrians start with their axioms and do not accept anyone with other axioms. And unlike mathematical axioms, their axioms are actually empirically testable.
The problem is that you are not actual arguing against austrian economics but a political movement that has hijacked the ideas and presents itself as 'the solution' that proves their political view. This is mostly driven by some conservative finance and the 'The Mises institute', that should actually be called 'The Rothbart Institute'. As they don't really represent Austrian economics as a whole, but rather a narrow minded interpretation of Mises.
If you look at the Austrians generally and those still in academia, they do not actually work that way, and they don't reject empiricism as a whole. The reject pure empiricism and pure positivism, in favor of a individual and institutional approach that is validated by data. In practice and historically Austrian economics was much closer to what we today would consider institutional economics, Law&Economics and Political Economics.
I have years ago stopped fighting since the term has been so discredited by the mob of morons on the internet. Some economists that solidly work within Austrian tradition have stopped using that term because of those bad associations.
But I'm just telling you, your argument really is just like arguing against some Burnie fam who proclaims Keynsian economics implies socialism.
If their conclusions didn't happen to support those in power and capital in particular, they'd be just another meaningless research group.
The Chicago argument on this matter is pretty generally rejected.
If anything it says, natural monopolies exists, but some of the regulation designed to fight it, can be more harmful.
Austrians also try to not narrow down market so much, that monopolies are everywhere. Is Tom Hanks a monopoly on Tom Hanks, sure but does that matter. Is the market acting? Entertainment?
Just saying 'its a natural monopoly, therefore government need to come in with some strong handed specific regulation' is often a bad approach that can stop other mechanism from functioning. For example, locking in natural monopolies forever, even when future technologies means that monopoly would have been broken.
Treating ISPs as a monopoly is fundamentally wrong.
In the US, Google Fiber has had limited success entering a handful of carefully-picked markets where the incumbent options are rotting copper POTS wires vs coax that can only compete on downstream bandwidth. In some of those markets, the incumbent phone companies have replaced some of their copper with fiber, but a third residential fiber option is still unheard-of. That may not fit the strictest definition of natural monopoly, but it's pretty close: in areas where both Google Fiber and eg. AT&T fiber are competing against coax, it would not be surprising to see one of the two fiber ISPs give up. We've already seen Google give up on bundling TV service, and both Google and AT&T are very reserved about further expansions.