Date: Sun, 9 Feb 1997 14:55:26 -0500 (EST)
From: Justin Schwartz <jschwart-AT-freenet.columbus.oh.us>
Subject: M-TH: Monopolies



I agree with Chris that Engels overstates the case against Duehring when
he says that monopolies can arise without state interference. This is
false of only because without the state there are no property rights are
markets, which are established and protected by law. But I think that
Engels' point was rather this. Capitalism has monoply tendencies that can
arise without the state giving merchantile privileges to any group of
capitalists. The big fish eat the little fish, in recessions the weak go
to the wall, entry costs into the market rise with technological
developmnent, and other economic forces generate favorable conditions for
monopolies. Maintaining competitive conditions requires, in fact, state
action in the form of antitrust, or the bif fish will conspire among
themselves to fix prices and not compete in each other's markets.

I guess I do not like the metaphor of state "interference" in the market
in the first place. The market is created and sustained by the state at
every point. That is the point of contract, property, and to a certain
extent tort law, and the truth in the Economics and Law theory; it is the
dangerous insight hidden in Shelley v. Kraemer (which, interpreted
broadly, says that all action is state action). It's not the the market is
one thing and then there is the state, which comes from outer space, that
interefers with its magical workings. The market is a systematic product
and result of the operation of the state and the law.

Failure to realize this helps explain the failure of perestroika, by the
way. The Perestroichiki bought inti the libertarian line that markets are
natural and will just happen spontaneously if the state leaves people
alone. It didn't and it won't.

--Justin




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