Aren't coercive monopolies a natural product of laissez-faire capitalism?

No. One of the most common fallacies about laissez-faire capitalism is that it inevitably leads to the formation of monopolies, so this topic deserves special attention. To find out why this assumption is false we must ask: what are monopolies?

And where do they come from? A coercive monopoly is exclusive control in a field of production, completely exempt from competition and the normal laws of supply and demand. The only reason competition could ever be absolutely barred is because the monopolist is benefiting from what is called a "barrier of entry."

These barriers, however, can only come from one place: the government. It is only a government which has the power to "raise" a business above the laws of the market. In a free market, all businesses are subject to competition, and therefore must constantly be competing to stay ahead of their competition.

But when the government grants a certain business a franchise, subsidy, or tariff protection, competition is legally barred. In ... more.

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