If there is anything more abhorrent than wife-beating and drug abuse, surely it must be monopoly. Monopoly is un-American: To the economist it represents the very state of original sin. To the courts it ranks with conspiracy. Monopoly promises economic waste, throttled production, obscene profits, and naked power (em all rolled into one. Consider what used to be called the "public utilities." In that sphere, regulated monopoly flourished for many years. Yet, with all its faults, we still feel a lingering nostalgia for the days of unabashed monopoly.
Unnatural, but Prized
The monopoly in question was once thought to be "natural" (em at some remove from the unspeakable category of "unnatural" monopolies. Of course, these regulated monopolies of yore were stodgy enterprises, mostly headed by lawyers and accountants and engineers, and a bit untutored about marketing. Until recently, the name of the local light company was pretty descriptive ("The Light Company"). Only in recent years has the electric company called itself "EnergiWhiz," or the phone company called itself "Surftech" or "TechnoTalk."
The consensus now proclaims that regulated, monopolies lacked the stimulus for innovation that seems to prod more entrepreneurial ventures. Where does this leave the Bell Laboratories, a research wonder of the world, yet the offspring of a huge monopoly?
Admittedly, the Bell Labs, unsparked by competition, could do no better than to invent the transistor and to acquire a Nobel Prize or two for its trouble. But how does one explain this prowess in an institution innocent of competition and nurtured by monopoly?