True Source of Monopoly
Thomas J. DiLorenzo
by Thomas DiLorenzo: The
the common law defined "monopoly" as a governmental grant
to an individual or enterprise to operate without any legal competition.
Government-sanctioned monopoly was a key feature of European "mercantilism,"
the type of political/economic system that Adam Smith railed against
in his famous 1776 treatise, An
Inquiry into the Nature and Causes of The Wealth of Nations.
So-called mercantilism was essentially a collection of government
policies, such as protectionist tariffs and government-sanctioned
monopolies, which benefited producers at the expense of consumers.
Granting such favors to politically-connected businesses was a way
in which the European monarchs could share in the plunder of their
citizens through kickbacks from the monopolists. Today these kickbacks
go by various euphemisms, such as "campaign contributions."
the worst of all monopolies is a government-run monopoly financed
directly by tax dollars, for the consumers’ refusal to pay for the
"services" of government monopolists can lead to the forceful
confiscation of one’s income and property or prison (for tax evasion).
At least with most "private" government franchise monopolies
a consumer can always say "no thanks, I’m not wasting my money;
you can go play in the traffic as far as I’m concerned."
There is no
such thing as "free-market monopoly" and there never has
been. The notion of "free-market monopoly" is especially
ridiculous in today’s age of globalization, where competition can
spring up from anywhere on the planet – as long as governments do
not interfere with the free market by prohibiting competition, as
they often do in myriad ways. Monopoly has always been solely a
creation of government.
to being the sole source of monopoly power, government is also a
relentless propagandist in opposition to genuine free-market competition.
Its university systems are filled to capacity with poorly-educated
anti-capitalist ideologues of all sorts, including thousands of
"market failure" economists who spend their entire careers
spinning tall tales of mathematical models that purport to define
a "perfect" market. Having concocted such definitions
they then matter-of-factly point out that, lo and behold, real-world
markets "fail" to meet their definitions of "perfection."
This is known as "the Nirvana fallacy" among free-market
No such perfectionist
models of government are ever invented by the market failure economists
for the obvious reason that government failures would appear to
be many orders of magnitude worse than anything that ever happens
in the marketplace. For example, the Ponzi scheme known as "Social
Security" is a thousand times worse than the most famous private
Ponzi scheme, the one pulled off by Bernie Madoff. Madoff’s rip-offs
"only" amounted to some $50 billion compared to trillions
of dollars in Social Security System rip-offs and swindles. And
the Madoff scheme was not an example of the free market but of criminal
is always and everywhere the source of monopoly power was on display
recently in the June 24, 2012 issue of the Palm Beach Post
in an article entitled "21 Arrested in 3 Delray Gambling Raids."
Like most other states, the state of Florida "legislated"
itself a legal monopoly in gambling and advertises relentlessly
to persuade mostly lower-income Floridians to spend more than $4
billion/year on lottery tickets. These billions are used to pay
the salaries and perks of myriad government bureaucrats, including
not only $25 million/year for lottery employees, but subsidies for
government school bureaucrats, TV-watching/weight-lifting fire station
loafers (our "first responders"), police, and many others.
The state of
Florida, like other states, is not hesitant to use deadly force
to protect its gambling monopoly. As such, it is no different from
any other criminal gang that protects its monopoly profits from
illicit drugs, prostitution, kidnapping, extortion, etc. According
to the article in the Palm Beach Post, the state’s lottery
police got wind of a private lottery game called "bolita"
taking place in the back room of a hair salon. The game involved
about a dozen people and a bag with 100 numbered marbles. The people
in the room were putting money in on gambles as to what numbers
would be pulled out of the bag, just as the state lottery does several
times a week but on a massively larger scale.
sinister was going on" there, the Delray Beach, Florida police
were quoted as saying. Consequently, "SWAT teams from the Delray
Beach and Boca Raton police departments arrested 21 people."
The newspaper article included pictures of "a couple of dozen
officers" who arrived in a faux tank dressed in camouflage,
wearing bullet-proof vests, and carrying automatic rifles. Twelve
people were arrested while all of the hair salon’s patrons were
"detained" (a.k.a. kidnapped) for hours while undergoing
"questioning" by police. The cops must have realized how
ridiculous they looked (jungle camouflage in a suburban hair salon?!)
since they immediately came up with the rationale for the raid that
"Bolita can lead to bigger crimes . . ." Today’s bolita
player may well become the next serial killer in the eyes of the
Florida lottery police.
entertaining (and educational) aspect of the Palm Beach Post
article is the fact that the newspaper placed directly below the
article about the hair salon raid the latest winning Florida lottery
numbers for the previous evening, including "Fantasy 5,"
"Play 4," "Cash 3," and "Mega Money"
J. DiLorenzo [send him mail]
is professor of economics at Loyola College in Maryland and the
author of The
Real Lincoln; Lincoln
Unmasked: What You’re Not Supposed To Know about Dishonest Abe
Capitalism Saved America. His latest book is Hamilton’s
Curse: How Jefferson’s Archenemy Betrayed the American Revolution
– And What It Means for America Today. His next book is entitled
Organized Crime: The Unvarnished Truth About Government.
© 2012 by LewRockwell.com. Permission to reprint in whole or in
part is gladly granted, provided full credit is given.
Best of Thomas DiLorenzo at LRC
DiLorenzo Archives at Mises.org