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Five Ways to Create a Monopoly

Mises Daily: Thursday, October 31, 2013 by Brian LaSorsa (http://mises.org/daily/author/1539/Brian-LaSorsa)

Its hard to maintain monopoly status in a free market when you have to deal w ith all that competition and whatnot. Between other companies low prices and new , updated products entering the market each day, its almost like Rich Uncle Pennybags is a thing of the past. But fret not! The politicians of the world would like to offer anyone dead set on controlling an entire industry the chance to shine. So come one, come all government agencies, cronies, and all their friends as we present the five best ways to create a monopoly and to ensure you never hav e to compete again. 1. Regulations. When the cost of doing business is high, make it higher. Small firms cant survive gov ernment imposed regulations while bigger firms can certainly bear the burden, at least temporarily. Taxes, mandates, and especially safety regulations (e.g., clinical trials at the Food and Drug Administration) will wipe out your competition before they even have time to ask what the new rules mean. Then hire a lobbyist in Washington. Im sure he or she will come up with a good reason that the industry should adhere to stricter and more expensiv e guidelines. 2. Subsidies. Theres no such thing as a free lunch. But, when the government is paying for it, the lunch sure does taste free. Subsidies offer an alternative, consumer-driv en focus to acquiring monopoly status. Arbitrary revenue-boosts from the government w ill allow you to reduce prices to essentially nothing, all while maintaining profitability. You can give aw ay (w hat used to be) a $10.00 item for free and, with the help of $1 million in subsidies from our nations capital, you can stay afloat. Your competitors, however, will hav e to make do with reality. Even if they somehow manage to slash prices to $1.00 per unit, w hat kind of customer will pass up free? The subsidy doesnt have to last permanently, either. It will only take a few weeks before your competitors begin to default on paychecks and other loans without transaction revenue. You can also take this route without the government revenue injections if you have a contingency plan in the form of a bailout. Both you and your competitors will go bankrupt, but only one (fingers crossed its you) will receive CPR. 3. Natio nalization. Shout out to government officials! This ones for you. The easiest and most straightforward way to create a monopoly is to simply write the monopoly into law. Federal control over an entire industry much like weve done w ith the United States Postal Service is effectiv ely the prohibition of competition from the private sector. But dont ever reference the USPS. Its a terrible (albeit realistic) example of a government monopoly, what with its inefficiency, perpetual deficits, and general lack of regard for any sense of advancement in mail delivery. Rather, tell everyone you want to monopolize for the good of the people and then talk about the Department of Education or some other public sector operation people dont like to criticize in front of company. 4. Tariffs. Neighbors can be annoying. Some are loud and others are strange, but the absolute worst neighbors are the ones who compete with you in the marketplace (and then win). In the beautiful Southwest, this neighbor is Mexico. Companies south of the border produce certain commodities much more cheaply than American companies do, and they hav e the nerv e to think that they can export their inexpensiv e products to the United States on a whim. We dont think so. If Mexican companies sell sugar for $2.00 per pound and you charge $3.00, dont let them satisfy customers like they own the place. Make sure they pay an import fee of $1.01 and its guaranteed youll win new

business one cent at a time. Better yet, propose a complete ban on the sale of foreign goods in your state, city, and town until youre so isolated from the rest of the world that no one has a choice to buy from anyone except you. 5. Intellectual property. If you have a good idea, why let anyone else have the same one? Take that idea, write it dow n in the broadest words possible, and send it straight to the United States Patent and Trademark Office, w here public officials will (hopefully) grant you the exclusive right to use it. And dont worry, if someone else thinks of the idea one day later ... too bad. You filed first. Ev en if someone halfway across the globe comes up with the same idea independently ... too bad. You filed first. Milk your monopoly for all its worth. Put a huge price tag on that beast and feel free to ignore quality. What are consumers going to do: purchase your exclusive product elsewhere? We wish you the best of luck in your v enture. You deserve it.

Note: The views expressed in Daily Articles on Mises.org are not necessarily those of the Mises Institute. Comment on this article. Brian LaSorsa is a columnist in Phoenix, Arizona. He has contributed to the Washington Examiner and the American Conservative and regularly blogs at the Huffington Post. Contact him on Twitter (https://twitter.com/BrianLaSorsa). See Brian LaSorsa's article archives (ht tp:// mises .org/ daily /author/15 39/Br ian-L aSors a) . You can subscribe to future articles by Brian LaSorsa via this RSS feed (http://mis es.or g/Feeds/ar ticles.ashx? Aut horId=1539 ) .
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