There are "new natural monopolies" according to Larry Summers and Alan
Greenspan. They mean the pharmaceutical companies and the Microsofts --
anyplace were marginal cost is trival, as Michael has drawn attention to. In
the same speech where Summers advocates protecting the "new natural
monopolies" he also advocates deregulation.
Gene Coyle
Jim Devine wrote:
> Peter wrote:
> >Sam Insull, if I remember correctly, is the tycoon who paid a group of
> >economists to develop the theory of "natural monopoly". It justified the
> >enforced monopoly status of the electrical utilities.
>
> but didn't Adam Smith have a theory of "natural monopoly"?
>
> I'm not rejecting the idea that capitalists sponsor economic theories
> though. I believe it was the BELL JOURNAL OF ECONOMICS (Bell as in AT&T,
> back when AT&T had a monopoly) that pushed the theory that it was
> inefficient if small firms are allowed to "cream skim," to take those
> aspects of a natural monopoly's operations which don't have to be
> monopolistic to be profitable. It's an obviously self-serving theory, but
> it also makes a valid point. For example, United Parcel Service and Federal
> Express have cream skimmed from the U.S. Postal Service, leaving it with
> the unprofitable first class-mail service.
>
> Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
