https://www.youtube.com/watch?v=dmzZ8lCLhlkI foun
d this text on Facebook that I wrote 9 years ago:
I've been asked to share my opinion on how the government should handle monopolies.
Before addressing the issue of monopolies, I want to discuss core beliefs. But before that, I have a question to ask.
By my calculation, government spending in 2015 was about 37.5% of GDP. In recent years, this figure has been closer to 40%. The real number is worse because all government spending is included in the GDP calculation. So my question is: At what point would government spending have to rise before those on the left would say, "Enough is enough"? Would it be at 50% of GDP? How about 60% or 70%? The same question applies to taxation—would a 90% tax rate be considered fair?
I could make a similar argument about immigration. I genuinely believe that hundreds of millions of people would come here if they could, so we must set some reasonable limit.
I ask these questions because there doesn't seem to be any clear limit on how much some people are willing to expand government spending or increase government control over our lives.
If we look at two extreme forms of government—on one end, countries where the government controls 100% of GDP, such as the former USSR or North Korea, and on the other, places that have temporarily had little to no government, resulting in chaos—we see that neither extreme works well. However, as we move away from these extremes, conditions improve. That improvement happens more quickly at the lower end of government spending than at the higher end. Studies suggest that GDP growth tends to peak when government spending is around 20–25% of GDP, though some argue that because we lack examples of governments spending less than 20%, lower spending might be even better.
For this reason, I believe that minimizing government leads to greater prosperity, less poverty, and even reduced wealth disparity.
The Libertarian principle states that everyone has the right to do as they please, so long as they do not infringe upon the rights of others. This includes the right to own property, engage in business, and make decisions without unnecessary government interference. If Walmart is one of the richest companies in the world, it is because people choose to shop and work there.
The issue of monopolies is so insignificant that I'm surprised it still comes up. I've debated this topic for decades. At one time, people claimed that Netscape had a monopoly on internet browsers, Microsoft had a monopoly on operating systems, and Lotus had a monopoly on spreadsheets. Yet, all of these have changed.
OPEC once appeared to have a monopoly on oil production, but that, too, has shifted.
Historically, monopolies have often been created by governments. Centuries ago, governments granted individuals exclusive rights to specific businesses and markets. More recently, government-created monopolies existed in industries such as telecommunications, and even today, many utility companies still operate as monopolies. Often, government regulations are used to prevent competition, with industries sometimes lobbying for these regulations to maintain their dominance.
In a free market, as a business begins to dominate a sector, it becomes more profitable, which naturally attracts competition. Even the mere threat of competition can keep businesses in check. For example, we've long known that artificial fuels can be produced for about $5.50 per gallon. OPEC has openly stated that they price oil at a level that keeps alternative fuels unprofitable.
There are many myths about monopolies in the late 19th century. In reality, this period saw some of the greatest economic growth in American history.
