[OPE-L:7643] Re: monopolies in natural resources

From: Gil Skillman (gskillman@mail.wesleyan.edu)
Date: Tue Sep 10 2002 - 15:51:33 EDT

Jerry's comments below underscore the importance of distinguishing two 
senses of the term "monopoly"--the one used by Marx in describing a 
condition of absolute scarcity, and the one used by (e.g.) Adam Smith and 
the neoclassicals in describing a situation in which given market actors 
enjoy the power to *set* the market price for a good, rather than taking 
the market price as *given* (say, by the intersection of supply and 
demand).  I understand Fred to refer to the condition of "absolute 
scarcity" invoking only the former, Marxian sense of "monopoly,"-- a sense 
in which notions like "collusion" and "cartel agreements" have no necessary 
place --rather than the sense that Jerry describes below.


>There is an interesting issue here that concerns struggles among
>capitalists and struggles among capitalists and lardlords.  You write
>what landlords will not  "allow".  Certainly, they will resist any
>attempts to break up their monopoly but it is in the nature of monopoly
>that others will attempt to by-pass the monopoly through various means.
>Of relevance here  is the capacity of technological change to make
>possible alternatives.  E.g. diamonds have long (for several
>decades) been manufactured.  This represents a (potential) threat to the
>diamond monopoly.  Similarly, there have been methods developed to
>extract gold from water.   For this and other reasons monopolies
>tend to be historically contingent and unstable.
>There have been other cases where an alternative technology is developed
>that breaks the strength of the monopoly and/or creates another
>(alternative) monopoly.  Consider energy generation (e.g. nuclear, solar,
>wind) and home heating alternatives.
>Moreover, monopoly power in terms of ownership of natural resources
>often takes the form of cartels rather than just a 'pure monopoly'.
>In this circumstance, while there are incentives for cartel members
>to come to an agreement and stick to it, there are also short-run incentives
>for individual cartel members to break an agreement (e.g. by selling
>more or by selling at lower prices).   Once this happens, then the
>solidarity required for the cartel to function effectively tends to erode
>and the cartel begins to unravel.
>At an more concrete level of investigation, it should also be noted that
>ownership of these resources is  often _not_ private but "public", i.e.
>there is frequently state ownership of natural resources.  (It should
>even be noted that historically there have been 'extra-legal' examples
>of successful efforts at monopoly breaking: e.g. the theft of pineapples
>for replanting in Hawaii).
>In solidarity, Jerry

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