Reply To: Austrian View on Capitalistic Monopoly


See lecture 11 in Herbener’s Austrian Economics, Step by Step course. Rothbard also has a chapter dedicated to this subject in Man, Economy, and State (Ch. 10).

Quick summary: Rothbard finds the only sensible definition of monopoly as a state-imposed exclusion of competing firms in favor of one particular firm. A definition “single seller of a particular product” leads to absurdities, such as “we are all monopolists of our own labor.” Also, remember, goods are defined by individuals, and so any slight difference as judged by individuals (as maybe even the location of a firm) means those different firms are selling different products and are thus monopolists.

Rothbard goes on to find many different problems with the comparison of monopoly prices to so-called “perfectly competitive” prices but does show in the end that many criticisms of free-market monopolies do correctly apply to state-imposed monopolies.