Monopoly over long term

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    My brother argues that over the long run monopolies are forming in every sector because of economics of scale.
    But I think I’ve read somewhere that large corporations are becoming more bureaucratic and less efficient and go out of business over time. Do you know any material that supports this idea?


    What evidence does your brother have for his claim? For a fuller treatment of monopoly, take a look at Dominic Armentano’s book, Antitrust and Monopoly.

    Here is an article by Armentano discussing various arguments about monopoly:

    Here is Thomas DiLorenzo on the idea of “natural” monopoly, which in the jargon of economics is the claim your brother is making:


    He mentioned Apple, Microsoft, Monsanto and a european cartel called “Schienenfreunde” (friends of railroads). I pointed out that there is in fact competition in those areas, that these corporations are improving their products but that their “monopoly” is caused by Intellectual Property laws. Hence, they are not operating in the free market. After a little research I found out that the cartel was broken up because one company undercut the fixed price. So I asked him again to name a company that has achieved a monopoly over a long term without help from the government and he was unable to name one… Anyway, thanks for the resources!

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