The Nature of Monopolies

Today in Political Science, we were discussing various political-economic systems.  For those who don't know, or who aren't sure, a political-economic system explains how the political structure or government interacts with the economy and the market mechanisms therein.

He presented three main extremes.  The first was mercantilism or economic nationalism, a system I believe with which I believe we can all disagree.  In a mercantile system, the government controls the economy in order to benefit the state.  Before the idea of civil rights (that is, rights of the citizens of a given state) was popular or at least vocalized, this system was most prevalent.  It also appears sometimes during times of war or general economic strife.  Sometimes, elements of mercantilism are found within a benign and (relatively) free state.  For instance, a state may prohibit the sale of military arms to foreign powers or foreign investors.  Sometimes, a state will monopolize a particular commodity that is seen as necessary for the survival of the state economy and therefore cannot be left to the whims of private enterprise (e.g., Iran controls all of the petrolium resources in the country).

The second (my favorite) was economic liberalism.  Economic liberalism is the belief that state intervention into economic affairs negatively affects the economy and often makes it inefficient.  Therefore, the state should leave the course of the market up to the market itself.  Examples of economic liberalism have (unfortunately) become few and far between.

The last he offered was communism.  As always, I was on the verge of throwing up when he started speaking about communism.  The idea of making survival unnecessary always makes me want to vomit.  I don't really like to talk about communism, and (since a good portion of people here seem to be bleeding heart socialists) I think most of you can figure out some examples of socialism.

Anyway, the point I'm getting at comes up here.  After he explained the idea of mixed systems, he offered downsides to each system.  Because it's the only one I care about, I'll only mention what he said about economic liberalism.  He claimed that it promotes inequality and monopolies.

First off, I'm still not sure what's so bad about inequality.  People are unequal, and that's what gives them advantages over one another.  Thomas Hobbes explained this in his preface to the social contract theory. (How he managed to jump from saying that every person has his own respective strength to saying that society needs to be contained under a government still doesn't make sense to me.)  He said that every person has strength, be it in wit or in might or by confederation.

Secondly, I firmly disagree that economic liberalism promotes monopolies.  If anything, the other two promote monopolies.  It's strange to me that if a good or service is solely manufactured or offered by the state, it's not considered a monopoly.  The only thing which promotes monopolies is government itself.  With government, economic interests are necessarily protected by an omnipotent third party.  Were there no government, companies would have to work in order to maintain their business.  They wouldn't be able to monopolize ideas with patents or copyrights, nor would they have the ability to become the sole, unopposed provider to the public sector because there would be no public sector.

Government isn't a necessary evil at all; it's just necessarily evil.