I can remember the days when one company had a monopoly in the United States to provide phone service to the nation. “Throughout most of the 20th century, AT&T held a monopoly on phone service in the United States through a network of companies called the Bell System. At this time, the company was nicknamed Ma Bell.” (Wikipedia)
Those of us who lived through those days recall the “party lines” and exorbitant fees to talk to someone “long distance”. The phones themselves remained the same for decades on end and service was everything a libertarian claims about the lack of service, price competition, and innovation inherent in monopolies. Thank the gods AT&T did not have an army back then!
It is a violation of moral principles to give one individual or group the exclusive right to operate the commercial phone network as in doing so there must be force or threat of force employed against all the others who would like to compete in that area. Special privilege is so obviously unfair that even Kindergarten children know that one child should not be getting all the goodies from teacher in class. Every child in middle school knows that one student getting an answer sheet to use on the test from teacher while no one else has this advantage is morally wrong. Heck, even picking one child to “sharpen the pencils” all the time leads to questions of “what is so special about her”?
Look at it this way. What’s wrong with a monopoly on the manufacture and sales of automobiles? Suppose that my gang of ne’er-do-wells are the only ones that are legally allowed to manufacture and sell cars. It is obvious we are going to be rich no matter how bad we are at making cars. From a purely moral point of view, the question is: why us? What’s so special about my gang? We and no one else have the full force of the raw power of the government making everyone bow down to us and let only us make and sell cars. If you can’t see the evil in that arrangement you should probably not be reading this blog!
But aside from the moral aspect of monopolies, there is the pragmatic, consequentialist standpoint as well given that I have a monopoly granted to me by the raw force and brutality of government. The incentives inherent in the situation are completely in opposition to the welfare of everyone but the specially privileged monopoly holder — me and my gang of fat-cats. There is every incentive to make the product or provide the service as cheaply as possible while charging you as much as I chose to charge. There is no competition to force me to be competitive and so I will not take any real risks in innovating my product; after all, no one else can make and sell a better product since only I can sell it by law. Because I’ve got no competition, you have nowhere else to go for my product — say cars. You also probably shouldn’t expect the cars I make and sell to be of particularly high quality, but you’ll buy them rather than walk. The government monopoly in the old USSR made some of the worse cars in the history of car manufacturing for example. In addition to the likelihood that the my cars are going to be expensive and not very good, there’s also the fact that I have power over others since I can sell or not sell to an individual based on my biases. I might decide to never sell cars to Roman Catholics for example. To hell with them, I am still making tons of money guaranteed by my monopoly. Abuse of power seems to be a great temptation inherent in monopolies.
But even worse than the above, if I am the only one making and selling cars, how will I ever know if I am making the best cars that can be made even if I were to want to do the best job possible for humanity? There is no competition so there is no experimentation in the market. There is no real price competition and choice for the consumer — they can’t vote with their purchases on who is making better cars. Hence, progress suffers just like it did for decades in the telephone business under the AT&T monopoly.
So if you can agree with me that a forced monopoly is bad juju, why would you want a forced monopoly called the state? Why have a monopoly in the provision of services of adjudicating disputes, and protecting rights, and making laws? We have the moral case against that we learned in Kindergarten: why them? But we have the pragmatic case that the incentives will lead to abuse of power, lack of progress, high costs, low quality, and so forth.
With a forced monopoly like government, we get war after war. Smoke a weed an go to jail for years: come out to a ruined life. We get stupid laws that seek to control every aspect of our lives down to what color we can paint our house. Want to fly to France? Beg permission. The non-productive sector given to us by government is sucking the vitality out of the economy and keeping millions unemployed or underemployed.
I have known “small government conservatives” that claim we need government. Why do we need any government? What does the government do other than enslave us?