I’m hesitant to answer you, because the internet has made me jaded, and I foresee getting into a long discussion about what constitutes an unregulated market and what constitutes a monopoly.
Wow, that sure make me think we can have a fruitful discussion.
because I don't know of any monopoly that didn't benefit from gov't subsidies or explicit protectionist policies.
Two points:
- What you don't know, is a lot. The inclination to believe that since you don't know of it, it must not exist or – to put it differently – that what you know is all there is to know, is called the Dunning-Kruger effect. It's a sign that you actually don't know much at all.
- Just because a monopoly benefits from certain regulations, it doesn't necessarily mean that those benefits was what helped create the monopoly. All companies benefit from regulation at times. They don't all become monopolies.
But you tell me: What in your mind caused At&T to become a monopoly?
First: I'm pretty sure what you meant to say was I employed a logical fallacy called appeal to ignorance to make my case, not the DK effect -- which is more about lack of self-awareness. Having studied econ and math in college, I kinda know what I don't know. I don't go around making boldly, unsubstantiated claims hoping others won't notice it, like your comments have shown.
Second: if you have to cite a Wiki article to demonstrate your knowledge of economic history in general, you probably don't know jack squat about monopolies, much less AT&T's corporate history. There are actually few good borderline cases that could at least help start an intelligent debate on your unsubstantiated claims about monopolies in unregulated space, but you have clearly no idea what they are. And I highly suspect that you are competent enough to have such a debate. AT&T is probably the worst case study to demonstrate (or destroy) your point.
thx for playing, but it's never advisable to wrestle with pigs. we both get dirty, the pigz like it.
wasn't AT&T a regulated monopoly -- at least since 1913? FCC effectively barred competition and AT&T's pricing and policies required approval from gov't. It wasn't until late 50's and 60's when a relentless third party device maker, Thomas Carter, challenged AT&T's (and gov't sanctioned) monopoly that subsequently weakened AT&T's grip on all things communication. The rest is history.
So, in your mind what caused AT&T to become a monopoly for so long?
wasn't AT&T a regulated monopoly -- at least since 1913? FCC effectively barred competition and AT&T's pricing and policies required approval from gov'
I’m pretty sure you’ve got it wrong.
Firstly, AT&T was already a monopoly by 1913. The Kingsbury Commitment[1], which is what I’m guessing you’re referring to, was in essence an agreement between AT&T and the government by which the government would tolerate the monopolistic status of the company in exchange for some minor concessions. While this didn’t hinder AT&T much, it also didn’t help them.
The way AT&T became a monopoly to begin with is quite simple, and basically a textbook example of how a natural monopoly arises: Early and continued investment in a business which has large fixed cost requirements (that is the cost to build out infrastructure), but tiny marginal cost (the cost of serving one more customer). Unchecked, this eventually builds up to an insurmountable barrier of entry for new players. At the same time incumbent players are highly incentivized to merge or acquire each other, because the value of their combined networks is greater than the sum of them.
Without government intervention, AT&T would have stayed a monopoly for as long as its infrastructure remained relevant. Which it still largely is.
AT&T initially had a monopoly, but when their patents expired in early 1890's, they quickly began to lose their dominance to competitors. Between 1890's and 1913, AT&T lost telephone market share by about 40%, from 95% to 55%. After the Kingsbury Commitment and, more importantly, the nationalization of the entire telecommunication industry during WW1, however, their competitors were effectively eliminated.
As to how natural monopolies arise, Wikipedia has a good article: https://en.m.wikipedia.org/wiki/Natural_monopoly