What about the following hypothetical situation. What if all water sources in the country are owned by a single company? Just imagine a "De Beers" controlling water instead of diamonds. People will have no choice but to pay this company. It does seem to me like a natural monopoly. What do you think?
How did this company manage to gain complete control of something that falls from the sky?
Well monopoly according to the Austrians is not a single producer owning all of a certain market..... a monopoly in Austrian Econ deals with freedom of entry or freedom to compete
look at this http://www.youtube.com/watch?v=t01bAJFbGb4
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Production is 'anarchistic' - Ludwig von Mises
Yes I've already listened to Walter Block on this.
The company doesn't own rain, but it owns all the water supplies in the country. In Israel, where I live, it would mean to own the Kineret sea, which is not that difficult to imagine. You don't really expect a competitor to dig a lake, don't you?
The company would only be able to make sales charging a rate below what people can get from importing the commodity through "legitmate competition" or a so-called "black market" so there'll still be competition (I use these terms because I assume there'd still be government intervenionism allowing a firm to hold such a monopoly). This would still, obviously, suck for consumers, though.
Eugene: What about the following hypothetical situation. What if all water sources in the country are owned by a single company?
What about the following hypothetical situation. What if all water sources in the country are owned by a single company?
Regardless of how unrealistic the scenario in your question is for a country like the United States and assuming you're asking about a situation in a free market, the population could import the water.
Just imagine a "De Beers" controlling water instead of diamonds.
I am assuming that you are assuming a free market. De Beers is a horrible example. It receives protectionism from governments.
People will have no choice but to pay this company. It does seem to me like a natural monopoly. What do you think?
See above.
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
The company doesn't own rain, but it owns all the water supplies in the country. In Israel, where I live, it would mean to own the Kineret sea, which is not that difficult to imagine. You don't really expect a competitor to dig a lake, don't you? </i></i><
No, but they could buy up...say part of the Pacific ocean and open their own distilling plant. Or does this company somehow own ALL of the oceans as well?
Well there are such thing as 'man made lakes'
Leaving aside the fact that your example is highly hypothetical and de facto impossible in 99.9999999% of situations (including the one you gave), what would be inherently wrong with such a monopoly?
P.S. In your example, there would be no reason why others couldn't import water supplies.
P.P.S. Given your example, it would actually be beneficial for the water monopolist to remain a monopolist, in order to limit how much water people use. Doing so would preserve the water supply for the future, instead of using it up all at once. If there were multiple, separate owners of the lake then there'd be a "tragedy of the commons" situation, whereby each owner tries to extract as much water from the lake as quickly as possible, at the expense of the other owners.
Political Atheists Blog
You don't really expect a competitor to dig a lake, don't you?
How do farmers deal with water monopolies? They dig.
There are various methods of competing in the water market, especially in a modern economy like ours. Foreign importers, for one. Water treatment systems.
Every owner of an original great work of art (Van Gogh, Vermeer, etc.) has a monopoly. Every owner of a baseball autographed by Mark McGwire has a monopoly. You hold a monopoly on the particular set of skills and experience that make your labor valuable.
To push your example to an extreme where it's useful for analysis, imagine that there is just one fresh water source on the entire planet. All water must be shipped from this source. The owner of this water source would be extremely lucky indeed. I can't imagine that he and his descendants would not be immensely wealthier than anybody else in the world. However, there is nothing inherently immoral about it so long as the water source is owned fair and square. I think you might be able to model the Statist order as a system that converts the commons (all "unowned" or "public" natural resources) into the unitary water source in this thought experiment. The value of lands and other natural resources that are locked away as "public" is incalculable. Over 90% of the state of Nevada is public land, for example. And it is the Statist order which controls who may develop these resources and who may not. I think the commons are ultimately the source of the Prince's wealth. Note that the Prince definitely does not own the commons fair and square... and he is also immensely wealthier than anybody else in his territory (which is one reason why he is the Prince).
Clayton -
Israel has.long had.a ridiculous water policy with subsidies and perverse incentives driven by an ideological commitment to the romantic notion of making the desert bloom.
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
In my opinion, competition for the field is one of the best ways to avoid such monopoly prices. Here's great article on the subject : Network information and performances in franchise bidding agreements: evidence from the French water industry You can also read this article (from Steve H. Hanke) Privatizing Waterworks In his paper, 'The Myth of Natural Monopoly', DiLorenzo wrote :
Under private ownership of streets and sidewalks, individual owners are offered a tradeoff of lower utility prices for the temporary inconvenience of having a utility company run a trench through their property. If "duplication" occurs under such a system, it is because freely-choosing individuals value the extra service or lower prices or both more highly than the cost imposed on them by the inconvenience of a temporary construction project on their property. Free markets necessitate neither monopoly nor "excessive duplication" in any economically meaningful sense.