By Josh Alessi
Most people have played MonopolyTM sometime during their life. After only one game with a few people, it’s easy to tell that the more assets you accumulate (businesses, properties, etc.) the richer you can become— at the expense of the other players, of course. The same premise is present in the United States economy in a more complicated manner.
However, in this case, it isn’t fun for all of the players. In real life, a monopoly is a company that completely dominates the industry or sector it specializes in. It doesn’t just have the advantage or the better prices, it literally owns its whole field. They often accomplish this status by buying out all of their competitors, or if they refuse to be purchased, squash the competition out of business. If that’s not a clear reason against monopolies, I don’t know what is. Small businesses and other smaller companies are squashed out by the ‘Big Ones’ before they can even grasp at real success. Overall, monopolies are bad for businesses and for the consumers, and they usually only raise a benefit for the top positions of the companies within the monopoly.
Monopolies bypass the basic rules of capitalism. You may have heard of the Invisible Hand, which is what is supposed to set the prices in an industry. The Invisible Hand simply pushes the prices down to what the consumers want to pay for; it’s in their self-interest to pay lower prices, as made clear in Melanie Lockert’s article about the history of the Invisible Hand. She writes, “The invisible hand concept is closely related to laissez-faire economics, which proposes that government interference in the economy should be minimal and should run its own course. Based on these ideas, as people act based on their own self-interest, it creates a need for supply and demand and can create a competitive and robust marketplace.”
For example: If two companies offer the same product and one costs $20 and the other costs $30, the consumers are going to want to buy the $20 product. The other company is forced to lower their price to $19 now to get maximum profit while still having customers. Now, the customers buy the $19 product. The other company now has to lower to $18. Eventually the companies reach the same price and try to win over the customers using other means, such as customer satisfaction and other consumer-attracting strategies. But the point is the Invisible Hand pushed down the price to what it became, and no matter what company the customer was going to choose, they ended up paying less than they would’ve.
However, that’s not the case when a monopoly is present. Now that they are the only player of the game, they don’t have to worry about the Invisible Hand pushing their prices down.
And the consumers do have to worry now that the Hand isn’t there to help them save money. According to Kimberly Amadeo, this is called price fixing. She says in her “What Is a Monopoly?” article, “Since monopolies are lone providers, they can set any price they choose. That’s called price-fixing. They can do this regardless of demand because they know consumers have no choice.” Not only are the consumers’ choices now limited, but they cannot get around paying more for whatever good they require. A company in this position doesn’t simply take advantage of the customers’ self-interests now in an intelligent manner, but it takes full control of the customer’s economic choice. Instead of manipulating the customer into buying its goods, now it can force them to, directly to the customers expense.
The undesirable prices a person may be forced to pay thanks to a monopoly’s power is not the only thing that may hurt a customer; that falls under a large and important umbrella with the words ‘customer satisfaction’ written across the top. Now, lucky for a monopoly, they can let go of this umbrella and let it fly away whilst drenching the customers in the rain, based on the fact that if a customer has no other choice of what company to purchase a good from, then they must buy it from the same supplier— drenched in the rain or not. This is another example of a monopoly benefiting at the expense of the customer. Adam Hayes writes about some of the effects a monopoly has on a customer, saying, “Conversely, a company that dominates a sector or industry can use its advantage to create artificial scarcities, fix prices, and provide low-quality products. Consumers must trust that a monopoly operates ethically due to limited or unavailable substitutes in the market.” The customer of a monopoly has nothing except for hope that they won’t face a horrible experience in the use or purchase of their goods/service. What are they going to do if they do have a bad experience?
There is nothing you can do. Monopolies being present enables this risk. Nowadays, many people have great appreciation for any company’s customer service department, a department that is effectively unnecessary for a monopoly.
There are people who would argue in favor of monopolies. Also in Hayes’s article, he explains how a monopoly would be beneficial for innovation: “Standing alone as a monopoly allows a company to securely invest in innovation without fear of competition.” While Hayes is correct in his assumption that a monopoly can safely invest in innovation, he doesn’t assert why one will. His argument is invalid, because, as Naomi Klein writes, “The tech giants’ dominant position often leaves entrepreneurs feeling they have no choice but to sell up, or close up. This is bad for innovation and bad for consumer choice.”
In this matter, ultimately Klein is correct. Yes, monopolies are more than able to innovate their technologies and products due to their seemingly never-ending supply of money. However, they really don’t want to spend money risking something if they don’t have a guaranteed return on their investment.
For those reasons, you should be cringing anytime you hear of a company that has monopoly status. In the name of capitalism, monopolies need to be stopped. All in all, it’s the 99% (consumers) who will be in favor of that. If 99% of people deserve something just as much as the other 1% (monopoly executives), why is it that the 1% are the only ones who get it?
When you’re out shopping for the holidays, you should think about where your money is going when you’re spending it.
For example, Amazon is a very convenient company to buy your goods, but is it really helping the companies that make those goods? Amazon acts as its own Invisible Hand and is the only force that controls its own prices. One way to avoid Amazon’s artificial Invisible Hand is to purchase from local businesses that will support your community. Or, if you find something on Amazon, check out the seller’s official website and see if it’s worth it to purchase it directly from the seller, contributing less to Amazon’s growing monopoly. Small changes like this will contribute to reducing the larger problem.
There’s no good reason for anyone to be in support of monopolies in our economy— unless, of course, you are also in support of paying more money for worse and under-designed goods, not to mention the innovative glue hardening onto technological advancement. 

