Monopoly defies conventional assumptions to show readers why an economic system's failure to efficiently allocate its resources is actually a necessary precondition for maximizing the system's long-term performance: the perfectly fluid, competitive economy idealized by most economists is decidedly inferior to one characterized by market entry and exit restrictions or costs.An economy is not a board game in which players compete for a limited number of properties, nor is it much like the kind of blackboard games that economists use to develop their monopoly models.

Inspired by Joseph Schumpeter's suggestion that market imperfections can drive an economy's long-term progress, In Defense of Monopoly defies conventional assumptions to show readers why an economic system's failure to efficiently allocate its resources is actually a necessary precondition for maximizing the system's long-term performance: the perfectly fluid, competitive economy idealized by most economists is decidedly inferior to one characterized by market entry and exit restrictions or costs.An economy is not a board game in which players compete for a limited number of properties, nor is it much like the kind of blackboard games that economists use to develop their monopoly models.As McKenzie and Lee demonstrate, the creation of goods and services in the real world requires not only competition but the prospect of gains beyond a normal competitive rate of return.

Preface

CHAPTER 1 THE WRETCHED SPIRIT OF MONOPOLY

 Smith, Bentham, and Ricardo on the Evils of Monopoly

 Bastiat and Marx on Monopoly as Plunder

 Marshall on the Net Revenues of Monopoly

 Schumpeter on the Vital Role of the Monopoloid Specie

 The Schumpeter Hypothes,

 Concluding Comments

CHAPTER 2 DEADWEIGHT-LOSS MONOPOLY

 The Efficiency of Perfect Competition

 The Inefficiency of Monopoly

 The Locus of Market Failure: Firms?

 The Locus of Market Failure: Consumers?

 The Added Waste of Rent Seeking

 The Imperfection of Perfection

 Zero Economic Profits

 Transitionary Economic Profits

 Economic Profit as a Source of Capital

 Market Efficiency and the Count of Competitors

 Concluding Comments

CHAPTER 3 MONOPOLY AS A COORDINATION PROBLEM

 The Conventional View of Monopoly

 An Unconventional View of Monopoly

 Changes in Agency Costs

 Innovation

 Concluding Comments

 Appendix: Agency Costs and Cartels

CHAPTER 4 WELFARE-ENHANCING MONOPOLIES

 The Paradox in the Microsoft Antitrust Case

 Unraveling the Paradox

 Digital Markets

 The Relevance and Potential Welfare Value of Entry Barriers

 The Problem of Digital Piracy

 Once Again, Why Monopolies?

 The Microsoft Problem for Microsoft's Competitors

 Concluding Comments

CHAPTER 5 LOCKED-IN CONSUMERS

 Consumer Lock-In

 A Product with Network Effects: A Model

 Efficiency Considerations

 Creating Networks

 Concluding Comments

CHAPTER 6 MONOPOLY PRICES AND THE CLIENT AND BONDING EFFECTS

 The Client Effect

 The Bonding Effect

 Concluding Comments

CHAPTER 7 THE MONOPSONY PROBLEM

 The Conventional Monopsony Model

 The Mysterious Existence of Monopsony

 The Monopsonisnc Company Town

 Firm and Worker Mobility and Monopsony Market Power

 Concluding Comments

CHAPTER 8 THE NCAA: A CASE STUDY OF THE MISUSE OF

 THE MONOPSONY AND MONOPOLY MODELS

 The Conventional Cartel Argument against the NCAA

 Science as Ideology

 The Mistaken Presumption of Underpaid Athletes

 The Mistaken Interpretation of Cheating

 The Mistaken Presumption of Monopsony Power

 Sports Demand and NCAA Membership

 College and University Sports as Games

 College Athletics as an Open Market: A Review of the Legal Literature

 Concluding Comments

CHAPTER 9 MONOPOLY AS ENTREPRENEURSHIP

 The Entrepreneurial Role in Firms and Markets

 Monopoly Rents as Entrepreneurial Entitlement

 The Justice of Entry. Barriers Reconsidered

 Monopolies, Public Goods, and the Gains from Price Discrimination

 The Efficiency of Monopoly Failures

 Concluding Comments

CHAPTER 10 PROPERTY AND MONOPOLY

 Property Rent as Monopoly Theft

 The Property-Monopoly Equivalence

 Copyrights as Monopoly Abuse

 Property in Proper Context

 Good and Bad Monopolies

 Monopoly Profits versus Economic Profits

 Concluding Comments

CHAPTER 11 SUMMING UP

Notes

Bibliography

Index