<p>I do not believe there is any source that would checked every single monopoly for it's origin and compare fraction of monopolies created by state vs naturally occurring ones.</p>
<p>Also, the  claim is difficult to validate/falsify as it is very vague. What does &quot;almost always&quot; mean? More than 50% of the time, more than 60% of the time or more than 95% of the time?</p>
<p>This being said, it is often mentioned in textbooks that government is common reason behind creation and existence of monopolies (e.g. see Mankiw Principles of Economics 6th ed pp 313).</p>
<p>Moreover, from casual observation it would be correct to say that most monopolies are enforced by government. For example, copyright system enforced by government gives an author a monopoly on reproduction of their work. According to the <a href="https://chnm.gmu.edu/digitalhistory/links/cached/chapter7/link7.6.USCOhistory.html#:%7E:text=Since%201870%2C%20the%20Copyright%20Office,of%20the%20Library%20of%20Congress." rel="nofollow noreferrer">U.S. copyright office</a> since 1870 they issued over 30,000,000 copyrights. Another example of government imposed monopoly are patents. According to the <a href="https://www.statista.com/statistics/256738/number-of-patents-in-force-in-the-us/#:%7E:text=In%202020%2C%20there%20were%20about,force%20in%20the%20United%20States." rel="nofollow noreferrer">Statista</a> just in the year 2020 US registered over 3 millions of patents. Government also creates monopolies in various other ways, but patents and copyrights are probably the most numerous monopolies created by government.</p>
<p>I could not find any statistics on naturally occurring monopolies, but the sheer volume of monopolies created by patent and copyright law is astronomical. I think you would struggle to put a list of 1000-10000 naturally occurring monopolies together throughout the whole human history. Even if there would be million of them it would still be just 3% of the number of copyrights issued just in the US alone.</p>
<p>Nonetheless, given that there is no direct empirical study that would look into this, it would be fair to say that it is very plausible that most monopolies are created by government, but  there is no direct evidence to validate or falsify the claim.</p>

CC BY-SA 4.0
2022-09-16T08:31:46.647Z
@user253751 i am not stretching it I am literally using textbook definition - see the source I cited. Stretching it would be if I would go beyond textbook definition, but I strictly keep it to what is commonly understood as monopoly by economists
1muflon1
CC BY-SA 4.0
2022-09-13T23:07:41.530Z
2022-09-13T23:07:41.530Z
1muflon1
<p>Alongside with intelectual property, addressed in the answer by @1muflon1, another major source of monopoly nowadays is the posession of utmost scarce natural resources (hydrocarbons, rare minerals...)
This, I wouldn't say that are rooted in government intervention. But of course you always can stretch the argument to bring a government into scene. If this is not the case, I would consider this a counterexample, important enough as to discard the proposition that &quot;almost always&quot; there is a government behind any monopoly.</p>
<p>In any case, I find the way of thinking based on a dichotomy of &quot;free&quot; markets versus &quot;authoritarian&quot; governments, always alien to us, more confusing than useful.  A mix of market and political rules of behaviour is often the case.</p>

CC BY-SA 4.0
2022-09-16T08:47:20.893Z
@user253751 :D The government gave you a monopoly on living in the home you own! Bastards ;)
Giskard
CC BY-SA 4.0
2022-09-16T09:52:13.847Z
I am knitpicky: this is market power, not monopoly power, but otherwise I get your point!
Giskard
CC BY-SA 4.0
2022-09-16T07:11:42.503Z
2022-09-16T07:11:42.503Z
escaiguolquer
<p>It is hard to answer this question non normatively as there is not really any <strong>empirical</strong> evidence to back up the statement. However, I look at it this way:</p>
<hr />
<p>A competitive market has no <em>artificial</em> barriers to entry</p>
<p>if a &quot;monopoly&quot; would have the pricing power to raise prices it would incentivise competition and encourage other firms to enter the market , the competition has now defeated the monopoly.</p>
<p>The only time this natural phenomenon fails to occur is in the face of regulations set in place by the government creating obscene barriers of entry to protect their vested interests in various big businesses.</p>
<hr />
<p>Therefore it is impossible for a monopoly to exist in a competitive market without a regulatory power creating barriers to entry.</p>

CC BY-SA 4.0
2022-09-26T16:04:24.147Z
What if only I know the secret seven spices to create my amazing sauce that goes so well with fried chicken? Or what if I own the only suitable harbor for ferries in a 50 km radius?
Giskard
CC BY-SA 4.0
2022-09-17T01:27:08.153Z
2022-09-17T01:27:08.153Z
disc
<p>In this video by John Stossel the libertarian economist Daniel J. Mitchell states the following:</p>
<pre><code>Monopolies are almost always a creation of government intervention. 
</code></pre>
<p><a href="https://Capitalism%20Myths:%20Part%201" rel="nofollow noreferrer">Capitalism Myths: Part 1</a></p>
<p>Contrary the wikipedia page on <a href="https://en.wikipedia.org/wiki/Monopoly#Sources_of_monopoly_power" rel="nofollow noreferrer">monopoly</a> lists several different mechanisms by which monopolies are created.</p>
<p>Is there empirical research which validates or refutes Mitchell's claim?</p>

CC BY-SA 4.0
2022-09-14T05:33:04.970Z
To answer this question one would (also) have to define "monopoly". Does the holder of a patent on a specific method of rubber production have a monopoly as long as there are other ways to produce rubber, resulting in a similar end product? Does the operator of the sole vending machine at my place of work have a monopoly?
Giskard
CC BY-SA 4.0
2022-09-14T07:42:44.483Z
Have you tried to ``bing'' the answer?
Michael Greinecker
<reference-request><monopoly>
Are monopolies almost always a creation of government intervention?
CuriousIndeed
# Are monopolies almost always a creation of government intervention?

(Asked by: username_0 on 2022-09-13)

In this video by John Stossel the libertarian economist Daniel J. Mitchell states the following:
Monopolies are almost always a creation of government intervention. 

Capitalism Myths: Part 1
Contrary the wikipedia page on monopoly lists several different mechanisms by which monopolies are created.
Is there empirical research which validates or refutes Mitchell's claim?

**Tags:** reference-request, monopoly

> **Comments:**
> **username_1**: To answer this question one would (also) have to define "monopoly". Does the holder of a patent on a specific method of rubber production have a monopoly as long as there are other ways to produce rubber, resulting in a similar end product? Does the operator of the sole vending machine at my place of work have a monopoly?  
> **username_2**: Have you tried to ``bing'' the answer?  

---

## 3 answers

### Answer by username_3 on 2022-09-13. Score: 1 | Accepted answer

I do not believe there is any source that would checked every single monopoly for it's origin and compare fraction of monopolies created by state vs naturally occurring ones.

Also, the claim is difficult to validate/falsify as it is very vague. What does "almost always" mean? More than 50% of the time, more than 60% of the time or more than 95% of the time?

This being said, it is often mentioned in textbooks that government is common reason behind creation and existence of monopolies (e.g. see Mankiw Principles of Economics 6th ed pp 313).

Moreover, from casual observation it would be correct to say that most monopolies are enforced by government. For example, copyright system enforced by government gives an author a monopoly on reproduction of their work. According to the [U.S. copyright office](https://chnm.gmu.edu/digitalhistory/links/cached/chapter7/link7.6.USCOhistory.html#:%7E:text=Since%201870%2C%20the%20Copyright%20Office,of%20the%20Library%20of%20Congress.) since 1870 they issued over 30,000,000 copyrights. Another example of government imposed monopoly are patents. According to the [Statista](https://www.statista.com/statistics/256738/number-of-patents-in-force-in-the-us/#:%7E:text=In%202020%2C%20there%20were%20about,force%20in%20the%20United%20States.) just in the year 2020 US registered over 3 millions of patents. Government also creates monopolies in various other ways, but patents and copyrights are probably the most numerous monopolies created by government.

I could not find any statistics on naturally occurring monopolies, but the sheer volume of monopolies created by patent and copyright law is astronomical. I think you would struggle to put a list of 1000-10000 naturally occurring monopolies together throughout the whole human history. Even if there would be million of them it would still be just 3% of the number of copyrights issued just in the US alone.

Nonetheless, given that there is no direct empirical study that would look into this, it would be fair to say that it is very plausible that most monopolies are created by government, but there is no direct evidence to validate or falsify the claim.

> **Comments:**
> **username_3**: @user253751 i am not stretching it I am literally using textbook definition - see the source I cited. Stretching it would be if I would go beyond textbook definition, but I strictly keep it to what is commonly understood as monopoly by economists  

---

### Answer by username_4 on 2022-09-16. Score: 1

Alongside with intelectual property, addressed in the answer by @username_3, another major source of monopoly nowadays is the posession of utmost scarce natural resources (hydrocarbons, rare minerals...)
This, I wouldn't say that are rooted in government intervention. But of course you always can stretch the argument to bring a government into scene. If this is not the case, I would consider this a counterexample, important enough as to username_5ard the proposition that "almost always" there is a government behind any monopoly.

In any case, I find the way of thinking based on a dichotomy of "free" markets versus "authoritarian" governments, always alien to us, more confusing than useful. A mix of market and political rules of behaviour is often the case.

> **Comments:**
> **username_1**: @user253751 :D The government gave you a monopoly on living in the home you own! Bastards ;)  
> **username_1**: I am knitpicky: this is market power, not monopoly power, but otherwise I get your point!  

---

### Answer by username_5 on 2022-09-17. Score: -1

It is hard to answer this question non normatively as there is not really any **empirical** evidence to back up the statement. However, I look at it this way:

---

A competitive market has no *artificial* barriers to entry

if a "monopoly" would have the pricing power to raise prices it would incentivise competition and encourage other firms to enter the market , the competition has now defeated the monopoly.

The only time this natural phenomenon fails to occur is in the face of regulations set in place by the government creating obscene barriers of entry to protect their vested interests in various big businesses.

---

Therefore it is impossible for a monopoly to exist in a competitive market without a regulatory power creating barriers to entry.

> **Comments:**
> **username_1**: What if only I know the secret seven spices to create my amazing sauce that goes so well with fried chicken? Or what if I own the only suitable harbor for ferries in a 50 km radius?  

---

