Why Monopolies and Near Monopolies Are Bad News

There are some rather heated arguments by Economists about the desirability of monopolies – and even more so on how quickly economic systems adjust to either defeat or mitigate the deletorious effects of monopolies. I would argue that monoplies are a)rarely good especially over long periods of time and b)the pace of globalization and change is such that economies cannot afford the often tediously slow adjustments/mitigation of monopoly’s “unintended consequences”. To wit, I offer the following article on the Energy debacle that confronts the US and the World. Oil companies promised back in the late 1970’s to become “Energy Companies” – but why should they do that and take on the risky nature of alternative energy   when they have cosy oligopolies or near monopolies in big chunks of their markets and they can earn 40% or more ROI (an likely even better given current oil prices). So ExxonMobil and its ilk do like the Tobacco industry has been doing for the past 20 years a)actively discrediting the need for alternatives and b)engaging in a concerted PR campaign to say to  Americans, given the right conditions (drilling on environmentally sensitive National Presrves and offshore areas),we can supply most of US energy needs.  In sum, stay with the status quo, which like the Health Hazard of their Tobacco mentors, means economic ruin as the rest of the world does do alternative energy which Exxon Mobil  and companies have forsaken.

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