Mondays With Murray: Competition and MonopolySubmitted by Jao171 on Mon, 01/28/2013 - 17:18
At the age of 12 my brother went off to college and left his lawn mowing business for me to operate. Before he left he was gracious enough to introduce me to his clients and his clients allowed me the opportunity to earn their business. As the summer grew hot and I gained more experience operating my modest business, two important factors that would contribute to maintaining and growing my business became clear. First, my clients came first, their grass needed to be cut at their requested time intervals and trimmed to their expectation. Second, my price was the major reason clients retained my service and new customers sought my services. Professional landscaping services could not compete with the price I offered. Even with this realization, common sense told me that if my service did not continue to meet expectations, then my customers would find someone who would. Without fully understanding the concept of competition, and the impact it has on price and quality, my actions aligned with that of a successful provider and producer. At that time, my major concerns were making money and getting my lawns cut so I could spend as much time as possible playing basketball and homerun derby with my friends. I did not realize that my libertarian philosophy was being molded by my natural, common sense reactions to meet the needs of the landscaping market.
This week’s installment of Mondays with Murray features a video of Rothbard describing the market transformations that result from competition and monopolies in a given industry. Rothbard’s lesson served to remind me of the invaluable experience that I gained while learning about competition from real life experiences growing up. In the below video Rothbard discusses two types of competition, the impacts that result from government monopolies, and bursts into laughter while describing the blatant cronyism involved in a New York scandal involving a notorious former Bronx Democratic political boss.