What is monopolization. Monopolization of markets - what is it? Concept, basic forms, consequences of monopolization
Monopoly is a state of the economy in which a single entity dominates in a certain business niche, which determines prices and the quantity of a product. The model is considered the least effective for the consumer, since the lack of competition causes stagnation and scarcity.
Monopoly is a natural or artificial state of the market in which the means of production for one or more goods (services) are wholly in the possession of one player. The state, a private company, or an international organization can act as a monopolist. The exclusive right to the extraction of a resource and its processing, the supply of goods or the provision of services can lead to both the protection of consumer rights and their violations.
In economics, the Herfindahl Index is used to assess the real state of affairs in the country and the world. This indicator demonstrates the degree of concentration of a particular market in the hands of its specific players: the conventional value of HHI is calculated as the squared sum of percentages of revenue from the total “pie” of each participant.
Pure monopoly, 1 participant: HHI = 100 2 = 10000
2 players: HHI = 50 2 + 50 2 = 5000
10 players: HHI = 10 2 x 10 = 1000
The emergence and development of monopoly
Monopoly - what is it, what is the danger of the phenomenon? The desire to capture the market and maximize profits is natural for a business. The first formations of this type arose in antiquity, when the rulers of cities and lands concentrated the production of certain goods in their hands. In Tsarist Russia, only the state (read - its leader) had the right to produce alcoholic beverages. And China had an exclusive technology for creating silk and porcelain - no one could offer analogues.
At the moment, nothing has changed significantly: monopolies are either created artificially, or are formed naturally. At the same time, excessive concentration of markets in the hands of one participant is recognized as unfair competition. In reality, it is not easy to influence the state of the economy, since significant funds are required for changes.
Types of monopolies:
- Natural. A product or service is being produced that has no analogues, and the development of an alternative requires too large one-time investments. This, for example, has long been the case for rail and air transport: routes of communication, concentrated in the hands of one owner, they excluded competition.
- Artificial. Measures to limit the number of participants are taken at the state level in order to ensure the quality standard of the product (service) and (or) consumer safety. This applies to transportation of gas, storage of nuclear waste, etc. The register of such monopolists is presented on the website of the Federal Tariff Service of Russia.
- Open. After the invention of a new technology and the launch of its commercial use, the owner of the secret temporarily becomes an exclusive participant in the relationship with the consumer. For example, if the principle of teleportation is revealed in the near future, transport companies providing this service will be temporarily deprived of competitors.
Oligopoly
Oligopoly is a state of the market in which a limited number of participants have the right to extract a resource, process it, produce a good or provide a service. A classic example is the production of passenger airplanes and spaceships, where competition is between two or three companies.
Benefits of monopolies:
- Implementation of a unified policy. For example, in Saudi Arabia, the concentration of the oil and gas complex in the hands of the state makes it possible to influence world oil prices by solving external problems.
- Ensuring high profits. Administrative regulation of the price allows the manufacturer to quickly recoup their costs and get the most revenue.
- Consumer protection. In some cases, government regulation of production ensures safety for the poorest segments of society.
Monopoly criticism
Monopoly: what is it in simple words? This is the desire of a group of people to completely take over the sales channel, to “sit on the pipe”. At all times, opponents of excessive concentration of markets have argued for the development of competition. The more companies fight for their share of the business pie, the more profitable it is for the consumer.
15 years ago when Cell Phones produced exclusively by high-tech giants, only the wealthiest consumers could afford to buy them. Over the years, offers from hundreds of small companies have slowly but surely collapsed the price of devices, while the level of gadgets has skyrocketed.
Monopolization of industries ensures a decrease in technical progress - the manufacturer has nothing to strive for. This was fully felt by the inhabitants of the USSR, where there were only a few large car factories, and the queues for cars were scheduled for years to come. As a result, Avtovaz has been producing the same transport models for decades, and global progress has moved forward, leaving the entire industry behind.
Thus, another unpleasant part of the process is exposed - a severe shortage of goods and services. It can occur artificially or accidentally (due to poor calculation) in a way. In the absence of competition, the manufacturer decides for himself how much goods he “throws away” on sale. And oversaturation of demand will mean a decrease in profits for such a giant.
Monopolization of markets in Russia
The list of sectors of the economy, in which it is allowed to concentrate a large share of profits in the hands of one participant, is listed in the Federal Law No. 147 of August 17, 1995 - "On natural ...". In these areas, strict state regulation is carried out by establishing price caps... The lack of competition has a negative effect on industries: this can be seen from the example of the Russian Railways Corporation.
All other manifestations of monopoly are prosecuted by government agencies and are not acceptable. Antimonopoly authorities monitor the degree of market concentration in the hands of one or another player, collusion between large producers of goods or service providers.
For 6 months 2016 antitrust services only one Voronezh region brought to justice violators on 12 facts of violation of the law (we are talking about the use of the dominant position of housing and communal services, power engineers), total amount fines amounted to 180 million rubles.
The main monopoly industries in the Russian Federation:
- Central water supply and sewerage (OJSC "Mosvodokanal", State Unitary Enterprise "Vodokanal of St. Petersburg");
- Fuel and energy complex (OJSC Gazprom, OJSC Mosgaz and others);
- Railroad transportation (JSC "Russian Railways");
- Airport services (JSC "Airport Vnukovo", JSC "MASH");
- Ports, terminals, inland waterways;
- Publicly available postal and telecommunications (for example, Federal State Unitary Enterprise "Russian Post", OJSC "Moscow City Telephone Network");
- Disposal of radioactive waste (FSUE "National operator for radioactive waste management").
Game "Monopoly"
The well-known fun for children and adults will help you to experience all the delights of such an economic model. A tactical game where participants “buy businesses,” modernize them, and charge a fee to cross their territory, clearly demonstrates the dangers of market monopolization. The smartest, prudent and successful businessman in the end remains in splendid isolation, crushing the entire game board under him.
The market economy with its mechanisms for regulating free competition and entrepreneurship has largely contributed to the formation of the picture of the world that we have today. The advantages of this type of system are undeniable, but this was not always the case. Moreover, until now, some sectors of the economy of different countries have a monopolistic basis. This is the only possible option their effective functioning. So what is monopoly? What is its essence?
We reveal the concept
Monopoly is a market situation when the industry is dominated by a large enterprise or their association engaged in the production and sale of unique products. Such a business entity is protected from competition. He is the only representative of the market that produces a certain product.
Since a monopoly enterprise is in privileged conditions of existence and is the only source of supply, then there is no need to fear for the size of demand. This gives him the opportunity to independently form prices and plan production processes in terms of qualitative and quantitative characteristics. Thus, monopolization is the capture of the entire market or its greater share by one large company.
In modern legislation, such activity is defined as the abuse of an economic entity of its position against the economy and existing laws.
Characteristics of a monopolized market
Among them are the following:
- There is only one seller.
- A product or technology is unique and irreplaceable. Therefore, buyers have no choice.
- There are insurmountable barriers to entry for competitors.
- The company dictates its price to the market.
- Legal. When a monopoly is purposefully created by the state, it is under its total control. And in order to avoid the appearance of competition on legislative level a ban is announced on the entry of similar enterprises into a specific industry.
- Natural. Barriers to the entry of competitors are formed by themselves. For example, public utilities are regulated by the state, and for completely natural reasons, competition is not allowed here.
- Economic. This type of barriers in the market is organized by the monopolist himself or they appear due to the political or economic situation in the country.
Types of barriers to entry into a monopolistic market
Reasons for the emergence of monopolies:
- There are a number of economic sectors that are best managed cost-effectively by a single company or government. These sectors include: energy supply, gas and water supply, pipeline transport, post office, rail transport, metro, etc. Economies of scale in the absence of competition make monopoly in these industries financially justified.
- Possession of a unique resource or technology. Monopolization is a temporary phenomenon until competitors catch up with a company that has taken the lead.
- Reduced demand for a product. Low demand also leads to the formation of a natural monopoly, since everyone understands the inexpediency of creating competition due to low demand.
- Consolidation of the largest companies in the industry. Firms can voluntarily merge to eliminate competitors. A forced merger or even takeover can also occur when a more successful company buys a smaller or more profitable competitor.
Classification
Monopolization is a multifaceted complex phenomenon, therefore, many of its types are distinguished, depending on what is taken as a basis. The most common criteria for classification are as follows.
According to the form of ownership, the types of monopolies are:
- state;
- private.
By the nature and reason of occurrence:
- Natural. Due to limited resources or the characteristics of the production of goods, it is more economically profitable and more efficient to create a monopoly.
For example, managing such natural resources like oil and gas, it is carried out exclusively by the state.
- Artificial. This type of monopoly arises in the event of a merger of companies or in the absence of competitors.
- Temporary, when a company is a temporary monopoly as long as it has a unique product or technology and has no competitors. This provision will continue until other enterprises start producing a similar product.
- Legal. Allowed by the state. Protected from competition by a legal framework.
By the level of state regulation:
- Indirectly controlled. They are created by business entities and are under the supervision of the state.
- Directly adjustable. Monopolies are created and ordered at the will of the state in the public interest.
By territorial nature: local, regional, national and transnational.
Types of monopolies are a whole section in economic theory. Due to the versatility, there is also a division by form. Let's consider their varieties.
Forms of monopolies
The simplest is a cartel, since economic independence is retained for each of the participants. The main point is reduced to the exchange of information and the conclusion of an agreement on prices and division of sales markets.
A syndicate is an amalgamation of several companies from one industry, as a result of which each of them retains control over its own production facilities, but commercial activity is carried out by agreement of the parties. As a rule, a general sales department is created to simplify the operation.
A trust is an association of several companies representing one or more sectors of the economy. There is a merger of production, sales and financial management. In accordance with interest contribution each of the organizations in a common cause is the distribution of shares, and subsequently profits.
Concern is an association of companies from different industries based on diversification. The legal independence of the participants is preserved, while a single Finance center... This increases the potential for production development.
Conglomerate is a merger or acquisition of diversified companies for the purpose of unified financial control. Enterprises can be located in completely unrelated industries. The main goal of this is diversification.
Assessment of the degree of market monopolization
It depends on the predominance of a particular type of relationship in the economy. In order to assess the level of monopolization and competition, the following are distinguished:
- A pure struggle market. This is a situation where there are many companies operating with a variety of products on a scale of mass production. Moreover, for the entry of new members economic relations there are practically no barriers.
- The market of monopolistic competition. There are many sellers in the industry with interchangeable differentiated goods, so there is a risk that if the price is inadequately inflated, the buyer may go to a cheaper competitor. This is the most common type of market structure today. This includes manufacturers of famous brands of sportswear, cosmetic brands, etc.
- Oligopoly. This type of market structure occurs when the number of companies producing similar and interchangeable goods does not exceed five. The barriers to entry are very high. Therefore, there is often, but not always, consistency between competitors. In this case, they can agree to divide the sales market among themselves. Examples are aircraft manufacturing companies, automobile manufacturing companies.
- Monopoly. In this case, there is no competition, this is the complete opposite of the first type of market device.
Monopolization indicators
One of them is the number of manufacturers producing a specific product, and their division into groups depending on size and specialization. To assess the level of monopolization, they also look at the volume of market share by manufacturer.
Other indicators:
- Determining what share of the total market volume is accounted for by small, medium and large enterprises.
- The Hirschman-Herfindel index as the main coefficient of monopolization is expressed as the sum of the squares of the shares of companies in percent. The market is not captured when the indicator is below 1800. In this case, the possibility of mergers and acquisitions of companies is allowed. If this ratio is in the range between 1800 and 2500, then there is a certain risk of a large enterprise seizing too much market share, which will allow it to dictate its rules to the remaining competitors and customers. In this case, the consent of the state is required for the combination of companies. If the index indicator turns out to be over 2500, then any enlargement of the enterprise through takeover or merger is prohibited.
Positive aspects: there are a number of sectors of the economy where competition is unacceptable. The presence of a monopoly in these areas contributes to the rational distribution of resources and savings due to the factor of mass production and cost reduction. Control over natural resources, high-tech and military developments, utilities, enterprises with a unique direction must absolutely not be given to private hands. Management of one company will be most effective.
The main negative consequences of monopolization are associated with the lack of competition. This leads to a long list of negative factors affecting the development of the country's economy.
Consequence of monopolization
- Overpricing.
- Inefficient allocation of resources.
- Lack of incentives to upgrade production facilities and introduce new technologies.
- Decreased production efficiency.
- Risk for an efficiently functioning sector of the economy.
Regulation of monopolies
The state constantly monitors the state of the market. It strikes a balance between competition and monopolization. Otherwise, the excessive growth of the number of dominant companies can impair the functioning of the entire industry. Like any other component of the economy, the activities of monopolies are under the control of a specialized authority.
Its main goals are:
- Price regulation.
- Creating and maintaining healthy competition.
- Ensuring economic freedom for all economic subjects of the market.
- Formation and maintenance of the unity of the economic space.
Thus, competition and monopolization are two fundamentally different concepts, a counterbalance to each other. However, both have a dual characteristic, which implies that these market structures have both positive and negative sides. Competition is essential for the progressive development of all sectors of the economy. However, as the practice of most states shows, one cannot do without monopolistic structures either.
Monopolization is an economically justified phenomenon in certain market sectors. But without its regulation, a negative impact on the development of the industry is possible. That is why antitrust legislation was developed, which allows you to keep the situation under control and maintain a balance between these two types of economic relations.
Market monopolization
A completely different matter is market monopolization, when situations of pure monopoly or oligopoly arise on it not due to the best technology or organization of production, but due to the collusion of several of the largest firms among themselves, crowding out or absorbing other competitors.
In this case, firms that ensure the best use of limited resources do not necessarily become the owners of the market, and then these resources are distributed worse than they could in a non-monopolized market.
The first experience of organized antimonopoly activities of the state was laid by the adoption of antitrust legislation in the United States in 1890 (the Sherman Act). Later, similar laws appeared in other countries. Anti-monopoly legislation is aimed at maintaining a production structure that would allow it to remain competitive.
Market Monopolization
Calculations showed that one company should not produce more than 40 percent of a given type of product. The legislation prohibits any collusion to artificially maintain prices that do not correspond to the real relationship between supply and demand.
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Market monopolization- a situation when one of the sellers or buyers accounts for such a large share of the total volume of sales or purchases in a particular commodity market that it can influence the formation of prices and conditions of transactions to a greater extent than other participants in this market.
The market mechanism by itself cannot prevent a particular firm from monopolizing the market for a particular product. Moreover, such monopolization of the market may arise due to:
1) economic advantages;
2) various collusion or displacement of competitors.
The economic advantage of a particular company in the market may arise due to the fact that it was able to offer the buyer the most favorable price-quality ratio for its products. The basis for such an advantage is usually the introduction of the most advanced production technologies or methods of organizing the production and marketing of goods.
Even if the result of such activities of the company is the capture of the overwhelming share of the market, then there is nothing dangerous. Indeed, here the market mechanism successfully solves its main task - it provides the best distribution of limited resources. Indeed, in such a situation, the largest share of resources goes to the firm that wins the competition by making the best use of limited resources and achieving, on this basis, minimum costs.
There are no grounds for state intervention here. If such a firm tries to use its market dominance to inflate prices, then it will create the conditions for the survival of other firms, even those with higher costs, by offering lower prices.
A completely different matter is the monopolization of the market, when situations of pure monopoly or oligopoly arise on it not due to the best technology or organization of production, but due to the collusion of several of the largest firms among themselves, crowding out or absorbing other competitors. In this case, the firms that ensure the best use of limited resources do not necessarily become the owners of the market, and then these resources are distributed worse than they could in a non-monopolized market.
The development of monopolies undermines the competitive principle of the market economy, adversely affects the solution of macroeconomic problems, and leads to a decrease in the efficiency of social production.
It is in such a situation that the state has to intervene in order to end the monopolization of the market and restore normal competition, when market mechanisms can again work successfully.
Monopolization can only be limited by the state with its capabilities for legislative and other antimonopoly activities, and the use of power structures if necessary.
The first experience of organized antimonopoly activities of the state was laid by the adoption of antitrust legislation in the United States in 1890.
What is monopolization and how does it affect the economy?
(Sherman's Law). Later, similar laws appeared in other countries. Anti-monopoly legislation is aimed at maintaining a structure of production that would allow it to remain competitive. Calculations have shown that one company should not produce more than 40 percent of a given type of product. The legislation prohibits any collusion to artificially maintain prices that do not correspond to the real relationship between supply and demand.
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Monopolization of markets
Absolute monopoly and the economic consequences of market monopolization
Introduction ………………………………………………………………………… .3
1. The main features of absolute or pure monopoly. The effectiveness of an absolute monopoly ………………………………………………………… .6
2. Positive and negative consequences of market monopolization ... .17
2.1 Positive aspects of monopolization of the economy ……………… .17
2.2. Negative factors monopolization of the economy ……………… .20
3. Antimonopoly legislation and antimonopoly regulation: world experience and peculiarities in Russia …………………… ..23 Conclusion ………………………………………………………………… ….…..thirty
List of used sources and literature ………………………… 32
INTRODUCTION
The relevance of research.
The problems of monopolization of economic life, competition in commodity markets today attract close attention not only of specialists, but also of the general population.
In competitive markets, many firms offer substantially homogeneous products, so that each firm has negligible influence on the price it takes for granted. On the contrary, the monopoly does not have direct competitors, therefore, it affects the market price of the product. While a competitive firm is host price, monopoly assigns a price on the products offered to the market.
Special consideration is required for the so-called absolute or pure monopolies, the existence of which seriously affects the economy of a state or even an entire region.
This paper will consider the consequences of establishing a firm's power over the market. Power over the market leads to a change in the ratio of the price of products and the costs of the firm. The competitive firm takes the price of the output as given, and then chooses a supply such that the price of the output is equal to its marginal cost. On the contrary, the price charged by the monopoly exceeds its marginal cost.
The practice of establishing high prices for products by a monopoly is hardly surprising. It may seem that buyers have no choice but to purchase the item at a price set by a single supplier. Monopolies do not have the ability to achieve any level of income they desire, since a high price leads to a decrease in the amount of goods purchased by buyers. Although the monopoly controls the price of goods, its profits are limited.
Studying the decisions of monopolies on the volume of output and the setting of prices, the consequences of the existence of monopolies for society as a whole will be considered. Monopoly firms, like competitive firms, pursue the goal of maximizing profits. But movement towards one and the same goal entails very different consequences. Pursuing exclusively selfish interests, buyers and sellers in competitive markets, regardless of their will, are directed by an “invisible hand” to ensure general economic prosperity. But since the monopoly has managed to avoid the control of competition, the outcome of the market in the case of a monopoly is often not in the interests of the whole society.
The government sometimes has the ability to improve market performance. The analysis to be carried out in this work will expand our knowledge of the “visible hand of the state”. In examining the problems arising in connection with the activities of monopolies, we will discuss different ways with which politicians in power react to their appearance.
The purpose of the work is the establishment of signs of absolute monopoly and consideration of the economic consequences of market monopolization
In this regard, the following were set in the work. tasks:
1. Consider the concept of monopoly and identify signs of absolute or pure monopoly
2. Identify the positive and negative factors of market monopolization
3. Consider government regulation and antimonopoly policy in the world and on the example of Russia.
Source the database was composed of documents on antimonopoly policy in the Russian Federation, schemes and graphs showing the consequences of market monopolization
The degree of study of this topic despite the large number of sources remains low.
The work used the works of both Russian and foreign authors conducting a macroeconomic analysis of market monopolization.
1. The main features of absolute or pure monopoly. The effectiveness of absolute monopoly.
Market model perfect competition proceeds from many prerequisites that are not always realized in practice. A more adequate reality is the market model of imperfect competition.
The essence of the market mechanism of imperfect competition is most fully revealed by the criteria that determine the types of market structures. The most important of them are: the number of firms in the industry; the nature of the products produced; barriers to entry when entering the industry; the degree of control or power over the price.
The most serious obstacle hindering the access of new firms to the market where the industry's "old-timers" operate are entry barriers:
1. The government endows the firm with exclusive rights to certain types of activities by issuing diplomas, licenses, holding competitions, and attestations.
2. Ownership of irreplaceable and rare resources. Thus, the institution of private property is used by the monopoly as the most effective barrier for potential clients.
4. Economies of scale, i.e. advantages of large-scale production, allowing to increase production volumes and reduce costs.
5. Illegal methods of dealing with new potential competitors (anti-advertising, dumping prices, pressure on suppliers of raw materials, enticing employees, threats from mafia structures, etc.).
The analysis of barriers to entry helps to understand why the concentration of the market in different areas of the economy is so different, as well as the reasons for the deviation from the ideal model of the market of perfect competition, where many atomized firms operate.
Currently, economic theory identifies three types of competition within the framework of imperfect competition:
1. Pure or absolute monopoly (from the Greek "monos" - one, only, "polio" - I sell);
2. Oligopoly (from the Greek "oligos" - few, few);
3. Product differentiation, due to which there is a lot of competition.
In the first option (purely monopolistic competition) in any particular market, the dominance of one producer (seller) or one buyer is established (in this case, the term "monopsony" is used), which gives rise to the absolute power of such a monopolist (monopsonist) over prices.
For example, if in a small town the only "serious" enterprise, say, a creamery, then it may turn out to be a monopoly on the local dairy market and a monopsony on the labor market as the largest buyer of labor.
Such a phenomenon of imperfect competition, which is almost never encountered in practice, means a complete absence of competition and can be considered as another purely abstract model of the market.
Thus, in production and on the market, the main features of monopoly are: a high concentration of economic activity in the hands of one or several merged firms; dominant, i.e. the predominant position of these firms in the market for specific economic goods; the establishment of monopoly prices (overpriced when selling and / or understated when buying goods) and, thanks to this, obtaining superprofits for oneself. The essence of the specific actions of the monopolist boils down to the fact that, deliberately reducing the number of its sales and thereby creating an artificial shortage in the market, he is seeking to increase the price. The monopsony, on the other hand, reduces purchases from their suppliers (for example, grain, milk, potatoes from a farmer), creates artificial difficulties for them to sell products, thereby forcing them to reduce prices.
Taking into account the circumstances due to which one firm can become the only seller of economic goods in the market, in economic theory such types of monopoly are distinguished: closed, open, natural, organizational, simple.
A closed monopoly is protected from competition by legal restrictions (patents, government licenses, authorizations from the copyright institute, etc.). So, in most countries, the state has the exclusive right to manufacture medicines, sell weapons, etc.
Open or casual monopoly. In this case, the firm for some time becomes the only supplier of any economic good, without any special protection from competition. Firms that first appeared on the market with new products often find themselves in such a situation.
Natural monopoly is an industry in which long-term average costs reach a minimum only when one firm serves the entire market. In such an industry, the minimum effective scale of production is close to (or even exceeds) the quantity for which the market demands at any price sufficient to cover production costs.
Market monopolization
In such a case, the downsizing of the firm will lead to a loss of efficiency and economies of scale. Monopolies based on the ownership of unique natural resources are closely related to natural monopolies, which are based on economies of scale of production.
A simple monopoly is a monopoly that sells its products at any given time at the same price to all buyers.
Organizational (man-made) monopoly is a large intersectoral association created with the aim of maintaining a certain price level or sharing the joint profit. Such associations are created deliberately by concentrating certain economic and managerial activities in someone's hands. At the same time, in order to obtain superprofits and strengthen market power, strong companies either suppress their competitors (through dumping or boycotts); or carry out the so-called hostile takeover of rivals (buying up their shares, sometimes anonymously); or voluntarily unite with each other (more often by mutual exchange of shares) into various unions, so as not to compete, but to jointly own the market in an orderly and profitable manner; or create so-called affiliated companies, their branches. Historically, there have been three main forms of monopoly unions: cartels, syndicates, and trusts. The main differences between them lie in the breadth of agreements between the participants and the "density" of their association. Such a classification of the types of monopolies is rather arbitrary. Some firms may belong simultaneously to several types of monopolies. These include, for example, firms that service the system telephone connection, as well as electricity and gas companies, which can be classified as a natural monopoly (since there is an effect of economies of scale) and closed (because there are barriers to competition). The classification of monopolies can be carried out taking into account time intervals. For example, a patent certificate makes a firm a closed monopoly in the short term, but such a monopoly may turn out to be open in the long term due to the limited duration of the patent, and also due to the fact that competitors may invent new economic benefits.
2.1. Positive aspects of monopolization of the economy
The attitude of society and the state to various forms of imperfect competition is always ambiguous due to the contradictory role of monopolies in the country's economy. On the one hand, monopolies can restrict output and set higher prices due to their monopoly position in the market, which leads to an irrational distribution of resources and leads to increased income inequality. Monopoly certainly reduces the standard of living of the population at the expense of higher prices. Firms-monopolists do not always take full advantage of the opportunities to ensure scientific and technological progress. The point is that monopolies do not have sufficient incentives to increase efficiency through scientific and technical progress, since no competition.
On the other hand, there are very strong arguments in favor of monopolies. The products of monopolistic companies are of high quality, which allowed them to gain a dominant position in the market (except, however, " natural monopolies", not always rightfully gaining access to a particular activity in the market.) Monopolization affects production efficiency: only a large firm in a protected market has sufficient funds to successfully conduct research and development.
At the same time, one should not exaggerate the role of monopolies in ensuring scientific research and experimental design development. Practice shows that many major discoveries in science and technology are carried out by relatively small, so-called venture companies. On this basis, large firms can arise (an excellent example is Microsoft, which had 100 employees in the United States in 1981, now has 16,400 employees in 49 countries, a market value of about $ 40 billion and an annual turnover of $ 5 billion).
In addition, large-scale production allows for cost savings and overall resource savings. Thus, the increase in oil prices as a result of the actions of the OPEC countries had an extremely negative effect on costs in many sectors of American industry. Only the use of scientific research results by large companies made it possible to switch to fuel-efficient technologies and reduce costs.
It should also not be forgotten that large monopolistic associations (especially intersectoral ones, such as the metallurgical plant, which instantly became famous, the Stinol refrigerator plant, the consumer electronics assembly plant), in the case of economic crisis hold out the longest and begin to get out of the crisis earlier than anyone else, thereby restraining the decline in production and unemployment.
Given the dual nature of monopoly associations, the governments of all countries with capitalist-oriented economies try to resist monopoly to some extent by supporting and encouraging competition.
It may seem that monopoly and competition are completely incompatible with each other. After all, monopoly can eliminate free competition, and competition undermines someone's dominance in the market.
Monopoly is in a complex contradictory relationship with competition. The very fact that the production and sale of a product has been seized by a monopoly group of large entrepreneurs, who receive great benefits from this, causes intense rivalry - the desire of other businessmen to get the same benefit. On the other hand, if an entrepreneur strives to defeat his rivals, then having achieved his goal, he begins to dominate the market. Conclusion: monopoly breeds competition, and competition breeds monopoly.
V modern conditions large capitalist associations have not eliminated competition, they exist together with it, this exacerbates rivalry.
There are a significant number of enterprises that are not included in monopolistic associations and are in a difficult confrontation with them. In each country, the monopolies are met among competitors by foreign companies entering the domestic market.
Competition (Latin "konkurro" - to collide) - rivalry between participants in the market economy for Better conditions production, purchase and sale of goods. Such a collision is inevitable and is generated by objective conditions: the complete economic isolation of each producer, his complete dependence on the market conditions, confrontation with all other commodity owners in the struggle for consumer demand. The market struggle for survival and economic prosperity is the economic law of a commodity economy.
The high prices at which the bulk of the products produced by the monopolies are sold in the monopoly industry also allow non-monopolized enterprises to often sell their products at such favorable prices. As a result, the rivalry between the monopolies and the competition between the latter and non-monopolized enterprises lead to a certain decrease in industry prices.
In the United States, small and medium-sized firms produce about half of the gross national product (GNP), they create more than half of the jobs. Their products are purchased by large monopolies, who prefer not to take risks in the development of new products in science and technology. Thus, monopolies promote the development of small businesses.
2.2. Negative factors of monopolization of the economy
Without the liquidation of monopoly in the sphere of production and circulation, there can be no talk of any market, since monopoly and the market are mutually exclusive things.
Under the conditions of pure monopoly, all the market measures carried out are hypertrophied, and sometimes they bring results that are absolutely opposite to those expected. So, in the recent past, the liberalization of prices was reduced to a simple increase in prices, strengthening the positions of monopoly enterprises, which, even with a reduction in production volumes, solve their problems at the expense of end consumers. In a monopolized economy, there is no correct competition, self-regulation, and, therefore, no market environment.
Monopolization impedes structural restructuring, since there is no motivation for work, accumulation, expansion, renewal, for technical reconstruction of production, which ultimately leads to the physical and moral aging of funds and their "consumption". Monopoly slows down scientific and technological progress, leads to stagnation in all areas of the life of society, to complete defenselessness of the consumer.1
Losses from imperfect competition can be illustrated graphically (Fig. 2.1) and tabularly (Table 2.1).
Rice. 2. 1. Consequences of market monopolization
Table 2.11
The net loss of society as a result of market monopolization is the loss of the consumer as a result of a decrease in production volume below equilibrium.
According to some economists, the loss arising from the monopoly irrational distribution of resources in the United States reaches 2% of the country's gross national product.
Thus, the monopolies, by setting a price higher than the equilibrium one, set the volume of production below the effective one, which leads to irrecoverable losses of society. The activity of monopolies increases the uneven distribution of income, which can have negative socio-political consequences.
Since the activity of monopolies is antisocial, the protection of free competition and limitation of the activity of monopolies is one of the most important functions of the state.
3. Antimonopoly legislation and antimonopoly regulation: world experience and peculiarities in Russia
Antimonopoly regulation (regulation in the field of competition) is understood as the purposeful activity of state authorities to weaken market power, limit it, prevent its acquisition and abuse by economic entities, which is implemented through a system of appropriate economic, administrative and legislative measures. The basis of antimonopoly regulation is antimonopoly legislation - a set of laws and legal norms that establish the rights, obligations and responsibilities of economic entities arising in connection with their activities regarding the weakening of competition and abuse of market power.
The main directions of antimonopoly regulation are determined by the antimonopoly policy, the directions of which include: limiting the monopolization of the market; control of mergers and acquisitions, price discrimination and other methods of unfair competition; consumer protection; protection and support of small and medium-sized businesses.
Antitrust regulation first emerged in the United States in the late 19th century with the adoption of the series federal laws, called antitrust. Currently, it is aimed primarily at preventing monopolization, that is, actions that are illegal in their essence and actions, the legality of which is determined by the rule of rationality. In the first case, the presence of the fact of illegal actions or agreements that undermine competition is enough for the firm to be proven guilty. These include: horizontal price fixing; horizontal collusion on market share; agreed refusal to trade; agreement on mutual sales and purchases; related sales (in the assortment set by the supplier). In the second case, according to the rule of rationality, all actions and agreements that can have an anticompetitive impact must be carefully analyzed, on the basis of which a decision is made.
Fundamentals of U.S. Antitrust Law
The Sherman Act (1890). Prohibits contracts and associations in the form of a trust (or in any other form) that restrict trade, secret monopolization of trade or an industry, sole control in a particular industry, and price collusion.
Clayton Act (1914). Prohibits and prevents restrictive business marketing practices, price discrimination (when this is not dictated by the specifics of current competition), horizontal mergers through partial or full acquisition of the share capital of a competing company, leading to restriction of competition, etc.
Federal Trade Commission Act (1914). Aimed at preventing and suppressing unfair competition practices and establishing control over the commercial ethics of companies. Federal trade commission has the right to issue instructions and rules for regulating trade, prohibitive orders, monitor the activities of a company and, if necessary, investigate its actions.
The Robinson-Pathman Act (1936). Prohibits restrictive business practices in the field of pricing policy in trade: price scissors, price discrimination, etc. 1
Wheeler-Lee Amendment to the Federal Trade Commission Act (1938). Expanded the FTC's rights to companies that harm not only competitors, but also consumers and society in general, as well as false or misleading advertising and distorted information about the quality of products.
The Seller-Kefauver Amendment to the Clayton Act (1950). Clarifies the concept of illegal mergers, prohibits mergers through the purchase of assets, in contrast to the Clayton Act, restricts horizontal mergers through the acquisition of non-equity capital of the company and vertical mergers leading to restriction of competition.
The Hart-Scott-Rodino Act (1976). Strengthens requirements to prevent mergers aimed at creating monopolies or reducing competition, and expands the powers of agencies to enforce antitrust laws.
The Tanney Act and the Consent Decree (1995). Adopted in connection with the business of Microsoft and requires a court to determine whether the agreement is in the public interest before entering into any agreement between the companies. They tighten control over relations between corporations and the Government, over corruption, lobbying by corporations of their interests to the detriment of public interests. The role of the court is to scrutinize not only the Government's expert opinion on the existence of antitrust violations, but also its impartiality.
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Hello dear readers of the blog site. Monopoly is economic situation on the market when the entire industry controls the only manufacturer (or seller).
The production and trade of goods or the provision of services belongs to one firm, which is also called a monopoly or monopolist... The subject has no competitors, as a result of which the company has a certain power and can dictate conditions to buyers.
Examples of monopolies
The word "monopoly" originated in ancient Greece and in translation means "I sell one."
The definition of monopoly implies the existence of a business niche where one manufacturer dominates, which regulates the quantity of goods and their prices.
Pure monopoly companies are very rare. This is due to the fact that a substitute can be found for almost any product or service.
For example, the natural monopoly is the metro... If the subway infrastructure is divided between two or three competing firms, chaos ensues. But when the metro services cease to suit the population, people will be able to get to their destination by buses, trams, cars, and electric trains.
That is, the metro is a monopolist among underground, high-speed transport, but in the field of passenger transportation, it is not.
The state of the economy in which dominated by one subject, typical for housing and communal services, public sector, production of products requiring careful control.
Considering what a monopoly is, one cannot ignore another closely related concept - "oligopoly". This condition is much more common in the economy. Oligopoly market are shared by several companies. With the collusion of the main players, the market approaches the monopoly in its characteristics (for example, cellular operators).
Classic - aircraft and shipbuilding, weapons production. It happens here between two, three suppliers.
Types and forms of monopolies
The following forms of monopolies are distinguished:
- Natural- arises when the business in the long term only serves the entire market. An example is rail transportation. Typically, economic activities are expensive at the initial stage.
- Artificial- usually created when several companies merge. Collusion of businesses allows you to quickly eliminate competitors. The educated structure resorts to such methods as prices, economic boycott, price maneuvering, industrial espionage, speculation in securities.
- Closed- protected from competitors by law. Restrictions may relate to copyright, certification, taxation, transfer of unique rights to own and use resources, etc.
- Open- the only supplier that has no legal barriers to competition. Typical for firms offering new, innovative products that have no analogues at the moment.
- Double-sided- a marketplace with one seller and one buyer. Both parties have power over the market. As a consequence, the outcome of the transaction depends on the negotiating ability of each participant.
There are other classification options, for example, they are divided into two types by ownership:
- private
- state
Or by territorial principle for 4 types:
- local
- regional
- national
- extraterritorial (global)
If we consider an artificial monopoly, when a number of enterprises (companies) are combined, then they say about the various forms of such mergers:
Monopoly in the history of the development of society
People noticed the benefits of monopoly almost immediately with the advent of exchange and the emergence of market relations... In the absence of competition, prices for products can be raised.
Ancient greek philosopher Aristotle considered the establishment of a monopoly and management of the economy. In one of his works, as an example, the sage tells about a subject who received money “in growth”. To make a profit, an enterprising man bought all the iron in workshops, and then resold it at a premium to merchants who arrived from other places.
The Thinker also mentions attempts to regulate monopoly by the state. The cunning seller was expelled by the government from Sicily.
In European countries in the Middle Ages, monopoly developed in two directions - as a result of the creation of workshops and through the issuance of royal privileges:
- Shop Is an association of artisans. He supervised the production of the products of the participants. The main task of the organization was to create conditions for the existence of artisans. The workshops did not allow competitors to enter their markets and set market prices for the goods produced.
- Royal privileges gave the exclusive right to sell or produce certain types of products (services). Merchants and industrialists were happy to get such a privilege in order to get rid of competitors, and the king received money for the treasury. However, many royal decrees were absurd and stupid, which resulted in some countries.
In the 19th century, as a result of the rapid development of production, the competition between manufacturers intensified. Lower costs have led to the enlargement of factories and plants. Remaining players united in various communities(, pools) that acted as monopolists.
Monopolies in the history of Russia are a repetition of global trends. But most of the processes in our country took place late and were often brought from outside. So, in tsarist Russia, the production of alcoholic beverages was an exclusively state function.
And the first industrial syndicate originated in St. Petersburg in 1886 with the participation of German partners. He united 6 firms producing nails and wires. Later, a sugar syndicate was born, then Prodamet, Produgol, Roof, Copper, Prodvagon, etc.
Reasons for monopoly
The desire to monopolize the market is normal for any business. It is inherent in nature itself entrepreneurial activity, the main goal of which is to maximize profit. Monopolies are created both naturally and artificially.
Additional factors contributing to the development of monopoly can be:
- large expenses for creating a business that do not pay off in a competitive environment;
- the establishment by the government of legal barriers to doing business - certification, licensing,;
- a policy that protects domestic producers from foreign competitors;
- consolidation of firms as a result of acquisitions and mergers.
Antitrust Law
Lack of competition leads to negative consequences in society:
- inefficient use of resources;
- shortage of products;
- unfair distribution of income;
- lack of incentive to develop new technologies.
Therefore, the governments of the countries are trying limit the emergence of monopolies... Special government agencies monitor the level of competition in the market, control prices, and prevent small firms from becoming dependent on large players.
Antitrust laws exist in most countries in the world. It protects consumer interests and promotes economic prosperity.
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Introduction
Monopoly(Greek "monos" - one, "field" - I sell) - the exclusive right of production, fishing, trade and other types of activity, belonging to one person, a certain group of persons or the state. This means that, by its very nature, monopoly is a force that undermines competition and a spontaneous market. An absolute monopoly covering the entire economy completely excludes the mechanism of free market competition... V different countries and in different historical periods, different types of monopolies arise in the economy.
The modern development of the Russian economy is associated with the formation of state-controlled market structures and the creation of conditions for industrial growth in the context of the development of competition.
Monopolization of production directly affects the process of distribution of the social product, and therefore the mechanism of state regulation of monopoly acquires special significance. The problems of analysis of management activities related to the specifics of market regulation at the level of regions of the Russian Federation are becoming relevant.
The decision-making of state regulation of the development of monopoly and competition in the market is associated with the analysis of monopolization of production. In the process of restructuring the economy, state authorities face problems of coordinating competitive activity in markets with different levels of monopoly influence. Reasonable conceptual approaches to the formation of markets with a low level of monopolization in medium and small production and an increased level in industries where the enlargement of enterprises are due to cost savings and technological uniqueness of production are required. In this regard, the mechanism for analyzing the monopolization of production becomes relevant, which makes it possible to determine the effectiveness of the development of monopoly and competition, taking into account the scale of production.
1. Monopolization of production in Russia
In our country, until recently, the prevailing tendency towards the enlargement and centralization of production, although the advantages of large-scale production over small-scale production may increase to certain limits, after which they are lost. Starting from the stage of industrialization, the development of the national economy proceeded through the creation of giant enterprises, to which the state provided the best economic conditions. Small factories and factories were assigned a secondary role.
The states, departments and ministries that manage individual sectors of the national economy, gigantic industrial enterprises, due to the natural conditions of management or due to the extraordinary concentration of production, have become monopolists who do not know competitors in the domestic market. For example: in the late 1980s, the USSR's Aeroflot was the world's largest air transport company. It numbered 0.5 million people. The company served 3,600 cities and 1 million square kilometers of air roads.
The monopolistic structure of the Russian economy, which in the scientific literature is often referred to as "state monopoly", was formed under the influence of the following main factors:
1. The presence of an administrative-command system of management, which manifested itself in directive management, in the centralized redistribution of a large share of income, in the appointment of economic managers "from above".
2. Concentration and specialization of production. In the late 80s. in the hands of the state was concentrated about 85% of the basic means of production. More than 90% of machine-building products were manufactured by enterprises, each of which employed over 1000 workers. An extremely high degree of concentration of production is still observed in almost all sectors of the Russian economy.
The concentration of production is complemented by a narrow subject specialization of production, which is simply incompatible with the competition (since there is little likelihood of the existence of several giant factories producing goods that are needed in small quantities).
A typical example is the Soviet aviation industry, which is practically inoperable under market conditions, consisting of design bureaus and factories independent of each other, and capable of working only with some kind of common control system. In addition, after the collapse of the USSR, the OKB im. Antonov without large aircraft building plants, and in Uzbekistan - a plant without design bureaus.
The dismantling of the totalitarian nationalization of the economy carried out in the country presupposes the destruction of all types of absolute monopoly. This is achieved by eliminating the command and control system, dividing large enterprises, increasing the role of small and medium-sized enterprises, creating competing industries, including collective enterprises and industrial farms, organizing consumer societies, adopting various acts of antimonopoly legislation providing for the development of normal competition.
For the most part, the industrial system of both Asian and European countries has a monopoly, or rather an oligopoly structure. Moreover, as a rule, there is no market competition anywhere in the classical sense of the word.
The markets of the countries of the united commodity exporters (OECD) are segmented into micro-industries for the production of specialized goods. The production of each such product is usually oligopoly, less often - monopoly. Competition is not carried out within a given market sector, but between sectors, due to the mechanism of cross-competition, which generates a degenerate demand curve in each of the sectors. This sets limits to monopoly diktat. Further, this phenomenon is weakened by foreign competitors. Moreover, the conditions for them are created on the market of a particular country by no means equal. The classic example here is Japan.
Monopolization of production, as a rule, turns out to be in the interests of the consumer, since the equilibrium price of the monopoly, which ensures its profit, is much lower than the price that would be formed in the free market, due to the increased costs of firms entering and exiting the sector in the process of competition. The age-old maxims of the neoconservatives that the monopoly price is higher than the market price “all other things being equal” are inadequate to reality simply because “other conditions” in a monopoly and competitive market cannot be equal. Competitive costs are higher, which means that the price of “market equilibrium” is higher.
In addition to being profitable for the consumer, monopolization is dictated today by the scale of production: factors of minimizing transaction costs, etc.
The existing multi-sector, “cellular” market provides monopoly competition and protects the consumer from the arbitrariness of monopolies. However, this self-regulation is very often insufficient and requires government regulation.
Because of this, Western states have already begun to introduce elements of state regulation into their economies since the 1930s. By now, in France, Scandinavia, and partly in Germany, these elements have taken the form of state paternalism of large-scale industry, albeit very limited.
Asian states (Japan, Korea, Taiwan, etc.) initially built their industrial systems within the framework of state paternalism. The effectiveness of this path is readily apparent to the unbiased analyst.
The Japanese industrial system seems to be the most acceptable for Russia. After adaptation, it can take the following forms:
· The basic elements of the system are linear monopolies, financial and industrial groups, as a rule, of joint-stock ownership.
· Additional elements of the system - small and medium-sized enterprises of various forms of ownership (municipal and private).
The closing elements of the system are small private firms that provide services and carry out risky, innovative projects commissioned by large corporations.
This system is closed on the corresponding structures of the state, which have different names, but have common features.
The regulatory structure is the Ministry of Antimonopoly Policy (MAP), consumer protection, which enforces antitrust laws and regulates monopoly prices, and measures to demonopolize where possible. In the United States, such a system has a quasi-judicial nature - supervisory authorities, consisting of representatives of consumers and manufacturers, establish a fair price level.
The formation of financial and industrial groups (FIGs) in our country is supposed to be able to influence the stabilization of production, the strengthening of the competitive nature of economic relations, the acceleration of scientific and technological development, and financial stabilization.
However, despite the usefulness and necessity for both holdings and FIGs for our economy, they belong to monopoly structures. And when they are created, it is necessary to establish their compliance with antimonopoly legislation, and in particular the State Program for Demonopolization of the Economy and Development of Competition in the Markets Russian Federation... In accordance with this program, it is the entire group of enterprises and organizations included in FIGs that is considered as a single economic entity.
The process of demonopolizing the economy and developing competition in the markets of the Russian Federation provides for the following general requirements:
Focus on creating a competitive market, protecting the rights and interests of consumers;
Complexity of solving the problems of demonopolization, privatization and restructuring of the economy;
A differentiated approach to the objects of demonopolization, taking into account social interests, industry (product) and regional characteristics;
The interconnectedness of solving the problems of demonopolization and the development of competition at the federal, sectoral and regional levels;
Consideration of the factors of integration of the Russian economy into the world economic system, the openness of product markets to international competition, combined with measures to protect domestic producers;
Monitoring changes in the market structure and compliance of the software implementation mechanism of demonopolization and the development of competition with its structure;
Ensuring the publicity of the activities and their results.
2. Positive aspects of monopolization of the economy
2.1. Production efficiency.
The attitude of society and the state to various forms of imperfect competition is always ambiguous due to the contradictory role of monopolies in the country's economy. On the one hand, monopolies can restrict output and set higher prices due to their monopoly position in the market, which leads to an irrational distribution of resources and leads to increased income inequality. Monopoly certainly reduces the standard of living of the population at the expense of higher prices. Firms-monopolists do not always take full advantage of the opportunities to ensure scientific and technological progress. The point is that monopolies do not have sufficient incentives to increase efficiency through scientific and technical progress, since no competition.
On the other hand, there are very strong arguments in favor of monopolies. The products of monopolistic companies are of high quality, which allowed them to gain a dominant position in the market (except, however, "natural monopolies", which do not always have the right to gain access to one or another activity in the market). Monopolization affects production efficiency: only a large firm in a protected market has sufficient funds to successfully conduct research and development.
At the same time, one should not exaggerate the role of monopolies in ensuring scientific research and experimental design development. Practice shows that many major discoveries in science and technology are carried out by relatively small, so-called venture companies. On this basis, large firms can arise (an excellent example is Microsoft, which had 100 employees in the United States in 1981, now has 16,400 employees in 49 countries, a market value of about $ 40 billion and an annual turnover of $ 5 billion).
In addition, large-scale production allows for cost savings and overall resource savings. Thus, the increase in oil prices as a result of the actions of the OPEC countries had an extremely negative effect on costs in many sectors of American industry. Only the use of scientific research results by large companies made it possible to switch to fuel-efficient technologies and reduce costs.
It should also not be forgotten that large monopolistic associations (especially intersectoral ones, such as a metallurgical plant, the instantly famous Stinol refrigerator plant, an assembly plant for consumer electronics) last the longest in the event of an economic crisis and begin to emerge from the crisis earlier than anyone else. the most restraining the decline in production and unemployment.
Given the dual nature of monopoly associations, the governments of all countries with capitalist-oriented economies try to resist monopoly to some extent by supporting and encouraging competition.
2.2. Impact on competition.
It may seem that monopoly and competition are completely incompatible with each other. After all, monopoly can eliminate free competition, and competition undermines someone's dominance in the market.
Monopoly is in a complex contradictory relationship with competition. The very fact that the production and sale of a product has been seized by a monopoly group of large entrepreneurs, who receive great benefits from this, causes intense rivalry - the desire of other businessmen to get the same benefit. On the other hand, if an entrepreneur strives to defeat his rivals, then having achieved his goal, he begins to dominate the market. Conclusion: monopoly breeds competition, and competition breeds monopoly.
In modern conditions, large capitalist associations have not eliminated competition, they exist together with it, this exacerbates rivalry.
There are a significant number of enterprises that are not included in monopolistic associations and are in a difficult confrontation with them. In each country, the monopolies are met among competitors by foreign companies entering the domestic market.
Competition (lat. "Konkurro" - to collide) - rivalry between participants in the market economy for the best conditions for the production, purchase and sale of goods. Such a collision is inevitable and is generated by objective conditions: the complete economic isolation of each producer, his complete dependence on the market conditions, confrontation with all other commodity owners in the struggle for consumer demand. The market struggle for survival and economic prosperity is the economic law of a commodity economy.
2.3. Price reduction.
The high prices at which the bulk of the products produced by the monopolies are sold in the monopoly industry also allow non-monopolized enterprises to often sell their products at such favorable prices. As a result, the rivalry between the monopolies and the competition between the latter and non-monopolized enterprises lead to a certain decrease in industry prices.
2.4. Small and medium business development.
In the United States, small and medium-sized firms produce about half of the gross national product (GNP), they create more than half of the jobs. Their products are purchased by large monopolies, who prefer not to take risks in the development of new products in science and technology. Thus, monopolies promote the development of small businesses.
3. Negative factors of monopolization
Impact on market relations.
Without the liquidation of monopoly in the sphere of production and circulation, there can be no talk of any market, since monopoly and the market are mutually exclusive things.
Under the conditions of pure monopoly, all the market measures carried out are hypertrophied, and sometimes they bring results that are absolutely opposite to those expected. So, in the recent past, the liberalization of prices was reduced to a simple increase in prices, strengthening the positions of monopoly enterprises, which, even with a reduction in production volumes, solve their problems at the expense of end consumers. In a monopolized economy, there is no correct competition, self-regulation, and, therefore, no market environment.
Monopolization impedes structural restructuring, since there is no motivation for work, accumulation, expansion, renewal, for technical reconstruction of production, which ultimately leads to the physical and moral aging of funds and their "consumption". Monopoly slows down scientific and technological progress, leads to stagnation in all areas of society, to complete defenselessness of the consumer.
4. Antitrust regulation
Antitrust regulation is a set of economic, administrative and legislative measures implemented by the state and aimed at ensuring conditions for market competition and preventing excessive market monopolization that threatens the normal functioning of the market mechanism. Antimonopoly regulation implies regulation of the degree of concentration and monopolization of production, foreign economic activity, price and tax regulation, impact on the strategies of enterprises.
Monopoly power can pose a danger associated with unjustified overpricing of monopoly products and excessive underpricing of raw materials for the monopolist firm. For most monopolies, tendencies towards bureaucracy and inefficiency are inherent (when the actual costs for any volume of production are higher than the average total costs). The monopoly market is characterized by inefficiency in the allocation of resources. The influence of monopolies can increase income differentiation, which in turn has a negative impact on society and is fraught with social conflicts. By virtue of all of the above, in developed countries there is antimonopoly regulation of the economy.
In Western countries, the state actively regulates the economic activities of monopolies and oligopolies. It seeks to prevent the excessive influence of monopolies and oligopoly in the economy, as well as to reduce the negative impact on society. The basis for such regulation is antimonopoly (antitrust) legislation.
Antitrust law is a complex and ramified network of laws, judgments and legal regulations. All these measures are aimed at regulating the actions of firms and corporations in the market for goods and services, in the capital market, cutting off those of them that are recognized as unfair, of poor quality in relation to the rights of producers and consumers, and also simply harmful to society.
Antitrust law can be understood in the narrow and broad sense of the word. In the first case, it is directed against pure monopolies and large oligopolies with excessive monopoly power, as well as at preventing “dishonest” actions that violate generally accepted norms of business communication. In a broad sense, antitrust legislation is directed against all forms of accumulation of monopoly power (including by small firms), all forms of monopoly behavior.
4.1 First antitrust laws
The first laws prohibiting monopoly agreements were passed in Canada (1889) and the United States (1890) - the famous Sherman Act, which gained wide popularity as the "Charter of Economic Freedom." The law sounded very menacing. Any agreements or associations aimed at limiting the freedom of fishing, monopolizing any branch of the economy, were recognized as illegal. The creation of monopolies entailed a fine of up to $ 5,000 (later it was increased to $ 50,000) and imprisonment for up to one year. The same law was passed in Austria and New Zealand. Sherman Act subsequently
supplemented (in 1914, 1939, 1950), it extended to new activities and new forms of associations and agreements.
The Clayton Act (1914) prohibited agreements to restrict the circle of counterparties, the purchase or takeover of firms if this could destroy competition, the creation of holding companies and other agreements. Horizontal mergers (mergers of firms in the same industry) were prohibited. In 1914, the Federal Trade Commission was formed to combat “dishonest” competitive practices and anti-competitive mergers.
In Western Europe (Belgium - 1935; Netherlands - 1935; Denmark - 1937) there were attempts to legislatively control cartel agreements. Here, cartels were seen as a means of fighting “excessive competition,” but laws were designed to prevent abuse of this form of monopoly.
The Keller-Kefauver Act (1950) amended the Clayton Act to prohibit mergers by acquisitions. Not only horizontal mergers were prohibited, but also vertical mergers (mergers of companies that are successive participants in the same production process).
Thus, all these laws were aimed at ensuring a free market, fair competition, and established control over various kinds of agreements. However, few cases on charges of violation of free competition, considered, for example, by American courts, have resulted in the punishment of violators of the law. Very often the courts were on the side of the monopolies. Even the Russian economist I. Yanzhul drew attention in his book on syndicates to the prosperity of associations, which, according to the Sherman law, were recognized as illegal three years after the adoption of this law.
4.2 Modern antitrust regulation
Modern antitrust regulation by state bodies can be summarized in three groups of measures:
The first group of measures - administrative and legal impact in the form of:
· Prohibition of monopoly in any branch of the economy;
· Dissolution of existing monopolistic associations;
· Dismemberment of monopolies into a number of independent industries.
The second group of measures - administrative and economic impact aimed at
· Persecution by the state of traders who carry out price discrimination (overpricing, not caused by production costs);
· Prosecution of merchants who falsify goods through the use of advertising;
· Prohibition of non-economic influence on counterparties by means of collusion with the aim of jointly influencing changes in the market situation.
Third group of measures - economic impact carried out by the state:
· The use of different methods of conducting tax policy, which force the monopoly to set prices for products that are close to the conditions of free competition;
· Encouraging the release of substitute goods. The variety of goods for personal and productive consumption reduces the demand for goods of monopoly production;
· Expansion of the market through the establishment of international economic ties and increased imports; dissemination of scientific and technological knowledge.
American legislation is aimed at ensuring equal starting opportunities for entrepreneurship, at slowing down the process of growing competition into a monopoly. As for the antimonopoly policy of the Russian state, the situation here is as follows. Russia is characterized by a high level of monopolization (state, departmental and sectoral). This is also manifested in the monopoly behavior of the bulk of enterprises, especially after the liberalization of prices in January 1992. An expression of this behavior is the desire to gouge prices with a decrease in production volumes and product quality, reluctance to carry out restructuring, the transition to the development of new technology and new technology, etc. .d.
The modern prosperity of various kinds of monopolies, the emergence of transnational corporations indicate that the formation of monopolies is a natural process, and this is explained by the fact that competition itself - an important element of the market mechanism - generates them, because every competitor in the market dreams of becoming a monopolist.
Conclusion
The modern methodological framework for the analysis of competition in commodity markets has a fairly narrow system of criteria for proving monopoly power. When forming a commodity group, competition between industries with similar technology is not taken into account. Clarification requires methods for determining the geographical boundaries of the relevant market, uniting the markets of competing manufacturers (suppliers) of goods.
In the conditions of the formation of domestic markets, the development and substantiation of criteria for assessing the effectiveness of the market structure from the standpoint of the development of production (consumption) and competition becomes relevant. A clear definition of the types of emerging markets, realistic assessments of the state of development of the market environment, and a mechanism for active regulation of commodity markets are required.
Monopolization analysis problems Russian production put forward the need to study the experience accumulated in countries with developed market economies, and to study the possibilities of its practical application in the domestic conditions of the development of competition. Of particular importance are the methods for analyzing the availability of product consumption when determining the geographical boundaries of the market, as well as assessing the effectiveness of the dimensional structure of production and consumption in the market.
The problem of analyzing the monopolization of production is qualitatively new for our country and, as a result, is insufficiently illuminated in the domestic economic literature. Foreign developments require serious understanding in relation to the Russian specifics of market development.
BIBLIOGRAPHY
1. Babaeva L. Small business in Russia is threatened by ... monopoly // Man and labor. - 1993. - N 8. - S.101-104.
2. State antimonopoly policy: practical experience and objectives of improving legislation // Ros. econom. magazine. - 2000. - N 3. - P.28-33
3. Zhuravleva G.P. Economics: Textbook. M .: Yurist, 2001.505 p .;
4. Government regulation economics: Textbook. allowance / Under the general editorship of G.N. Vlasov and A.M. Zheltova. Nizhny Novgorod, 1998;
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