The Friedman monopoly.

Another book recommendation but this time, i'll focus on Friedman's chapter on monopoly in Capitalism and Freedom.

It is amazing how well his work lasts - and also revealing of the different environment in which it was written. For example, in his world (at the time of writing), the biggest focus of monopoly was manufacturing in general and auto manufacturing in particular. Today this is no longer true and the focus has shifted to the big-tech companies. But Friedman's general principles for analysing monopoly and understanding the misunderstandings that are general in the lay population, remain absolutely the same today as they were then.

At the base is the fact that left-liberals see it as a matter of the government protecting us from big business, while free-market classical liberals see it as competitive business (big and small) protecting us from big government, including the tendency of big government and big business to get together to exploit the consuming public in general. In one view big government is the solution, in the other it is the problem, the only problem. These two views could not be more diametrically opposed.

Friedman's remarks on the meaning of competition are also interesting. Though somewhat indirect, he explains that the case of perfect competition as analysed in standard economics courses, are pretty much irrelevant to deciding whether a real world industry, or company, is competitive or monopolistic. This is because the perfect competition model is an ideal model that abstracts completely from the real world forces of competition, in particular, product differentiation and innovation - what we might call Schumpetarian competition. So, clearly, he was aware of, or arrives independently at a Hayekian conception of competition, though he characteristically refrains from expanding on this or of referring to this important aspect of Hayek's work.