Privatization of the State: Should the state take-over "natural monopolies"?

  • The Economic Argument

    The more government intervention (equity vs. Efficiency) in a given industry, the greater the dead weight loss. A "natural monopoly" is defined as any monopoly where the average total costs from several firms is greater than the average total costs of one firm at the same quantity supplied. Companies can be counted on, to be profit maximizing. In some cases (telecommunications) this can spur innovation, in others, it drives down prices.

  • State Should Run "Natural Monopolies"

    Yes, the State should take over the running of "natural monopolies" as such utilities are a service to the people and should not be subject to a single private company being ble to set prices without any competition at all. At least if the State ran such, prices would be set via tax dollars.

  • Full control not necessary

    I believe that the state or federal government should have some sort of regulation, however I do not believe that natural monopolies should be taken over completely by the state. It doesn't do the industry any good, because one entity is still in full control regardless and without someone to check them, things might get out of balance. There should be regulations in place and the company should be free to do business.

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