What’s worse: monopoly power or government intervention?

Politicians of all stripes increasingly agree with Karl Marx on one point – that monopolies are an inevitable consequence of free-market capitalism, and must be broken up. Are they right? Stuart Watkins isn’t so sure.

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Free markets left to themselves in a capitalist context are great at producing wealth, but will inevitably tend to concentrate that wealth in ever fewer hands, leading to increasing inequalities of income, power and wealth, and undermining the benefits that might be supposed to flow to consumers, such as cheaper prices. The logic inherent in market exchange must, in other words, progressively undermine the very qualities that the champions of the market promise they will deliver.

This, at least, was the view of Karl Marx. Perhaps surprisingly, it is also the mainstream view today. It is not all that easy to find a mainstream commentator, economist, think-tanker or policymaker who will raise a squeak of protest against the idea. All the main political parties – particularly in the US, where the problem is deemed to be particularly acute – agree that something must be done to curb the rise of the monopolies, namely that the state should step in and break them up, or at least restrain them.

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Stuart Watkins
Comment editor, MoneyWeek

Stuart graduated from the University of Leeds with an honours degree in biochemistry and molecular biology, and from Bath Spa University College with a postgraduate diploma in creative writing. 

He started his career in journalism working on newspapers and magazines for the medical profession before joining MoneyWeek shortly after its first issue appeared in November 2000. He has worked for the magazine ever since, and is now the comment editor. 

He has long had an interest in political economy and philosophy and writes occasional think pieces on this theme for the magazine, as well as a weekly round up of the best blogs in finance. 

His work has appeared in The Lancet and The Idler and in numerous other small-press and online publications.