MONOPOLY. — From μονασώλων, monopolium.
I. GENERALITIES
Monopoly consists in the exclusive possibility, in fact or in law, vested in a single subject, of selling certain goods or trading in them. If the subject possessing this possibility is the State, there is a public monopoly; if instead it is a private individual or company, there is a private monopoly. The latter is natural when it results from the spontaneous course of events, as occurs with patented inventions; it is artificial when it is the result of the speculative maneuvers of individuals or associations that take possession of the entire supply of a given commodity existing in a given market. The forms of monopoly are many, and they differ from one another in the variety of the aims they pursue and the technical procedures by which they are established and operate. Among the most complex are the trusts. All the different forms, however, have in common the suppression of competition, which, within proper limits, is a natural stimulus to sound production and fairly remunerated labor.
II. MORALITY
A public monopoly can be justified only by the requirements of the common good. The authority then determines its limits on the basis of its concrete purposes, which may be either fiscal in nature, as, for example, in the case of the tobacco monopoly, or related to public order, as, for example, in the case of the alcohol monopoly. A natural private monopoly arises spontaneously in the sphere of natural law; positive law establishes its limits, but always with the aim of protecting and fostering the products of human ingenuity.An artificial monopoly readily offers the cupidity for illicit profits a well-disguised field for speculation and, precisely for that reason, one that is economically more advantageous and morally more dangerous. It is not in itself illicit, although in practice it rarely fails to offend commutative or social justice, or charity.
It is always just when the elements composing it are just—that is, its purposes, if they are chiefly defensive, and its means of attaining them, if they do not infringe upon the rights of others. The just price is ordinarily the sign that the monopoly is not unjust in its elements: purposes and means. Two criteria are available for determining this just price, to be used appropriately, now one and now the other, according to the different cases. First criterion: like any other price, the monopoly price is also just when, in the judgment of experts, after expenses have been deducted, it permits the producer or merchant a moderate profit. The other criterion: the monopoly price is just when it is equal to the price that the commodity now monopolized would have on the same market if it were free. That is, the monopolization of a commodity must in no way increase its price. Indeed, the advantage accruing from the monopoly to its holder lies solely in the fact that the entire profit from a given commodity is concentrated in his hands; for monopolization deprives every other competitor in the production or trade of the same commodity of the possibility of sharing in II. Who does not see, then, that the process of monopolization has no influence whatsoever on the price? While price concerns only the seller-customer relationship, monopolization intervenes only among relationships between sellers. Therefore, any increase in price resulting from monopolization is unjustified.
A monopoly, in itself, is therefore not illicit. In practice, however: 1) those monopolies that speculate by increasing prices are unjust toward buyers; 2) those monopolies that, while leaving prices unchanged, stifle competition through unjust or offensive methods violate commutative justice or charity in their relations with competitors; 3) those monopolies that, without offending customers or competitors, seek to influence the government of public affairs to the advantage of private interests constitute an injury to social justice, as occurred in certain American states at the hands of certain trusts. It goes without saying that these various faults may in fact burden the same monopoly.
Finally, it is not superfluous to recall the general principle according to which an offense against commutative justice gives rise, together with moral guilt, to the obligation to repair the damage caused.