Monopoly

MONOPOLY. - From μοναπώλιον, monopolium.

I. GENERALITIES

A monopoly consists in the exclusive possibility, in fact or in law, in a single subject, of selling certain goods or of trading in them. If the subject holding such a possibility is the State, there is a public monopoly; if instead it is a private person or company, there is a private monopoly. This is natural when it results from the spontaneous course of things, as happens with patented inventions; it is artificial when it is the result of the speculative maneuvers of individuals or associations that seize the entire mass of a given commodity existing on a given market. The forms of monopoly are many and are distinguished from one another by the diversity of the aims they pursue and of the technical procedures by which they are constituted and operate. Among the most complex are trusts. Common to all the different forms, however, is the suppression of competition, which, within proper limits, is the natural stimulus to good production and well-paid 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 of a fiscal nature, as, for example, for the tobacco monopoly, or of a policing nature, as, for example, for the alcohol monopoly. A natural private monopoly arises spontaneously in the field of natural law; positive law establishes its limits, but always with the aim of protecting and fostering the productions of the human intellect.

An artificial monopoly easily offers to the greed for undue gains a well-masked field of speculation and for that very reason economically more favorable and morally more dangerous. It is not, in itself, illicit, although in practice it rarely fails to offend justice, whether commutative or social, or charity.

It is always just when the elements composing it are just, that is, its purposes, if they are rather defensive, and its means of achieving them, if they do not harm the rights of others. The just price is ordinarily the sign that the monopoly is not unjust in its elements: purpose and means. For determining this just price there are two criteria, 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 deducting expenses, it allows a moderate profit to the producer or merchant. The other criterion: the monopoly price is just when it is equal to the price that the now monopolized commodity would have on the same market, if it were however free. That is, the process of monopolizing a commodity must not in any way increase its price. In fact, the advantage that derives from the monopoly to its holder lies only in the fact that in him is concentrated the entire profit of a whole given commodity; since monopolization removes the possibility of any other competitor in the production or commerce of the same commodity from participating in it. Who then does not see that the process of monopolization has no effect at all on the price? While the price concerns only the seller-customer relations, monopolization on the other hand inserts itself only among the seller-competitor relations. Therefore any increase in price that derives from monopolization is unjustified.

The monopoly, in itself, is therefore not illicit. In practice, however: 1) those monopolies that speculate on an increased price are unjust before buyers; 2) those monopolies that, while leaving prices unaltered, stifle competition with unjust or offensive procedures, harm commutative justice or charity in relations with competitors; 3) those monopolies that, without offense to customers or competitors, aim to influence, to the advantage of private interests, the governance of public affairs, as has happened in some American states, on the part of certain trusts, are an injury to social justice. It goes without saying that these different faults can in fact weigh upon the same monopoly.

Finally, it is not superfluous to recall the general principle by virtue of which from the offense of commutative justice there arises, along with the moral fault, also the obligation to repair the damages caused.

Leonardo Azzolini