9/21/2023 0 Comments Natural monopoly definitionI attended neighborhood public schools myself, with mostly fond memories. I personally can see the appeal in the ideal of the neighborhood school, a central gathering place in the community with open doors to all children (even if the history is quite different). So are schools technically “natural” monopolies? And if so, should we break the monopoly over public education? There is no clamor for breaking the power monopoly. (It also helps that Seattle has some of the lowest electricity prices in the nation thanks in part to abundant hydro-electic power.) It wouldn’t make much sense for competitors to run a costly set of alternative power lines down the street. But since moving here a year ago, I’ve been pleased with the service. Residents and businesses don’t have a choice. Where I live in Seattle, electricity is provided by a city-owned utility, Seattle City Light. ![]() This is typically seen as true when big upfront investment is needed to build a physical infrastructure, such as the systems that deliver water or electricity to our homes. Still, monopolies are not always seen as bad - economists have long recognized that there may be “natural monopolies.” This is the concept that for some products or services, particularly commodities, it is most efficient for one entity to provide it to everyone. Beyond that, they seem against the ideal that there should a fair playing field for competition and that Americans deserve choices. Economic theory shows why monopolies are not efficient. Even today, it’s not hard to worry that some of the companies that produce products we use every day - perhaps Google or Facebook - dominate the market so much that is difficult for viable alternatives to compete. Monopolies are generally associated with big corporations - think Standard Oil - that used their large size to squash the competition and fleece the consumer. ![]() It’s not uncommon for advocates seeking change to our nation’s educational system to argue that it is time to “break the monopoly.” Sign up for free newsletters from The 74 to get more like this in your inbox. This story first appeared at The 74, a nonprofit news site covering education. Opinion: Is Public Education a ‘Natural’ Monopoly That Needs to Be Broken Up? We want our stories to be shared as widely as possible - for free.
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