The part the anti-market participants in this thread wholly fail to understand is that the market’s nature is self-regulating in the vast majority of cases.
Let’s use physics as an analogy. A physical system is stable when upsets to the system create opposing forces that tend to push the system back to its original state. Push a pendulum, and gravity works against the motion pulling the weight back to the center. Eventually, everything returns to its resting state. In an unstable system (say, a ball at the top of a hill), if you disturb the system, forces keep building to increase the change.
Markets exhibit properties of inherent stability, because they have feedback. Let’s take the collusion example. Two companies collude to raise prices. What happens? Their profit margins go up, and that attracts new entrants to the market. But also, their prices go up, which causes people to buy less of their product and shift to alternatives, limiting the damage (and eating their market share).
As a case in point, take Canada Nickel. International Nickel of Canada at one point owned a large percentage of the world’s nickel reserves. Yet it didn’t charge monopoly prices. How come? There are several reasons. One is that there are alternatives to nickel for many products, so raising the price of nickel above the competitive market price would cause many consumers of nickel to switch to other products, eroding the nickel market. For another a high price for nickel would stimulate exploration and production of nickel elsewhere, just as the high price of oil from OPEC’s cartel has stimulated exploration of oil in the deep sea and the development of oil sands and oil shales (and the growth of alternatives to oil like solar, wind, and nuclear power).
I could not find a single recorded instance of a monopoly being created and held by the systematic buyout of competitors. One of the reasons for this is again feedback. Once the competitors realize that a large company is trying to buy them out, they start to price themselves accordingly. The cost to buy out that last company is going to be really, really high. If the big company pays it, it has increased its own cost structure and opened the door for new competitors to take advantage of the higher prices they can now charge because their competition is saddled with a high-cost infrastructure.
And so it goes. Profits in competitive markets are driven down to the lowest sustainable level by the same kinds of forces that drive a pendulum back to rest.
As another example, take Starbucks. Starbucks expanded very quickly and became almost ubiquitous. But what happened was that the high profits of Starbucks caused property owners to charge very high rents for property that Starbucks wanted. High enough that eventually Starbucks’ profitability declined to the typical level seen for such specialty stores. And in addition, their high-priced coffee model boxed them into a corner (they pay high rents, so they can’t sell cheap coffee), so now competitors of all sorts are attacking the Starbucks business model.
This form of regulatory power is MUCH stronger than that which the government asserts on the market. My company spends most of its time working on improving its products and cutting costs, purely because of market pressure. I work for one of the biggest companies in the world, but I have NEVER seen them try to establish a monopoly. I sit in on quite a few management/finance meetings where mergers and acquisitions are discussed. It’s never done just to eliminate a competitor. Almost always, when we buy a company it’s to fill a strategic gap in our product line or to acquire expertise or facilities that we can use to make our products better and more competitive.
As a matter of fact, managers are taught that having competitors is a good thing. It keeps you lean and on your toes. The competitor’s research and development benefits you as well - especially when they spend money on a product that fails. You get to learn from that failure at no cost. Competitors also legitimize markets and part of their ad spending benefits everyone as it helps build up the entire market.
As an example, consider Henry Ford. The Model T had a near monopoly on the auto market. Ford tried to trade on that by cutting costs and ignoring consumer desires in exchange for saving money. He famously said, “You can have any color of Model T you want - so long as it’s black.” He refused to update the style of the car, because that would increase his tooling costs. He refused to add different colors, because color changeover is expensive.
The result of his refusal to meet market demands was that General Motors took advantage of the hole he left in the market and started introducing more stylish, colorful cars. Their market share rapidly ate into Ford’s. Ford was forced by the power of the market to do what he didn’t want to do, which was to spend more money on tooling and finishing. He had no choice - the market had spoken. Even the biggest car manufacturer, the inventor of the modern assembly line, who owned a huge fraction of the auto market, was utterly powerless to stop the market from getting what it wanted.
Does this always work? No. There are true cases of monopoly. Usually, they require government intervention to maintain them. But sometimes a natural monopoly can arise because of the nature of a specific market. And there is role for government regulation to prevent this. But these types of markets are rare, and generally obvious. We know them when we see them.
But there is no excuse to use the existence of a few potential monopolies in very specific areas as an excuse to bring the heavy hand of government regulation down on every player in the marketplace.