There is no such thing as a permanent monopoly

The German car industry is showing, nicely, the truth of one of the contentions of the late Robert Bork. There is simply no such thing as a permanent monopoly:

But the real threat to German excellence did not come from within. In the early noughties, when the California-based Elon Musk placed a risky bet on Tesla, traditional automakers were staying away from electric vehicles because they did not want to cannibalise existing business, and the Germans were particularly hesitant. The new technology threatened to obliterate their combustible-engine edge and to endanger German suppliers whose components weren’t needed in electric vehicles (EVs). Tesla, backed by the might of the US financial markets, is now worth over $1tn, about seven times as much as Daimler, Volkswagen and BMW combined.

It’s entirely possible for someone to dominate a market at any particular point in time. Why they are able to do that will depend. It might be that they simply are the best at what is being done. There might be some legal barrier preventing competition. The entire set of economic institutions might be so borked as to prevent entry into that no longer free market. Which of these is true will - OK, should - determine what, if anything, is to be done about such market dominance. If it’s produced by excellence then leave well be, obviously. If it’s manipulation, whether by capitalists or governance then change the system that allows that.

But Bork did point out - and didn’t people laugh when he said it about Microsoft - that no monopoly is permanent. Technology changes therefore any dominance is subject to the underlying technology getting away from the domineering producer. Android happened to Microsoft. Electric vehicles are happening to the German car makers.

No monopoly is, ever, permanent. Something that needs to be kept in mind when considering action against dominance at any one point in time. We have this on fair authority after all:

While we look not at the things which are seen, but at the things which are not seen: for the things which are seen are temporal; but the things which are not seen are eternal.

Messing up the entire legal and incentive structure of the economy in order to deal with some inevitably temporary issue of dominance might not be a good idea….

Tim Worstall