Factor prices under monopoly

Abstract:

This paper explains how grants of monopolistic privileges to capitalists can lower labor and land factors' prices compared to what would prevail in a free market environment. Monopoly gains of privileged business owners are not only "extracted" from their clients but also from factor owners. We revisit Rothbardian monopoly price theory and extend it to the realm of factor pricing. Monopolistic grants to capitalists make for market situations where both monopoly of demand for factors and monopoly of supply for their product are present and inextricably intertwined. We conclude that grants of privileges to capitalists can trigger an overall downward pressure on original factor prices.

Año de publicación:

2010

Keywords:

Fuente:

scopus