- Question
What are the pros and cons of monopolies?
The word monopolies has negative connotations in economic history, but recently monopolies have been praised by people such as Warren Buffett and Peter Thiel. The arguments for and against are not new, but now they have better empirical support.
Monopolies are good for the economy
This position holds that monopolies can be good for the economy. It argues that their scale and profits provide the capital and incentives to fund research and development, driving innovation and stimulating capitalism in ways smaller firms cannot.
Monopolies are damaging to economies
This position holds that monopolies are damaging to economies. It argues that competition is central to a healthy economy, and that monopolies choke it — reducing innovation and entrepreneurship, suppressing workers' wages, and driving prices higher for consumers.