ABSTRACT OF PAPER
Title: Past and present free market economists on natural monopoly
Author: MOSCA Manuela
There are a number of economists who believe that a natural monopoly should not be considered a market failure. These economists belong to different schools of thought. One of them is the Chicago school of thought, who rejects government regulation, public enterprise, and most antitrust policies (Posner 1976, Bork 1978). Another approach is the contestable market approach, which implies that industry structure provides no a priori rationale for regulation and antitrust (Baumol, Panzar and Willig 1982). The third approach is the Austrian school of thought, which is in favour of a total repeal of antitrust, even for the cases of natural monopoly due to network effects (Armentano 1999). In the past a natural monopoly was recognized and identified by many economists, from Senior (1836) to Edgeworth (1913), who had their own opinions on the policies to be followed in those situations. The aim of this paper is to compare the ideas of free market economists in the past with free market economists in the present on their rationale for government intervention in the case of natural monopolies.
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