Mo no po li. Abstract: Monopolization of production and antimonopoly regulation

Introduction

This course work examines the topic “Patterns of monopolization of the economy. Antimonopoly policy". The relevance of this topic is that monopolists act according to certain rules and laws, as a result of which it is possible to deduce the pattern of development of monopolies and prevent the development of monopolization of markets.

Monopolists limit production and set higher prices due to their monopoly position in the market, thereby reducing the standard of living of the population, and antimonopoly legislation cannot always stop attempts to monopolize the market.

A perfectly competitive market has a beneficial effect on the country's economy. The price of goods is determined by market rules of supply and demand, while companies cannot influence the price, thereby accepting it as given.

The purpose of my work is to outline in as much detail as possible the essence and forms of such a phenomenon as monopolization, both negative and positive features, to show the monopolization of Russian markets using a real example, to characterize the antimonopoly policy of the Russian Federation, and also to identify the main problems of antimonopoly regulation in our country and justify your own opinion on this issue.

monopolization antitrust policy

Monopolization

The essence of monopolization, goals and mechanisms of functioning

To understand what monopolization of the economy is, let’s consider who monopolists are and what a monopoly is.

Monopoly (from the Greek monopolium - one sell or the only seller) means the exclusive right to carry out any activity (production, trade, fishing), owned by one person, group of persons, organization or state, allowing one to impose one’s own interests and receive monopoly profits .

Monopolists have lower costs and, selling their products at market prices, receive from such sales not the usual average profit, but excess profit. And their rate of profit is consistently higher than the average market rate of return. This fact reflects their real market dominance.

Monopoly as a type of market structure has the following features:

There is only one company on the market and many buyers of its products;

There are no products that can serve as competitors to those offered by this company;

Full control of the monopolist over the price of goods and sales volume;

The presence of certain barriers to entry of other companies into the market.

The essence of a monopoly is characterized by the following points:

1. Monopoly arises from dominance in production;

2. By dominating production, the monopoly dominates the market;

3. Thanks to monopoly prices, the monopoly receives monopoly high profits.

Monopolization is when a small number of producers control a large part of the market for a particular product, and therefore have the ability to exert some influence on the price of the product.

Certain forms and signs of monopolism are observed even in those economic systems where monopolies do not occupy a dominant position. Let's look at the signs of creating a monopoly. With the advent of new technical inventions, new industries arise, and there is a rapid development of production, mainly in light industry. Changes in the technological method of production lead to the concentration of production, along with which the process of concentration of capital developed intensively.

Concentration of production expresses the internally necessary, stable and essential connections between the development of productive forces and the process of concentration, as a result of which there is a growing concentration of factors of production (material and personal) in large enterprises. The action of this law manifests itself with varying degrees of intensity at all stages of the development of capitalism, the driving force of which is competitive struggle. In order to survive in this struggle and make greater profits, entrepreneurs are forced to introduce new technology and expand the scale of production. At the same time, from the mass of small and medium-sized enterprises, several larger ones are gradually emerging. Sooner or later, competitors face an alternative: either continue the exhausting struggle among themselves, or reach agreement on the scale of production, product prices, sales markets, etc. As a rule, they choose the second path, concluding public and private agreements among themselves, which is one of the most characteristic features of a monopolized economy. Thus, the emergence of monopolistic enterprises is a natural result of the development of productive forces, the evolution of the market, and the operation of the laws of competition.

Monopolies arise not only as a result of the concentration of production and capital, but also on the basis of their centralization. Centralization of production is an increase in the scale of production as a result of the merger of several separate enterprises into one with the establishment of a single management. Centralization of capital is an increase in the size of capital due to the combination or merger of previously independent capitals. A typical example of such an association is joint stock companies. Today, in developed countries of the world, almost all large, the vast majority of medium-sized and even some small enterprises exist in the form of joint-stock companies. True, shares of small and medium-sized companies, as a rule, are sold not on the securities market, but on the over-the-counter market. Such companies are closed joint stock companies.

The functions of a monopoly are determined by their qualitative and quantitative characteristics, organizational forms, the nature of relations with outsider competitors, market conditions, the relationship between supply and demand, the needs and interests of sellers and buyers, the availability of resources and government economic policy. The functions of monopolies are influenced by the amount of capital, the scientific and technical potential of the company, the state of the market infrastructure, access to information, competition and public opinion.

The most important function of monopolization is regulation of one’s own business activity and strategy, choice of development priorities, control over resources and products that compete with one’s own.

To quantitatively characterize monopoly power, the following are used:

1) Lerner’s indicator of monopoly power L = (P-MC)/P, which shows the degree to which the price of a product exceeds the marginal cost of its production.0

2) index of monopoly power (M), which shows the degree to which prices exceed long-term average costs (LAC): M = (P-LAC)/P;

3) Herfindahl-Fishman index, which determines the degree of market concentration: H = P21 + P22 + ... + P2n, where H is the concentration indicator, Pn is the firm’s percentage share in the market or share in the industry supply. The maximum value of H = 10000. If H is less than 1000, then the market is considered unconcentrated. Such a market requires at least 10 companies, the share of the largest is 31%, the two largest - no more than 44%, three - 54%, four - no more than 63%. If H is 1800, then the industry is considered highly monopolized.

Sources or factors of monopoly power:

1. The company's share in market supply;

2. The absence of analogues of goods produced by a company with monopoly power;

3. Elasticity of market demand. The lower the elasticity of demand for a firm's product, the greater the monopoly power of that firm in the market.

is the process by which a company occupies a dominant position in the market. According to our antitrust laws, a dominant market position is considered to be a sector of 65% of the total market. As a rule, it is difficult for one company to achieve a monopoly position in the market. And in order to control the market and set its own conditions, the media concentrate, integrate and do all sorts of similar abominations.
The process is simple - if the state does not limit and regulate companies, then they monopolize economic sectors. If there are no media regulations, then there will be monopolization by the big multimedia companies.
In short, there is only one way out - we just need normal antimonopoly legislation and a couple of articles in the law “on the media.”
The question is: what is wrong with these same concentrations and monopolizations? On the one hand, it is clear that by uniting, the media get more opportunities to survive and resist any market or non-market crap. But on the other hand, this answer to the question is the end of pluralism of opinions, and this is not good for civil society.

Examples of monopolies

The word “monopoly” originated in Ancient Greece and translated means “I sell one.”

The definition of monopoly implies the existence of a business niche where one manufacturer dominates, which regulates the quantity of goods and their prices.

Pure monopoly companies are very rare. This is due to the fact that for almost any product or service a substitute can be found.

For example, the natural monopoly is the metro. If the subway infrastructure is divided between two or three competing firms, real chaos will begin. But when the metro services are no longer suitable for the population, people will be able to get to their destinations by buses, trams, cars, and trains.

That is, the metro is a monopolist among underground, high-speed transport, but in the field of passenger transportation it is not such.

The state of the economy in which one subject dominates, typical for housing and communal services, the public sector, and production of products that require careful control.

When considering what a monopoly is, one cannot ignore another related concept - “oligopoly”. This condition is much more common in economics. Oligopoly market divided between several companies. With the collusion of the main players, the market’s characteristics approach a monopoly (for example, mobile operators).

Classic - aircraft and shipbuilding, weapons production. Here it happens between two or three suppliers.

Types and forms of monopolies

The following forms of monopolies are distinguished:

Natural- arises when a business in the long term can only serve the entire market. An example is rail transportation. Typically, business activities require large expenses at the initial stage.
Artificial- usually created when several companies merge. The collusion of enterprises makes it possible to eliminate competitors faster. An educated structure resorts to such methods as prices, economic boycott, price maneuvering, industrial espionage, and speculation in securities.
Closed- protected from competitors by law. Restrictions may relate to copyright, certification, taxation, transfer of unique rights to own and use resources, etc.
Open- the only supplier with no legal barriers to competition. Typical for companies offering new, innovative products that have no analogues at the moment.
Double sided— a trading platform with one seller and one buyer. Both sides have power over the market. As a result, the outcome of the transaction depends on the negotiating ability of each participant.

There are other classification options, for example, they are divided into two types by type of ownership:

private
state

Or according to territorial based on 4 types:

local
regional
national
extraterritorial (global)

If we consider an artificial monopoly, when a number of enterprises (companies) unite, then they say about various forms of such mergers:

Monopoly in the history of social development

People noticed the benefits of monopoly almost immediately with the advent of exchange and the emergence of market relations. In the absence of competition, product prices can be raised.

Ancient Greek philosopher Aristotle believed in the creation of a monopoly and farming. In one of his works, as an example, the sage talks about a subject who received money “at interest.” To make a profit, an enterprising man bought up all the iron in the workshops, and then resold it at a premium to merchants who arrived from other places.

The thinker also mentions attempts by the state to regulate the monopoly. The cunning seller was expelled from Sicily by the government.

In European countries in the Middle Ages, monopolism developed in two directions - as a result of the creation of guilds and through the issuance of royal privileges:

Shop is an association of artisans. He supervised the production of the participants' products. The main task of the organization was to create conditions for the existence of artisans. The workshops did not allow competitors into their markets and set market prices for the goods they produced.
Royal privileges gave the exclusive right to sell or produce certain types of products (services). Merchants and industrialists were glad to get such a privilege in order to get rid of competitors, and the king received money into the treasury. Moreover, many royal decrees were absurd and stupid, which led to this in some countries.

In the 19th century, as a result of the rapid development of production, competition between manufacturers intensified. Cost reductions have led to the consolidation of factories and plants. Remaining players united into various communities( , pools), which acted as monopolists.

Monopolies in the history of Russia are a repetition of global trends. But most of the processes in our country took place late and were often brought from outside. Thus, in Tsarist Russia, the production of alcoholic beverages was exclusively a state function.

And the first industrial syndicate arose in St. Petersburg in 1886 with the participation of German partners. He united 6 companies producing nails and wire. Later, a sugar syndicate was born, then Prodamet, Produgol, Krovlya, Med, Prodvagon, etc.

Reasons for monopoly

The desire to monopolize the market is normal for any business. It is inherent in the very nature of entrepreneurial activity, the main goal of which is to obtain maximum profit. Monopolies are created both naturally and artificially.

Additional factors, contributing to the development of monopolism, can be:

large expenses for creating a business that do not pay off in a competitive environment;
establishment by the government of legislative barriers to business activities - certification, licensing, ;
policies that protect domestic producers from foreign competitors;
consolidation of companies as a result of acquisitions and mergers.

Antimonopoly legislation

Lack of competition leads to negative consequences in society:

inefficient use of resources;
product shortages;
unfair distribution of income;
lack of incentive to develop new technologies.

Therefore, governments are trying limit the emergence of monopolies. Special government bodies monitor the level of competition in the market, control prices, and prevent small firms from becoming dependent on large players.

Antitrust laws exist in most countries of the world. It protects the interests of consumers and promotes economic prosperity.

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