Subject:
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Re: debate fodder from an unusual source...
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Tue, 15 Oct 2002 10:53:35 GMT
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Viewed:
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335 times
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Economist have a concept called "natural monopoly" which refers to a industry
where the capital investment is so large that it is not in society's best
interest for there to be one than one supplier. The classic example is the
local power industry (Most utilities are natural monopolies). It would be
terribly wasteful to have two sets of power lines running to each house, so
each area is serviced by a single company under a "fanchise" (not quite the
right term) arangement regulated by the local, state and federal (US model)
governments. The water and sewage systems are another example (typically owned
and operated by local governments is the US). I am a very strong free market
guy, but I recognize the practical need for this type of arrangement.
So here is the question for debate:
Are airlines natural monopolies?
To put it specifically, Would it be more efficient for air travel to be a
utility with each route managed by a single company. Rates would be regulated
to provide the suppliers with a reasonable return on assets (The basis for
utility rates)
Lester
PS: Railroads pose a similar question
PPS: An interesting side note: Many if not most houses in the US have both
telephone (wires) and cable (originally for TV). Since current and anticipated
technology make these systems redundant. Should we phase out the one that is
more expensize to maintain (this would be a hugh expense because of existing
infa-structure in existing buildings)
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Message has 3 Replies:
 | | Re: debate fodder from an unusual source...
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| (...) I assume here you are taking about power supply rather than generation? Likewise for water supply and sewage collection - rather than water and sewerage treatment? (...) For some cities the airports may well be. But I think that as long as (...) (22 years ago, 15-Oct-02, to lugnet.off-topic.debate)
| | | Re: debate fodder from an unusual source...
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| (...) *some* economists do. Others reject the notion of a natural monopoly. The classic example is the (...) Just as a side note, I've said in the past that I didn't buy the natural monopoly argument, and have argued in detail against specific (...) (22 years ago, 15-Oct-02, to lugnet.off-topic.debate)
| | | Re: debate fodder from an unusual source...
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| (...) What are the other criteria used to determine/justify these "natural monopolies?" (...) My coworker has a power line running to his house that he occasionally uses during peak use times on the weekend, but primarily generates his own power. If (...) (22 years ago, 15-Oct-02, to lugnet.off-topic.debate)
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Message is in Reply To:
| | Re: debate fodder from an unusual source...
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| (...) There was actually a pretty good opinion piece, I think in the NYT (but possibly in Newsweek), that discussed the disconnect between air travel and train service. It laid out the numbers and pointed out that since 1936, the airline industry (...) (22 years ago, 15-Oct-02, to lugnet.off-topic.debate)
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