Essentials of Economics by Faustino Ballvé

Author:Faustino Ballvé [Faustino Ballvé]
Language: eng
Format: epub, pdf
ISBN: 978-1-61016-104-6
Publisher: D. Van Nostrand Company
Published: 1963-01-14T16:00:00+00:00

* [The reader is reminded that the original Spanish-language edition of this book was published in 1956.—TRANSLATOR.]

6

Monopoly, Crises, and Unemployment

Monopoly and the French Revolution. Monopoly as a political phenomenon. Business-cycle theories. Boom and depression. Easy money. Unemployment in the modern world. Theories of unemployment. Keynes. Depression and unemployment.

The scientific study of economic phenomena began contemporaneously with the emergence of our modern industrial economy, and the subsequent development of economics has paralleled technological improvements in production as well as progress in such auxiliary fields as communications and banking. The economic theory with which we are familiar today is no less an offspring of the Industrial Revolution than is our actual economic system, which, rightly or wrongly, has been dubbed capitalism.

Among the phenomena that economists encountered in carrying on their investigations were monopolies, crises, and unemployment. They consequently took it for granted that these abnormalities are inherent characteristics of the capitalist system, or the economy of free enterprise. It is therefore appropriate to devote some attention to the nature of these three phenomena in order to see whether they are, in fact, compatible with modern capitalism, and whether they are produced by it or by other causes.

The word “monopoly” (from the Greek monos = only, and polein = to sell) means literally “one and only seller.” Exclusive control can be exercised over a work of art, an invention, a whole class of commodities, or the supply of labor in a particular enterprise (as happens when labor unions bar from employment in it, by means of a “closed shop” contract, anyone outside their own ranks). In economics the term “monopoly” is used to denote any situation that interferes with the free play of supply and demand. Generally, however, what one has in mind in using the term is only a monopoly on the side of the suppliers of commodities in the market. One speaks of a tobacco monopoly, a match monopoly, a gasoline monopoly, a meat monopoly, etc., meaning that a person or a group of persons—or the government itself—has complete control over the supply of these commodities or at least a control sufficiently great to enable the monopolist to impose his prices on the public and to regulate consumption accordingly, limiting it to the quantity that he deigns to make available on the market.

Monopoly is as old as history. Already in the most ancient communities we find state monopolies of salt, of precious metals, of perfumes and dyes, and even, during the decline of the Roman Empire, of articles of prime necessity like cloth and cereals.

During the Middle Ages the guilds enjoyed a double monopoly: they controlled production, and they monopolized the labor force in each enterprise. The law granted the masters of the guilds the exclusive right to carry on production, to admit or reject new members, to educate the apprentices, and to train them to become masters. This situation continued into the era of the absolute monarchs, although the latter gradually arrogated to themselves many of the powers previously enjoyed

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.