We Want Competition, Not Just a Private Monopoly

This is a must-read column from Steven Horwitz. He notes that there’s a clear distinction between a private enterprise in a free market, and a government sanctioned private monopoly. A very big difference.

I also encountered the concept of “several property” in Hayek’s classic The Fatal Conceit: The Errors of Socialism.

The Problem with Privatization – The Freeman – Ideas On Liberty: Classical liberals commonly favor “privatization” of many government activities. Their case, of course, is that the private sector would provide goods and services at lower cost and of higher quality than government can. Since classical liberals are right about this, why do I think there’s a problem with privatization?

The answer is that the call for privatization does not get at the real reason the private sector works better than the political sector. The great advantage of the private sector is not private ownership per se but that private owners compete with one another. Classical liberals would do better to contrast not the “private” and “public” sectors, but the “competitive” and “monopolistic” sectors. If the goal is efficiency in delivering the goods, private ownership is a necessary but not a sufficient condition. Instead of calling for the “privatization” of government services, classical liberals should be calling for “de-monopolization.”