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_verandaguy • today at 3:07 PM • 1 reply • view on HN

I'm going to assume ignorance rather than snark here.

A natural monopoly is one where a product or service is:

- Widely considered fundamental to the public good (and in most cases, has very inflexible demand, meaning that people will often pay any sum to access it)

- Whose cost overheads are either fixed or grow slower than the variable costs (meaning that the investment required to scale the service not accounting for costs that scale with individual usage benefit from economies of scale)

- Easy to be gamed for profit in the hands of a profit-driven entity (either in the form of extortionate pricing directly, or cost-cutting on things like infrastructure maintenance; a good example here is how PG&E has infamously failed to maintained their power lines in California, leading to large-scale wildfires)

In the modern day, the best example of these are public utilities: water, power, road networks, public transit.

In these cases, the latter two points are used to justify public ownership, which in turn defeats the third point.


Replies

nine_k • today at 3:14 PM

I know. The post I was answering to spoke about predatory companies that privatize the air and water of the world we were born into, or similar. Apparently it was edited to read more sober, which is good.

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