alt Hacker NewsCleveland has had two sets of power lines for a long time (despite FirstEnergy’s many attempts to shut down Cleveland Public Power). It’s not necessarily a natural monopoly.
Instead it one where incumbents try very hard to convince everyone it must be a monopoly.
Replies
OGWhales • today at 6:55 PM
I don't think 1 vs 2 players is meaningful enough difference to make that an actual competitive market.
> It’s not necessarily a natural monopoly.
Having a private market does not make something not a natural monopoly. Healthcare, education, land, and energy are famously cases where market forces do not find a lowest possible price floor.
the main things that cause a natural monopoly are things like high initial cost, a lower cost per unit created and the most important one a sub-additive cost function.
If you have a single healthcare provider for example and 2 hospitals, you can have 1 IT team to handle both medical records, that is one engineering team, 1 database, 1 security team and then you have the costs that cannot be saved such as doctors nurses and staff in each hospital.
Meanwhile if you have 2 healthcare providers you need 2 engineering teams, 2 dbs, and 2 cyber teams while the cost of doctors, nurses and staff remains untouched.
That added cost makes the "competition" subadditive. You lose more than you gain by having multiple players in the market. Which is why American's spend more in healthcare than single payer systems like the ones in Europe. Just plain old boring math. And its not even a new concept. Adam Smith calls landlords "leeches" in his works