Monopolies Necessary Because of Scarcity...?

[VoluntaryAmerican]

Here's the excerpt from a history textbook I'm reading that uses it:

What would happen if everyone could own an electric power company?
The idea is not as fanciful as it seems, because when cities were first being
wired for electricity there was stiff competition between competing
companies.

But initially the situation was a mess, and it became immediately apparent
that electricity had to be offered as a limited monopoly, meaning that one
firm or agency was granted the right to all of a city’s power needs. There is
only so much room on utility poles or in underground channels for power
lines; ditto for telephone lines, cable TV wiring, gas pipes, and so forth.
When radio was invented, regulators did not fully understand the growth
potential in the new medium.

I see an obvious contradiction in the text, but am interested in hearing from more of the economically/historically inclined on the forum as I don't know much about this time period.

 

[Travlyr]

I don't know the history behind the Utility Company monopolies but the expansion of public utilities came along with the progressive movement. So, I doubt that "it became immediately apparent that electricity had to be offered as a limited monopoly." My guess is that it became immediately apparent that charging a monthly fee for a highly desirable service was highly profitable and easily controllable by regulation.

The future looks better than the past for eliminating monopolies.

A Nuclear Reactor in Every Home

 

[CaptUSA]

Tesla's ultimate vision of electricity transmission was one without wires. There would be several electrical broadcast stations and you could tune in to receive electricity. Money would be made by those supplying the appliances and transformers needed to change the broadcast signal to a usable form.

Upon fully realizing this idea, J.P. Morgan asked, "Where do I put the meter?" then pulled his funding, scared away other investors, lampooned Tesla in the press, had him accused of being a spy, and ended his career.

Tesla later said he believed that the world was not ready for his ideas, but some time in the future, when the world was finally ready, his work would be embraced.

At any rate, monopolies cannot exist without government intervention. It's not very libertarian of me, but I do see some instances when they serve a purpose. The more densely people are populated, the calls for government intervention are greater. I'd like to keep them as local as possible.

 

[Occam's Banana]

Here's the excerpt from a history textbook I'm reading that uses it:

Well. there's your problem, right there.

 

[Occam's Banana]

I see an obvious contradiction in the text, but am interested in hearing from more of the economically/historically inclined on the forum as I don't know much about this time period.

You don't really need to know anything about the time period, which has nothing to do with the premise being asserted by the text. (And that is ALL the text is doing - it's asserting something. It isn't offering so much as a single shred of evidence for its assertion.) There is a lot of irrelevant blather about how there's a limited amount of room for wires & such. But notice that the author never bothers to explain how the granting of monopoly privileges somehow magically creates more space for those things.

 

[Fermli]

There is only so much room on utility poles or in underground channels for power lines

If this assertion is true, then we can probably agree that people don't want their houses cluttered with many different utility poles. If so, then the free market will decide the proper amount through voluntary contracts and agreements.

The govt can only create a monopoly by threatening violence against those who wish to make agreements to provide electricity. This is immoral.

 

[VoluntaryAmerican]

Well. there's your problem, right there.

Have to read it for school.

Never heard this argument of scarcity before, just wanted to hear some other friendly opinions. I came to the same conclusion as Fermli.

Gave out some rep to you all. Ty.

 

[Occam's Banana]

Have to read it for school.

Never heard this argument of scarcity before, just wanted to hear some other friendly opinions. I came to the same conclusion as Fermli.

Gave out some rep to you all. Ty.

Yeah, I figured. I was just bein' a wise-acre. Explanations of economics by the sort of court-historians who write textbooks are pretty much abysmally ignorant. They're primarily intended as excuses for government policies rather than justifications or explanations of them.