Monopolists All

Ah, Competition, Thou Art a Jewel

Milton Friedman once famously observed that enterprise owners want all their competitors to face open market competition, whilst they call for regulation of their own business.  Too true.  We have known more than our fair share of business owners spending a good deal of time lobbying government for regulations (to protect consumers, of course) in the attempt to get the "inside track" with officials, so they can secure their own financial market advantage.  Beware the business owner who speaks often about the "public interest".  More often than not the real motive is to put the squeeze on their competitors or prevent competitors coming into "their" patch. 

All business owners are natural monopolists, and should be regarded as such.
  By extension, all of us--whether producers or consumers or employees--are natural monopolists.  We would love a market where we alone were in total control--whether we were buying or selling. Open market competition is the great leveller, which keeps the monopolist inside of us all under control.  Competition keeps us honest.  Competition puts the consumer in control.  Whilst open market competition is not a perfect system, it is a whole lot better than any other yet devised.

A case in point: milk.  Smaller retailers are starting to source milk at competitive prices, operate with a much lower overhead, and sell this "white gold" at considerably less than the duopoly supermarkets.

A boutique grocery will sell milk for at least $1 a bottle cheaper than supermarkets in a deal it says is sustainable and exposes current mark-ups on milk.  Nosh has signed a deal with Green Valley to produce and bottle milk under a new Nosh Essentials own-brand label.

The milk will cost $2.49 for two litres - compared with $3.54 for Home Brand milk and $4.75 Anchor milk at Countdown supermarkets. Yesterday both Consumer NZ and Federated Farmers applauded the venture and said pressure needed to be put on supermarkets' significant margins on milk.

Now, if only we could see Fonterra lose its effectual (government enforced) monopoly on milk production in New Zealand.

And oh, just for the record, Friedman's aphorism had a rider.  He noted that intellectuals were a special class of monopolists.  They reflexively seek freedom for their own views, and rules, restrictions, and regulations for all others.