Saturday, January 7, 2012

Some Questions About Government - Arnold Kling

Some Questions About Government

Are government monopolies efficient? In theory, in the business world monopoly is efficient, because it eliminates duplicate overhead. (Monopoly is inefficient in theory because the monopolist charges a price that is too high, but we might suppose that government will not do that.) In practice, however, monopoly is inefficient because without the pressure of competition, business practices tend to stagnate. Is government immune from this stagnation problem, and if so, how?

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