Austrians vs. Neoclassicists on Monopolies

A monopoly is often seen as one of the gravest and most concerning manifestations of market failure

• In the neoclassical tradition, the existence of a monopolist in a market is generally seen as sufficient justification for government intervention to put a halt to the monopolist's exploitative ways
• The Austrian tradition, however, has historically remained skeptical of this alleged problem of monopoly.
• Two of the most prolific Austrian theorists, Murray Rothbard and Israel Kirzner, offer an alternative perspective on this important economic issue.
  1. The traditional prescription for the monopoly problem is for the government to force the monopolist to behave by instituting price ceilings, by nationalizing or municipalizing the monopolist in the case of a "natural monopoly," or by smashing up the monopolist into smaller companies and creating a competitive market from the remnants.
  2. Unless he has a monopoly over a good's inputs, the monopolist is in no better position to achieve a monopoly price than any other producer in any other market.
  3. Because of his position, this producer is able to raise the good's price to a higher "monopoly price" and reap greater profits than he would have achieved on the competitive market.
  4. Monopoly … in a market free of government obstacles to entry, means for us the position of a producer whose exclusive control over necessary inputs blocks competitive entry into the production of his product.
  5. In the market, there is no discernible, identifiable competitive price, and therefore there is no way of distinguishing, even conceptually, any given price as a "monopoly price." The alleged "competitive price" can be identified neither by the producer himself nor by the disinterested observer.
  6. The critical question is this: Is the market price, 0P, a "competitive price" or a "monopoly price"? The answer is that there is no way of knowing.
  7. There is no definable monopoly price to contrast with a competitive price, as on the market there is only the market price. 

https://mises.org/wire/austrians-vs-neoclassicists-monopolies