A classic example of an international monopoly is the De Beers diamond syndicate.
By monopolizing production in certain industries, trusts contributed to the further concentration of production and capital. This created a material basis for their influence on producers in other industries and helped to penetrate new industries. There are real conditions for restricting intersectoral competition and the formation of diversified monopolies.
The evolution of single-branch monopolies into multi-branch took place:
first, the combination, ie the association of enterprises of technologically related industries, such as coal, metallurgy, automotive; secondly, through the diversification of production – the penetration of monopolies in the industry, which are not directly related to the main area of their activity. The result of diversification have been concerns – large diversified entities that are gradually gaining ground in both markets and manufacturing.
Formal types of market monopoly of economic entities are bilateral, or bilateral, monopoly, limited and actually, or pure, monopoly.
A bilateral monopoly is formed if there are only a couple of counterparties on the market: one seller – one buyer. They are not threatened by competition from other economic entities: they are full masters in their market, but their economic power is limited because market relations between them are characterized by interdependence.
In a limited monopoly in the industry market there is one seller (monopolist) and several buyers. Here the economic power of the monopoly is stronger than in the case of a bilateral monopoly: although there are few buyers, they compete with each other for the right to enter into market relations with the monopolist.
The greatest economic power in the monopoly itself: the monopolist-seller is opposed by many buyers, the relationship between which is built on a competitive basis. The function of aggregate demand in this case acts as a function of the individual market price of the monopolist. To maximize its profits, the monopolist must achieve a balance between price and quantity of personal narrative ideas high school products, which would form the largest difference between revenue and gross costs. Therefore, its purpose is to find a balance between marginal cost and marginal revenue. The monopolist creates a shortage of commodity supply, which determines the price, which significantly exceeds the marginal cost. A monopoly profit is created. According to the American economist F. Scherer, the losses resulting from the monopolistic distribution of resources are 0.5 to 2 percent of the gross national product of the United States. Here micro- and macroeconomic interests diverge. Monopoly as a microeconomic entity achieves its private goals.
Monopoly as an ideal type of market behavior of economic agents in practice is very rare. However, even today a number of firms operate in the national and world industry markets. which occupy an almost monopoly position there. A classic example of an international monopoly is the De Beers diamond syndicate. which controls 80 to 85 percent of the supply.
Monopolistic industries also include public transport. communication, production and supply of electricity, etc. Such enterprises belong to natural monopolies and at the local level they are subject to state regulation.
In the former USSR, the economic policy of the state was deliberately carried out in the direction of creating conditions for the monopoly position of the producer. The primitive understanding of the historical tendency to increase the socialization of production identified it with large and very large production. As a result, the industry of the former USSR has the world’s highest level of concentration of production. Each company produced an average of 4 times more than the American, and the average number of employees in one company was almost 10 times higher than in the West.
The monopolization of the economy of the former USSR was caused not only by the increase in the concentration of production, but also by the practice of selling industrial products, according to which sales zones were established for producers, where they acted as monopolists. In addition, competition was treated as a defect of developed entrepreneurial commodity production.
Industrial structures in the economy of the command-administrative system have traditionally been characterized by a high level of concentration. Many types of products were produced by a small number of producers, but the centralized determination of prices and volumes of production prevented the emergence of monopoly problems on this basis, which are characteristic of a market economy. However, many companies actively used their monopoly position. including for obtaining additional volumes of investments and other resources.
In addition to the concentration of production, monopoly in the command-administrative system had the following features. First, the state of the general deficit formed the excess demand for the products of most enterprises. A «seller’s market» was formed and each enterprise became a monopoly over its customers, regardless of the number of enterprises in the industry that produced homogeneous products. Second, the entire public sector in the macroeconomic aspect acted as a monopoly, as all enterprises belonged to one owner – the state, which was not interested in competition between them.
Ukraine inherited a highly monopolized. hard centralized management system. Building an effective national economy involves the creation of a legal framework to limit monopolies, prevent unfair competition in business and exercise state control over compliance with antitrust laws.
The market as a polysystem education
The market as a self-sufficient, automatically operating, self-regulating mechanism is an abstraction that to some extent reflects the realities of the XIX century. The modern market is one of the phenomena that determines the complex system of management, in which market laws, numerous regulatory institutions (especially state) and mass consciousness interact closely.
The civilized nature of the market in industrialized countries is determined by a wide arsenal of time-tested and economic practices of legal and moral norms, multifaceted and competent state policy on economic development and social infrastructure, awareness and independence of economic leaders at all levels, legal freedom of economic activity.
The market as a complex, polysystemic education has an extremely rich structure. Its components are markets: goods, capital, financial and credit, currency, labor, information, the so-called shadow, as well as market infrastructure. Each of these elements is able to function in the so-called autonomous mode and therefore has its own structural structure. All of them interact as part of a single system, as they are organically interconnected in formation and development. Violation of this relationship becomes a serious obstacle to the existence of a full market environment.
The market environment is divided by political and administrative characteristics: the markets of individual regions, territories, regions, countries, coalitions, continents, the world market. In addition, agents of different forms of ownership and management may operate within a specific market environment. Accordingly, the market is characterized by the criterion of competitiveness of operating entities as a monopoly or oligopoly.
In the monopoly market there is a dictate of the manufacturer, supplier, seller. However, overproduction of any type of product can continue, and sometimes exacerbate competition for its sale, ie the monopoly is not enough to be interpreted as the antithesis of a market-competitive environment. In addition to monopoly, the enemy of the latter is also a total deficit.
The starting point of the market structure is the market of goods. Its macroeconomic components are the markets of consumer goods and services, investment and capital, and so on.
The market of consumer goods and services is one of the most important components of the commodity market. An integral feature of a civilized market, evidence of its stability and viability is the state of social production. A concrete manifestation of the latter is the balance of supply and demand, saturation of the market with consumer goods and services.
The issue of normalization of the consumer market today for many regions of the world, including our country, is extremely important. In the economy of Ukraine the problem of balance of supply and demand, the consumer market as a whole is caused by disproportions of the corresponding divisions of social production. The former command-and-control system diverted production from human needs and subordinated it to the interests of the military-industrial complex.
In the structure of gross national product, about 45 percent was accounted for by capital investment, increased production resources and military needs; only 55 percent was allocated to the consumption and social needs fund. In world market prices, this ratio is 74: 26. At the same time, in countries with developed market economies, this ratio is 30: 70.
Investment and capital market. The inclusion of investment sectors in the system of market relations has exposed the defects that have accumulated over the decades and manifested themselves in the form of long-term construction, investment dispersion, rising cost of construction facilities, inconsistency of installed machines, equipment, devices …
Market economy in its broadest sense is impossible without the functioning of capital. Excluding it from the sphere of industrial relations, the countries of the command-administrative system oppressed production, its driving forces.
Production management in a market economy is carried out through capital. Otherwise, it is impossible to overcome the many imbalances, the rejection of enterprises of scientific and technical innovations, their unwillingness to reinvest the profits.
The politicization of the economy does not create stable motives for efficient management, does not provide a high social and moral culture of economic entities, does not promote cooperation with foreign capital. The creation of a capital market needs to stimulate, first of all, not borrowed, but entrepreneurial foreign capital (direct investments, portfolio investments).