Britain's turn to free trade was emulated by France in 1860. The French had cautiously set aside 40 million government francs to assist industries that they feared might be harmed by the policy change, but never needed to call upon this fund. Other countries soon followed Britain's and France's lead, ushering in a period of enormous expansion in the economies of Europe, evidenced in rapidly rising standards of living despite rapid population growth. Only toward the end of the century, and especially with the advent of World War I, was there a reactionary movement back toward protectionism.

Legal Monopolies

The term "monopoly," which etymologically means "one seller" (Greek mono + polein), originally denoted a law or governmental policy that coercively prohibits or discourages sales of certain goods by any party other than one designated provider. The word can also denote the provider receiving this privilege. More recently, the term has also been applied more loosely to an individual or firm that becomes the only seller of its product without such coercion. These two meanings, we shall find, are only superficially related and should be treated as distinct concepts. We are principally concerned here with monopolies obtained by governmental coercion (de jure monopolies), which we shall call legal monopolies. They will be contrasted with natural monopolies (market or de facto monopolies) later in this section, and the latter will be addressed again in Section 5.

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