Despite the term's etymology, the monopolistic provider is in some cases not technically a "seller." If the good or service is financed entirely from tax funds, and if the quantity received by any user is unrelated to the tax he or she pays, then that user has not truly purchased the good; that is, no market exchange has taken place. For example, state-run schools may be available to the children of all citizens in a district and financed by property taxes. Families receive educational benefits even if they own no taxable property, while property owners are forced to pay for the system even if they have no children. Thus the good is no longer provided through market transactions. As we have already noted, however, such a system has a powerful effect on the marketplace, inasmuch as it deters true sellers from also providing educational services and thereby quashes competition (p. 4.11:12). We are therefore well justified in referring to such provision of "free" governmental education as a "monopoly."     Next page
Previous pagePrevious Open Review window