Freedom, Society, and State - Ludwig von Mises Institute

susceptIble it is to losses that would preclude further
expansion. Since monopolies and cartels eliminate the
market in the area of their operations, they would have
no economic signals to guide them in allocating their
resources or making investment decisions. Since this
means that their decisions would be economically arbitrary
they would suffer severe losses and, in the absence
of governmental protection, collapse. There is,
in other words, no economic difference between a monopoly
and a socialist economy and both would collapse
for the samereas 0 n : the a bsenceofee 0 nom i c ca 1cui a ­
tion.(57)
Consequently, the libertarian believes that the
size of the firm is limited by the limits of calcula
b iii t y and den i esthat the rna r ke t ena b Iesany fir m,
regardless of size, to exploit the consumer or victimize
society. The popular fear of the "tyranny of
we a I t h" u n d e r the f r e e rna r ketis theref 0 rese en asan
illusion.(58)
5. GOVERNMENT AND UTILITY
There is one significant ramification of the libertarian
monopoly theory. Government itself is a
m0 n 0 pol Y• Hen ce, .therei s no wa y for i t rat iona I 1Y to
a I I 0 cat e "i t s" res 0 ur c e s • I t rna y, for examp Ie, c I aim
tha t taxes must be raised because there is a "shortage"
o froads, pol ice, tea c her s, etc. Howe ver, a r g uesthe
anarchist, it actually has no idea whether there really
is a s hor tage of these th i ngs, too many of them or jus t
enough, since ther e is no market test for these goods
and services and therefore no way for the consumers to
evaluate their utility. Demands may be made on the polit
i c a I s y stem, but t his inn0 wa y sol ve s the prob I em •
Pol i tic s res p 0 n d s t 0 i n flue nee and, a s rna ny ha ve a r ­
gued, the influence any group is able to exert is near­
I y the rever s e 0fit s s i z e . As Ma ncur 0 Ison has po i n t ­
ed out, an individual in a large group "cannot make a
noticeable contribution to the group, and since no one
i nth e gr 0 up wi I 1 rea c t i f he rna ke s no con t ributi 0 n, he
has no incentive to contribute."(S9) A smaller group,
of course, is easier to organize. And, further, not
only are individuals in a smaller group able to see the
impact 0 f the i r con t r i bu t ion, butit is a Iso ea s i e r to
exert social pressure on the members to insure that
each individual continues to do his part. Hence, the
smaller, better organized groups are usually able to
exert greater pressure on the political system. The
result is that, even If the political leaders honestly
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