The most important condition for the development of the economy is the presence of high-quality and he althy competition. Situations when some organizations seek to monopolize their activities are unacceptable. Every developed country should have an antimonopoly policy - the work of state authorities to prevent the concentration of individual possessions and powers in someone else's hands.
The concept of monopoly
The antimonopoly policy of the state is aimed at preventing and preventing the emergence of monopoly enterprises. A monopoly is a large organization that entirely controls the production and sale of certain products. Due to the monopoly enterprise, there is no competition in the relevant market area.
Monopolies in world history were considered the norm. The fact is that in most countries production was controlled by the state. Often, either the government itself or some of its entourage formed large organizations that occupied the entiremarket. As a result, economic development was slow, there was no competition, and the planned form of the economy was preserved in the state.
The first notable opponent of monopolies was the English economist Adam Smith. He declared the inadmissibility of seizing some sphere of influence, since any such action can be regarded as a factor threatening the economic development of the state. Only support for he althy competition and competent planning of antitrust policy will effectively solve the problem of stagnation.
This opinion is shared today by most experts. Next, we will consider forms of restricting competition and ways to implement antimonopoly policy.
History of antitrust regulation
What is typical for the development of competition in the economic sphere of Russia? Attempts to create antitrust policy and antitrust laws were made as early as 1908. Then a law was introduced in the Empire, very similar to the American provisions of Sherman. As expected, most Russian entrepreneurs reacted negatively to the law and did not pass it.
In the USSR, laws on antimonopoly policy and support of competition were not adopted in principle. The country was dominated by a planned economy, and therefore any kind of entrepreneurship was out of the question. The state independently ensured the reduction of resource costs and the cost of production to an extremely low level. The consequence of this policy was the deepest stagnationon the national market of the USSR.
The high level of monopolization persisted even after the collapse of the USSR. State monopolies were transformed into joint-stock companies through accelerated privatization. However, all shares were bought not by groups of people, but by specific persons. As a result, enterprises have concentrated in the hands of individual owners.
In 1991, the Law "On Competition and Antimonopoly Policy Objectives" was adopted. It laid down the foundations of state policy aimed at combating the restriction of competition. The principles and methods of such a struggle will be discussed later.
Suppression of Monopoly Policy: General Description
The state is obliged to protect the competitive market. This is possible only by conducting a quality antimonopoly policy. Individual authorities must apply a range of economic, social, legal, tax and financial measures. Only by acting in different areas, the state will be able to carry out high-quality procedures for the prevention and suppression of competition restrictions.
The problem of monopolization has a certain duality. In conditions of increased concentration of production, tendencies for its reduction are obtained, which leads to rising prices and a crisis. At the same time, concentration leads to mass production of products, and as a result - to lower production costs and save basic types of resources.
The state, whose goal is to conduct and develop antimonopoly policy, must take into account allfeatures and forms of influence of monopolies on the national market. For example, care must be taken when limiting natural monopolies.
The fight against monopolies contributes to economic, technological and social progress. A simple parallel can be drawn here: the elimination of monopolies leads to increased market competition, which generates an increase in supply and demand. Prices are falling, public living standards are rising.
Monopolization factors
Despite the legal prohibitions, the market naturally tends to monopolize. Many factors and objective reasons contribute to this.
The first reason is the desire of organizations to acquire excess profits, possible in the absence of competition. This is the most complex and common factor. It is due to the very nature of man - namely, the desire to get rich and get a large amount of material we alth.
The second condition for striving for monopolization is connected with the establishment of barriers and boundaries by the state authorities for the entry of individual organizations into a particular industry. These are procedures such as certification or licensing. It would seem, how can legal procedures for registering enterprises interfere with the conduct of state antimonopoly policy? Experts argue that the presence of barriers leads to the emergence of more monopolies. Not all enterprises acquire legal force, which is why the existing minimum strengthens its position. You can solve the problem byweakening the registration procedure.
The next condition for the growth of monopolization processes is a foreign economic policy of a protectionist nature, aimed at protecting domestic producers from foreign competition. Thus, foreign goods may be subject to large duties or their import into the country is limited.
Increasing tendencies towards the merger of organizations or the absorption of one enterprise by another constitute another factor of monopolization. Such actions have their own names - for example, a syndicate, a cartel, etc. The forms of monopolies will be discussed a little later.
Thus, legislators who determine state antitrust policy must take into account all of the above factors. Only the awareness of what exactly needs to be fought will help to form a high-quality economic course.
Types of monopolies
For a better understanding of how exactly the state antimonopoly policy should be implemented, it is necessary to give a general description of the main types of monopolies.
The first classification divides large enterprises that restrict competition into artificial and natural. Everything is simple here: if a monopoly formed by itself, without the intervention of representatives of the organization, then we are talking about the natural nature of its addition. Artificial formation, on the other hand, presupposes the presence of a human factor. In this case, a particular person initially had illegal plans to restrict competition.
ArtificialThere are far more created monopolies than natural ones. This is facilitated by a number of factors, which have already been described above.
There are other classifications according to which the following types of monopolies exist:
- State, or legal. They are, as a rule, legal, since the state can concentrate individual spheres of production in its hands. In Russia, this is the defense industry.
- Pure monopolies. Arise when there is only one manufacturer on the market.
- Temporary monopolies. May be associated, for example, with scientific and technological progress.
- Absolute monopolies. Determined by the absolute control of one firm over the sale of products and production.
An interesting subtype of monopoly is monopsony. This is a kind of limitation of individuals in purchasing power - in other words, the monopoly of the buyer. An obvious example of monopsony is the purchase of military equipment by the state.
There are three main forms of monopolies:
- Trust is an association of enterprises deprived of independence. The trust assumes the dominance of a large enterprise over its constituent instances.
- Syndicate - an association of enterprises that remain independent. Associated with the purchase of products and their subsequent sale.
- Cartel - the same syndicate, but associated with hiring labor and marketing products.
Despite the similarity of all the designated forms, each type of monopoly has its own characteristics and features. This should be taken into account when regulating antitrust policy.
Antitrust regulation
So, how is antitrust policy implemented? The state structure has a whole plan to carry out activities aimed at developing he althy competition and suppressing monopoly tendencies.
The first stage of regulation is to determine the type of monopoly. A special body must determine the shape of the illegal object and its features. If we are talking about the merger of enterprises, then the state applies the method of artificial separation. So, some cartel will receive a subpoena, where it will deal with the payment of fines, self-liquidation or reorganization, the search for the perpetrators, etc.
There is no Ministry for Antimonopoly Policy in Russia. Instead, it functions FAS - the Federal Antimonopoly Service. It is this body that is entrusted with most of the powers to eliminate and prevent processes aimed at restricting competition.
Antitrust regulation models
The fight against the artificial restriction of competition can unfold in two forms: American and European. The first type of struggle is much more rigid and strict. The fact is that within the framework of the American model, monopoly is prohibited in principle. Even a single occurrence of restriction of competition is not allowed. In other words, the market has complete freedom. Everything is a little different with the European model. Single monopolies are allowed here, but they are strictly supervised.
America's famous antitrustlegislation. It is based on the provisions of the Clayton and Sherman laws. These acts completely prohibit the association of enterprises into a trust, respectively, any secret agreements or actions that restrict competition in production are not allowed.
In most European countries, monopolies are fought by applying the provisions of the 1957 Treaty of Rome. Compliance with the legislation is monitored by the European Commission, which issues permits for the creation of temporary monopolies in certain industries. The Treaty of Rome applies to the countries of the European Union, as well as to South Africa, Australia and New Zealand. Russia has not ratified the document, but has established very similar rules in the economic sphere.
Price regulation
An important role in the conduct of antimonopoly policy in Russia is played by the price regulation procedure. It is understood as the formation and change by the state of prices for products manufactured by the enterprise. Price regulation is aimed at combating the monopoly high cost of goods.
The entire process under consideration is based on two important principles:
- break even;
- increase in production efficiency.
The first principle is implemented by setting prices at the level of average costs. As a result, the monopoly brings neither profit nor loss.
Principle of production efficiency involves setting the price of goods at the level of the marginal cost of the monopolist. This will allowensure maximum production.
Pricing is regulated by the state. Thus, the creation of monopoly prices - excessively high or excessively low - is not allowed. High prices are set to extract excess profits. Excessively low prices limit access to the industry of competing enterprises. There is also the concept of monopsony price. This is the establishment by the dominant consumer enterprise of the value that reduces the level of costs at the expense of supplier enterprises.
Pricing alone does not indicate an organization's desire to limit competition. However, it is the pricing procedure that is the most important direction of antimonopoly policy.
Supporting competition
Competition is the main enemy of monopolists. Limiting he althy market competition is the main goal of organizations wishing to establish only their own possessions in one area or another. The state must support competition. In antimonopoly policy, this is a priority area that determines the development of industrial capacities, the production of goods, price setting, etc.
State support for competition should be implemented in the following areas:
- creating and maintaining favorable conditions for the emergence and development of successful competition in the market;
- supporting competition through the formation of new laws;
- increasing the pace of scientific and technological progress, that is, reducing the development time and distribution of the latesttechnologies in production.
The last point is especially important. It is scientific progress that makes it possible to organize effective competition. Antimonopoly policy in the Russian Federation, according to many experts, is implemented rather poorly. The state power often does not pay any attention to large monopolists, and sometimes even supports them. That is why all hope remains for technical and scientific progress. Through these phenomena, competition will naturally develop.
Taxation
The last way to deal with the restriction of competition is the policy of taxation. It is also regulated by the authorities, namely the state tax inspections. In order to reduce the profits derived by dominant enterprises, the state establishes a number of additional taxes. According to the nature of the collection, they can be divided into two main forms:
- Lump tax. It does not depend on the volume of production and is only a part of the fixed monopoly costs. We are talking, for example, about the price of a license for the exclusive right to engage in a particular activity.
- Product tax. It is charged for each unit of production and is part of the variable monopoly costs.
Both types of tax reduce the profit received from production volumes. At the same time, they increase the amount of finance received by the state budget. All this has a socially useful orientation.
Economists argue that a lump-sum tax is more efficient and useful. The fact,that the commodity type of taxation changes the optimal prices and volume of output. As a result, the firm reduces the quantity of goods produced, and the price at this time rises. This phenomenon greatly exacerbates the economic damage to consumers.
Lump tax raises the level of average and fixed costs of monopolists. The value of marginal cost does not change, and therefore the company is kept from changing the price to the volume of production. The state, unfortunately, does not take into account consumer interests when imposing additional taxes on monopolies. This problem also needs to be addressed.
