Economics

It is all grey. We were taught that monopoly (one seller and many buyers) is bad for the economy and consumers, while perfect competition (many buyers and many sellers) is good for the economy and consumers. Recently, as I was reviewing the literature on how inflation was controlled during the war years when there is shortage of every possible commodity. I hit upon a book by J.K. Galbrith, a noted economist, where in he has very convincingly proved that monopoly not only allows you to control the prices with least possible cost but also keeps the growth of black market under check. He further says that under perfect competition it is almost impossible to control the greed of the sellers and purchasing power of the buyers who are successful in cornering the goods. Interesting, isn’t it, that monopoly turns to be good for consumers.