Sunday, December 04, 2005

How safe is a monopoly

I am going to spin an argument about something most would agree on, using a bad sports analogy and a Pulitzer prize winning book.
The book I am talking about is Gun, Germs and Steel. One of the very interesting insights is as follows. At the beginning of the evolutionary process, the ancestors of modern man were very inefficient hunters with niether superior intelligence nor the tools to threaten the survival of most animal life they co-habitted with. Without getting too technical, early man started out in Africa moving over a period of hundreds of thousands of years into first Eurasia then Australia and finally onto North and South America. Coinciding with the arrival of modern man in Australia and North America , was the near extinction of large mammals very similar to the kind now found in Africa. A very convincing case can be made for the hunting down of these large mammals by early man. So how did large mammals in Africa and to some extent Eurasia survive, while those in Australia/North America did'nt make it?
Animals in Africa had a chance to evolve alongside clumsy, lacking in hunting skills early man. whereas the animals in Australia had to deal with a shrewd adversery they had never encounterd before. The monoploy they held on those continents(Aus, NA) actually meant that they were ill euipped to deal with a superior and smarter adversary when they emerged thousands of centuries into their evolution.
How does this apply to the monopolies we see in businesses today? Most monopolies are a result of prevailing market conditions, and when you do have a monopoly, its often hard to see anothe ralternative for all stakeolders, but when an alternative does emerge it takes everyone by surprise most of all the monopoly holder itself.
Now for the bad sports analogy. The blitz that the quater back does'nt see hurts the most and does most damage. So monopoly holders breathe easy at your own risk.

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