Friedman came to see competition as the natural check limiting monopoly power

Evidence

Friedman now argued that actions of monopoly were conspicuous and actions of competition were inconspicuous: “monopoly is highly ‘visible,’ and draws attention to itself whereas the workings of competition are devious and hidden” (1951, 15). Moreover, like Director, Friedman asserted that competitive forces inherently limited the power of monopoly. As a result, Friedman portrayed the market power of monopoly as relatively benign, stating that “the effective power of [industrial and labor monopoly] over prices and wages tends to be considerably exaggerated” (p. 16). Friedman later stated, “I have become increasingly impressed with how wide is the range of problems and industries for which it is appropriate to treat the economy as if it were competitive” (1962, 120). Moreover, unlike Simons and the ordoliberals, Friedman concluded that private monopoly should be preferred to public monopoly and public regulation of monopoly (p. 28). — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1117

Categorization

• XREF: Friedman’s competitive-presumption claim prefigures the ‘as-if competitive’ methodology in ‘The Methodology of Positive Economics’ and later Chicago price theory. — connects to: Friedman’s Capitalism and Freedom evaded engagement with opponents and defined away monopoly — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 794; Director held that market monopoly power does not spill across separate markets — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1111; Friedman reversed the classical liberal claim that monopoly suppresses competition — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1118 (+2 more)

Broader Connections

• Friedman reversed the classical liberal claim that monopoly suppresses competition #expands (0.85) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1118
• Monopolies express competition rather than contradict it #corroborates (0.80) — Clara E. Mattei, Escape from Capitalism, 138
• Monopoly is the outcome, not the antithesis, of competition. #corroborates (0.75) — Clara E. Mattei, Escape from Capitalism, 138