Natural monopolists. Industries of natural monopolies in Russia

A monopoly in economics is an industry in which, for some reason, there is no competition. It may be limited by law through a legal act or a patent, or there may be no competition in a new industry in which only one manufacturer operates.

However, there is absolutely special kind: A natural monopoly is an industry that needs the maximum number of consumers and uses unique Natural resources. If an ordinary monopoly limits the creation of a free market, then a natural one is the most profitable option for the existence of this industry.

Types of monopolies: schematically

Speaking in the language of economic science, a natural monopoly is a state of the market when its maximum efficiency is possible only in the complete absence of competition. which are produced in these industries cannot be replaced by any analogues, and the demand for them is maximally inelastic.

Even if the price for the products of natural monopolies is significantly increased, demand will remain the same, and buyers will begin to save on purchasing goods from other groups. A natural monopoly in an industry is possible only if the costs of producing goods by one firm are lower than if two organizations were engaged in this business. If the number of producers increases, the volume of production for each of them will become less, and costs will only increase.

In Russia, as in other countries, today there are several industries in which a situation of natural monopoly has formed:

• Transportation of oil and petroleum products, as well as natural gas through main pipelines. The operation of such a transport network will be most efficient and profitable if only one company is involved in this.
• Rail transportation. An example of a natural monopoly in Russia is the Russian company railways"is the only enterprise engaged in rail transportation; it also owns the entire transport network throughout Russia.
• Electricity and heat transportation services. Similarly, in this industry, no organization can become a serious competitor to monopolists.
• Operation of transport terminals: airports, sea and river ports, etc.
• Urban water supply services, ensuring the operation of utility networks. Purpose of payment for public utilities is under constant state control, tariffs are formed taking into account a number of factors. At the same time, the end consumer has no alternative; he has to pay for water supply, sewerage, heat supply and other services at the prescribed tariffs, and he cannot switch to another supplier.
• . In Russia, the natural monopolist in the postal service and correspondence forwarding industry is the Federal State Unitary Enterprise Russian Post. Although there are several regional operators operating in the country, their share in the total number of services provided has been less than 1% for more than 10 years, and no changes are expected in the near future.

All of the listed industries are exclusive and are not subject to antitrust laws. This is due to the fact that they are designed to protect the industry from low-quality competition, and in all cases their activities are regulated and controlled by the state.

The main signs of monopoly in economics

Natural monopoly goods are irreplaceable

Any monopoly in the economy has a number of specific features that distinguish it from all types of competition and explain its special position in the market. A monopoly can be natural or artificial, but in any case it must meet several special criteria:

• The existence of only one company supplying goods or services to the market. This company can be formed through large investments of capital over a long period of time, such as the railway network in Russia. Naturally, none new organization will not be able to invest as much to become a stronger monopolist and quickly cover all costs.
• The product or service is so specific that there are no analogues for it. The consumer can only agree to the conditions set by the monopolist or even refuse the good he offers. A monopolist has the ability to set its own price.
• In a competitive environment, the price is formed by matching supply and demand, so it changes quickly. A monopolist company can dictate its terms at any time; in natural monopolies, the state plays a large role in pricing. The monopolist itself controls the entire volume of services or goods provided in a given industry. That is, he forms not only the price, but also the supply, adjusting their ratio at his discretion.

Reasons for the formation of artificial and natural monopoly

The concept of natural monopoly appeared in ancient times

This form of industry organization, such as a monopoly, has existed for a very long time; the term itself appeared in ancient times. The very first organizations arose as a result of the combined efforts of several manufacturers, who captured the entire market and could independently set prices at their own discretion.

Almost all civilized countries today have antimonopoly legislation that regulates the market situation and prevents one company from taking over an entire industry. However, it is necessary to distinguish artificial monopoly, which is the result of an agreement between manufacturers and an association of companies, and natural, arising for objective reasons.

Not only will it not hinder the development of the economy, but it is also more profitable and effective form existence. The situation of natural monopoly is formed for several reasons:

• One firm produces a product or service at a lower average cost due to increased production volumes. This makes it possible to reduce the price of the final product, and for the end consumer this situation turns out to be much more profitable. An example is the city subway system or railways: if two carriers operate in the same direction, the income of each of them will be half as low, and because of this, the fare will have to be doubled.
• The difficulty of entering the market for a new enterprise with a similar offer. For example, in order to introduce another enterprise involved in water supply to the city, it will be necessary to lay an additional water supply network. This is not only extremely costly, but also useless, since the profit received will not recoup the investment even in the distant future.
• Limited market demand. Some suppliers' products are so specific that one manufacturer is more than enough for it. If there are more of them, the total profit will remain the same. An example is production military equipment or nuclear icebreakers: The demand for such products is completely dependent on the state, and in this industry, more manufacturers simply will not survive.
• A natural monopoly is as stable as possible: if an artificial monopoly association can eventually break up into several competing firms, then the industry of a natural monopoly will remain unchanged for a very long time. A turning point in its work can only occur with the emergence of new technological solutions or a sharp change in market demand.

An example of how a natural monopoly works

Natural monopoly is protected by the state

Let's consider the operating principle of the Russian Railways company, one of the largest monopolistic organizations in Russia. Today it is the only seller that provides the opportunity to transport goods and passengers by rail.

Even if another company acquires its own locomotives, it will be forced to use the existing transport network and coordinate its every action with Russian Railways.

The organization itself includes numerous subsidiaries, making it completely independent. These are our own design institutes, repair plants, trade organizations and much more that must ensure the life of the giant company. Due to the huge scale of competition in this industry there is no and is not expected.

At the same time, the uniqueness of the services offered today remains controversial, since in addition to rail, you can use road, air and water transport. However, rail transportation is the most reliable and safest, in addition, it makes it possible to transport large consignments of goods, which means they also have no real alternative. Other companies are barred from entering this market due to the enormous costs of building their own transport network.

The monopoly position is protected by the state, which is the sole shareholder of the company and has complete control over its management.

The Russian Railways organization independently sets prices, and they depend little on fluctuations in demand. Based on all these signs, we can confidently say that the Russian Railways company is a natural monopolist in its field, and this moment This is the most profitable option for the consumer in this industry.

A natural monopoly is a market position that does not impede the development of the industry, but, on the contrary, makes it more profitable and efficient. The existence of such monopolies depends on a number of factors, and their emergence is due to natural objective reasons.

Natural monopolies: nationalization cannot be privatized - topic of the video:

NATURAL MONOPOLY

NATURAL MONOPOLY

(natural monopoly) A monopoly based on an overwhelming cost advantage for the firm present in the market. A natural monopoly may exist because it has some unique natural resource, such as a mine with the only known deposits of a particular mineral, or because of past capital investments that would have to be duplicated by a competitor, such as a national electrical system. A natural monopoly should be distinguished from a statutory monopoly, where a firm's market position is based on laws to eliminate possible competitors. If the advantage of a firm in the market arises only from its access to necessary technology If it is based on the inability of other firms to match it in know-how, then it is a natural monopoly, but it is not one if it is based only on the exclusive possession of patents.

Economy. Dictionary. - M.: "INFRA-M", Publishing House "Ves Mir". J. Black. General edition: Doctor of Economics Osadchaya I.M.. 2000 .

NATURAL MONOPOLY

an officially recognized inevitable monopoly on the production and sale of goods and services, in relation to which the monopoly is determined either by the natural rights of the monopolist, or by considerations of economic benefit for the entire state and population. Thus, a natural monopoly arises in those areas where copyright is in force, because the author is a monopolist by law. On the other hand, it is beneficial for the state to have unified pipelines, energy networks, and railways. A state monopoly also arises in those areas where its existence is due to considerations of public safety.

Raizberg B.A., Lozovsky L.Sh., Starodubtseva E.B.. Modern economic dictionary. - 2nd ed., rev. M.: INFRA-M. 479 pp.. 1999 .

Economic dictionary. 2000 .

See what "NATURAL MONOPOLY" is in other dictionaries:

A company's monopoly due to its unique position in the market. A natural monopoly occurs in a situation where one company is able to satisfy all market demand for certain goods or services with a lower average... ... Financial Dictionary

- (natural monopoly) A monopoly in which the minimum efficient output is greater than or equal to aggregate demand, as in electricity distribution. In general terms, monopolies can exist as a result of barriers to... ... Dictionary of business terms

natural monopoly- 1. The state of the commodity market in which satisfying demand in this market is effective in the absence of competition due to technological features of production (due to a significant reduction in production costs per unit of goods... Technical Translator's Guide

NATURAL MONOPOLY- an officially recognized inevitable monopoly on the production and sale of goods and services, in relation to which the monopoly is determined either by the natural rights of the monopolist, or by considerations of economic benefit for the entire state and population... Legal encyclopedia

A market condition in which satisfying demand is more effective in the absence of competition due to technological features of production (due to a decrease in production costs per unit of goods as production volume increases), and... ... Political science. Dictionary.

Natural monopoly- a state of a commodity market in which satisfying demand in this market is more effective in the absence of competition due to technological features of production (due to a significant reduction in production costs per unit of goods as ... ... Official terminology

Natural monopoly- 1. A situation in which the industry producing (selling) goods and services effectively satisfies demand in the absence of competition due to the technological features of production. Its goods (services) have... ... Economic-mathematical dictionary

Natural monopoly- (English natural monopoly) in the Russian Federation, a state of the commodity market in which satisfying demand in this market is more effective in the absence of competition due to the technological features of production (due to a significant reduction in production costs... Encyclopedia of Law

Monopoly (from the Greek μονο (mono) one and πωλέω (poleo) sell) a company (the situation in the market in which such a company operates), operating in the absence of significant competitors (producing goods (s) and/or providing services that do not have loved ones... Wikipedia

A state-recognized monopoly on the production and sale of goods and services. It arises where monopoly is naturally determined (for example, the scope of copyright law), beneficial to the state and the entire population (for example, pipeline and... ... encyclopedic Dictionary

A monopoly is the exclusive right to conduct any activity in a certain area of ​​the state, organization, or company. The term "monopoly" comes from Greek language(monos - one, only; poleo - seller). Monopoly literally means “one seller.” In this case, all trade in one product or service is in one hand. However, when analyzing this phenomenon, it is worth taking into account the ambiguity of the term “monopoly”, since in reality it is very difficult to find a situation where there would be a single producer of goods on the market that does not have substitute goods - substitutes. Therefore, when using the term “monopoly” there is always a certain amount of convention.

In the literature, mainly economics, there are many different points of view regarding monopoly. Representatives of the systemic (structural) approach define a monopoly as an exclusive (monopoly) position in which an economic entity is located in the commodity market. Exceptionality this provision lies in the fact that this entity concentrates the bulk of the production and marketing of a certain product or service. Ultimately, this allows him (the subject) to exercise actual control over consumers and other participants in market relations.

Proponents of the behavioral approach view monopoly as a special behavior of a dominant entity in the market to use its position in its own interests.

Representatives of the role (functional) approach emphasize Negative consequences monopolization of one or another sphere of economic activity. They believe that a monopoly leads to an unfair redistribution of income from consumers to the monopoly firm by charging very high prices. One of the main representatives of this approach was the economist A. Smith.

There is no definition of the concept “monopoly” in antimonopoly legislation. However, there are also approximate concepts: “dominant position”, “monopolistic activity”, “natural monopoly”.

By virtue of Art. 3 of the Federal Law of August 17, 1995 No. 147-FZ (as amended on December 29, 2006 No. 258-FZ) “On Natural Monopolies” a natural monopoly is characterized as a state of the commodity market. Since a natural monopoly is one of the types of monopoly, it means that a monopoly in general represents a state of the commodity market.

In principle, a monopoly can be considered as a large corporation occupying a leading position in any sector of the national economy. That is, a situation arises in the market when buyers are confronted by an entrepreneur - a monopolist who produces the bulk of products of a certain type. In this case, even a small enterprise can become a monopolist.

The lack of competitors that characterizes a monopoly can largely be explained in terms of barriers to entry into a particular industry. In the case of a monopoly, these barriers will be high enough to completely block all possible competition. Real barriers that will prevent a company from entering the industry include:

* effect of scale. This means that in conditions of large-scale production due to market monopolization, efficient production is achieved at low costs. The dominant company in this situation is able to slightly reduce the price of products for a certain time in order to eliminate competitors;

* exclusive rights. In a number of countries around the world, the government can give firms special rights, for example, granting the firm the status of the only seller. However, in exchange for privileges of this kind, the government may retain the right to partially regulate the activities of such monopolies;

* patents and licenses. The state must guarantee patent protection for new products and production technologies. Over a certain period of time, this can provide firms with their exclusive rights, as well as consolidate leading positions in the market;

* ownership of the most important types of raw materials. Some companies are monopolists due to absolute ownership of the sources of production resources that are necessary for the production of a monopoly product.

Monopolies exercise control over industries, markets and the economy as a whole based on high degree concentration of production and capital in order to establish monopoly prices and extract maximum profits. The dominant position in the economy is the basis of the impact that monopolies have on all spheres of life of a given state. In the field of economic relations, the capitalist growth of monopolies led to an increase in their dictatorship and domination. Perfect competition and “pure” absolute monopoly are theoretical abstractions that express two polar situations in the market, two logical limits. “...monopoly is the direct opposite of free competition...” (V.I. Lenin).

Due to the high level of concentration of economic resources, monopolies are able to create opportunities for accelerating scientific and technical progress. However, these opportunities will be realized only in those cases where such acceleration will contribute to the company in order to extract monopoly-high profits. Some economists, notably Joseph Schumpeter, have tried to argue that large enterprises with significant power are a positive development in a country's economy, since they are catalysts for technical change, since firms with monopoly power can spend part of their income on research in order to to protect or strengthen their monopoly power. By engaging in research, they will provide benefits not only to themselves, but also to society as a whole. Unfortunately, there is very little convincing evidence that monopolies play a particularly important role important role in accelerating technological progress. This is largely due to the fact that monopolies can delay the development of scientific and technological progress if it poses any threat to their profits.

Paying attention to monopolistic formations in industrial production, we can notice that these are individual large enterprises or associations of enterprises that produce a significant amount of products certain type, as a result of which they have the opportunity to influence the pricing process, achieving the greatest benefits for themselves. As a consequence, such enterprises receive higher (monopoly) profits. Therefore, we can say that the main feature of a monopoly formation is the occupation of a dominant position, which gives the company the opportunity, independently or together with other entrepreneurs, to limit competition in the market for a certain product. A monopoly position is desirable for every entrepreneur or enterprise, as it helps to avoid a number of problems and risks associated with competition. It allows a company to take a privileged position in the market, concentrating certain economic power in its hands, and also influence other market participants, actually dictating its terms to them.

In the literature, as a rule, the following three types of monopolies are distinguished:

1) a closed (legal) monopoly, which is protected from competition by means of legal restrictions (for example, a state monopoly);

2) a natural monopoly is a branch of the economy where the entire market will be controlled by one economic entity (for example, railway transportation);

3) open (temporary) monopoly, in which a given entity temporarily becomes the only supplier of a product, and its competitors may appear in the same market later.

Monopolies can be classified according to other criteria. For example, depending on the nature of origin, administrative, economic and natural monopolies can be distinguished.

Administrative monopoly arises in connection with the activities of government bodies. On the one hand, this is the granting of exclusive rights to firms to carry out a certain type of activity. On the other hand, these are organizational structures for state enterprises in a situation where they are united and subordinate to different ministries and associations. Here, enterprises of the same industry are usually grouped, acting on the market as one economic entity, therefore there is no competition between them.

Economic monopoly is the most common. Its appearance is due economic reasons, it develops on the basis of the laws of economic development. We are talking about entrepreneurs who managed to gain a monopoly position in the market. There are two paths leading to the emergence of an economic monopoly. The first is the successful development of the enterprise, constantly increasing its scale through the concentration of capital, while the second is based on the processes of centralization of capital.

Let's look at natural monopolies in more detail. As already mentioned, the status of natural monopolies is regulated by the Law on Monopolies. A natural monopoly operates in conditions under which the formation of a competitive environment in the market is impossible or economically ineffective at a given level of scientific and technical progress.

There is a list of areas of activity in which the exclusive regime of natural monopoly applies:

1) transportation of oil and petroleum products;

2) gas transportation; railway transportation;

3) services of transport terminals, ports, airports;

4) electrical and postal communication services;

5) electricity transmission services;

6) services for operational dispatch management in the electric power industry;

7) heat energy transfer services.

A natural monopoly can be characterized as a type of monopoly that occupies a privileged position in the market due to the technological features of production (for example, due to the exclusive possession of the resources necessary for production, extremely high cost or exceptional material and technical base). This is, as a rule, an extremely costly production with the sole possession of the necessary resources, exceptional technologies and productive capacities. Basically, natural monopolies have labor-intensive infrastructures, the re-creation of which by other enterprises is economically unjustified or technically impossible. This is an industry in which long-run average costs are minimized when only one firm serves the entire market. A natural monopoly may operate due to barriers to entry for competitors, government privileges, or limited information, and is characterized by large increasing returns to scale, a production costs much less compared to perfect competition or oligopoly. A natural monopoly is based on features of technology that reflect the natural laws of nature, and not on property rights or government licenses. Forced distribution of production at several enterprises will be ineffective, since it would lead to an increase in production costs.

There are many definitions of natural monopoly. We will focus on two to characterize this concept in more detail.

A natural monopoly is a sphere of production or a branch of the national economy, the nature of production in which provides such high economies of scale that the product (service) can be produced by one enterprise at lower costs than if many enterprises were involved in its production.

A natural monopoly is a market condition in which a certain kind of product (service) or series of them is produced by only one seller due to the fact that the presence of two or more sellers in a given market representing a similar product is impossible or economically (socially) unjustified for reasons objective (natural) nature. Based on the features of production technologies and customer service. The emergence of natural monopolies can be explained by a special effect associated with the scale of production - the effect of saving resources as a result of the consolidation of production. It cannot be denied that large-scale production has some advantage over small-scale production when comparing costs when production is homogeneous. Thanks to better technical equipment and greater power of a large enterprise, there is an increase in labor productivity, and therefore a decrease in costs per unit of production. And this accordingly means more efficient use of resources. Therefore, natural monopolies become a desirable phenomenon for society and the state, although the monopolistic nature still forces them to regulate their activities.

There are two types of natural monopolies:

a) Natural monopolies. The emergence of monopolies of this type occurs, as a rule, due to barriers to competition erected by nature itself. For example, a monopolist may be a company that discovered a deposit of unique minerals and accordingly bought the rights to the area on which this deposit is located. Since the law protects the rights of the owner, no one else will be able to use this deposit. However, this does not exclude regulatory intervention by the state in the activities of such an enterprise.

b) Technical and economic monopolies. This can be conventionally called monopolies, the emergence of which is dictated by either technical or economic reasons related to the manifestation of economies of scale. For example, it is extremely irrational to create two sewerage networks, gas or electricity supply in an apartment in one city. It is not always rational to try to lay cables from two competing telephone companies in the same city, because they would still have to constantly turn to each other’s services in a situation where a subscriber of one network would call a subscriber of another.

The largest monopolies in terms of size are usually those in the energy and transport sectors, where economies of scale particularly encourage firms to expand in order to reduce average production costs. In reality, this is manifested in the fact that the creation in such industries, instead of one largest monopolist company, of several smaller firms leads to an increase in production costs and, as a result, not to a decrease, but to an increase in prices. And society, of course, is not interested in this.

C. Fisher gives the following characteristics of a natural monopoly. If the production of any volume of output by one firm is cheaper than its production by two or more firms, then the industry is a natural monopoly. In almost all countries, a natural monopoly is classified as a public utility enterprise, that is, one without which the functioning of the infrastructure of the entire state is impossible.

The modern theory of natural monopoly has developed over the past few decades in the West. In principle, the theory of natural monopoly can be considered as component a more general theory of production organization and analysis of the structure of industries. Using foreign experience It is worth taking into account additional difficulties associated with transition processes in the Russian economy. We must also not forget about the special genesis of Russian monopolies, which developed not in a competitive environment, but were formed administratively in a centrally controlled system. Therefore, it is quite understandable that for the domestic economy the issue of natural monopolies as an element of the market until relatively recently was not particularly relevant. And it is not surprising that in Russian law About natural monopolies, as a defining feature of this phenomenon, a significant decrease in production costs per unit of goods is also indicated as production volume increases.

Following the theory, the state of the industry market can be classified as a natural monopoly only in a situation where the amount of total costs, which is calculated for the optimal use of resources, is minimal in a structure consisting of one single enterprise. Then the question arises before us: why is competition unacceptable in natural monopolies? It is obvious that it is very costly for society to have several firms that will supply household and industrial facilities within one region with electricity or water, since operations on types of products require significant fixed costs for generators, pumping and treatment equipment, water pipelines, etc. It turns out that even if such firms can afford to incur costs of this scale, they will still not be covered by income from production, because the presence of several suppliers of water or electricity divides the industry into spheres of influence of individual enterprises and thereby limits the share participation of each company . Under these conditions, an individual firm will not fully utilize its permanent equipment, as a result of which electricity and water tariffs will become very high. For greater clarity, we can imagine a situation where several firms operate in an industry, all of which are in an equal position, and between individual firms there is fierce competition both in the acquisition of means of production and in sales. As a result of competition between firms, the weaker ones will go bankrupt, and the stronger ones, in order to withstand further competition, will merge, forming a pure monopoly. As it develops and improves, a pure monopoly can quickly compensate for past losses by using its monopoly position in the market by charging very high prices for its goods and services. In general, a pure monopoly can exist and develop successfully without causing any harm to the industry. An example of such monopolies can be monopolies in the automotive industry or in the production of household goods. However, in an industry that is extremely necessary for the population of the region, a pure monopoly is not only ineffective, but also has negative effects. Therefore, in order to prevent the formation of a pure monopoly in industries such as water supply or electricity, the government usually grants the exclusive privilege of one firm to supply, for example, water or natural gas. For its part, the government determines the geographic scope of the monopolist's activities, regulates the quality of its services and controls the prices it can charge. Thus, a regulated or state-organized monopoly arises.

I. ECONOMIC THEORY

15. Monopoly. Natural monopoly. Price discrimination

Monopoly is a firm-industry that produces products that have no substitutes. Therefore, a monopolist firm dictates the price of its products.

Monopoly comes in the following forms:
1) closed – protected from competition legally: by copyright, patent;
2) open– does not have special protection from competition (companies entering the market for the first time with new products);
3) natural– exploiting unique natural resources (electricity networks, water supply companies, gas enterprises).

The phenomenon of “natural monopoly” occupies a special place. Natural monopolies include public utility enterprises and enterprises that exploit unique natural resources (electric and gas enterprises, water supply companies, communication lines, transport companies). As a rule, such “natural monopolies” are owned or controlled by the state. The existence of natural monopolies is explained by a special effect associated with the scale of production - the effect of saving resources as a result of the consolidation of production. Due to better technical equipment and greater power of a large enterprise, labor productivity increases, and hence costs per unit of production decrease.

This classification is very conditional: some monopolistic firms belong to several types at once.

A monopoly that sells products to all buyers at the same price is called simple.

Monopolist conducting price discrimination, sells its products to different consumers at different prices. Price discrimination is carried out:
– by purchase volume (wholesale and retail);
– buyer (by income, age). For example, selling air tickets to businessmen and tourists. For the latter, a lower price is assigned, because when going on a tourist trip, they book tickets in advance and can choose a cheaper mode of transport (demand is elastic). Businessmen have a shorter order time (usually at the last minute), so there is practically no alternative (demand is inelastic);
– different prices in the domestic and foreign markets.

By conducting conditional discrimination, the monopolist maximizes profits by capturing a larger share of the market.

Since there is only one monopolist operating in the market, the demand curves for the firm and the industry coincide (Fig. 15.1). A monopolist chooses a combination of price and volume, in contrast to a competitive firm, which chooses only the volume that will maximize profits.

A monopolist maximizes profits by producing a volume of output that marginal revenue equal to marginal cost (Fig. 15.1)

Unlike a perfectly competitive market, the price of the monopolist exceeds MC

Thus P m and Q m are the profit-maximizing price and volume. If Q m were produced under perfect competition, it would be sold at P k (under conditions competitive market P=MR=MC). Since P m > P k , and P m > MR=MC, therefore, P m P k is the value of monopoly power (L). The source of monopoly power is the low price elasticity of demand

Rice. 15.1. Profit maximization by a monopoly firm

That is, the more inelastic the demand for a monopolist's products, the greater his monopoly power, the greater his profit. Since the price of the monopolist is P m >P z (cost Q M), the amount of profit is characterized by the rectangle P m mzP z.

Natural monopolies play a significant role in the economy of the Russian Federation and many other countries of the world. These enterprises are most often represented by large-scale businesses that are leaders in their segment. They have the opportunity to develop large markets, including foreign ones, and become carriers of unique technologies. What are the specifics of the formation of natural monopolies? What role can they play in the state's economy?

What is meant by natural monopoly?

A natural monopoly is a company that has a production model that, for some reason, is significantly more efficient than that of other market players. For example, this could be a company that has access to a cheap source of raw materials or electricity. It will have low costs associated with their purchase, and as a result, it will charge more low prices or work with greater profit and develop more dynamically.

Natural monopolies include enterprises that have the ability to monetize a resource that competing companies do not have. This is real, for example, when a company owns a toll highway. In this case, if other transport routes between the objects that it connects are absent or are not of such quality, the enterprise will be able to make a profit on a monopoly basis by collecting tolls.

Classification

A natural monopoly is an enterprise that can represent one or more industries. Therefore one of key criteria classification of businesses of the corresponding type - belonging to a particular sector of the economy. In the national economy of the Russian Federation, monopolies most often operate in the following industries: transport, fuel and energy complex, communications, utilities, nuclear industry, and the provision of postal services.

Another criterion for classifying the companies in question is who owns the subjects of natural monopolies. They can be state, municipal structures, individuals and corporations, foreign investors. The next criterion for classifying natural monopolies is their organizational and legal form. Most often, a monopoly is represented by a public joint stock company, but their operation will also be possible, for example, in the form of state corporations or unitary enterprises.

Reasons for the emergence of natural monopolies

What is the reason for the emergence of natural monopolies in the national economy? The reasons for this can be very different. One of the key factors under the influence of which the sphere of natural monopolies was formed in Russia was the mechanism of transformation of Soviet enterprises. Initially, they were adapted to the planned economy and, due to the lack of competition, occupied leading positions in one segment or another. On their basis, companies were formed that operate according to market principles in conditions modern economy RF.

It can be noted that Soviet enterprises, which operated monopolistically in the national economy, generally retained their positions in a free market. In most cases, the state remained their owner, but private individuals were also involved in capital investments.

Another reason for the emergence of natural monopolies is also relevant for Russia - the high investment threshold for entry into a particular industry. In order to start a business, for example, in the transport sector, huge capital is needed. Their owner will be interested in recouping his investment and establishing a company that can operate in conditions of minimal competition. Therefore, the investor acquires, by spending a large amount of capital, the bulk of those resources through which the company is going to make a profit in the future. For example, it is building a toll highway, and designing it in such a way that any alternative is likely to be less effective due to its greater length or smaller width. Competition between natural monopolies is an extremely rare phenomenon, largely due to the fact that the corresponding type of enterprise is deliberately established in those areas where a divergence of business interests is unlikely to be observed.

Another mechanism for the formation of natural monopolies is the presence of administrative barriers to the registration and entry of new enterprises into the market. They can be expressed excessively high requirements on certification, licenses and other permits, in the need for projects to comply with a very large number of GOSTs, standards and norms. As a result, it is easier for an investor to choose a business in an area that, from the point of view of bureaucratic barriers, is easier to enter. In turn, in the segment in which the investor refuses to participate, those entrepreneurs who, for one reason or another, can bypass or easily overcome administrative barriers begin to operate.

What natural monopolies are there in the Russian Federation?

The activities of natural monopolies occupy a significant share in the Russian economy. Enterprises of the corresponding type in the Russian Federation usually include Inter RAO, Gazprom, Russian Railways, Rosatom, and Russian Post.

All of them have the characteristics that characterize a typical natural monopoly. Examples of enterprises of the corresponding type can be found in various segments of the Russian economy. In each of them there is a potential manifestation of the factors that we mentioned above.

The state regulates natural monopolies, aimed at stimulating their implementation of positive market role. In addition, government initiatives may be related to the desire to increase economic efficiency companies of the corresponding type. Later in the article we will look at this aspect in more detail.

Registers of monopolies

It may be noted that in Russia the competent authorities keep records of enterprises that can be classified as natural monopolies. As a rule, this is done, in particular, by the Federal Tariff Service. The institution maintains its own register of natural monopolies. It represents companies from various segments.

The register of natural monopolies, formed by the FTS, includes enterprises in such industries as water supply in the public utilities sector, transportation of natural gas through pipelines, railway, air, sea transport, telecommunications, nuclear power, oil transportation. There are other authorities that carry out accounting of enterprises of this type. Thus, the register of natural monopoly entities is maintained by the Federal Antimonopoly Service.

Government contracts

It can be noted that in the national economy of the Russian Federation there may be firms that actually have signs of natural monopolies, but are not included in the corresponding register. In this case, due to the peculiarities of the provisions of Federal Law No. 44 of April 5, 2013, the purchase of services from the relevant company by state and municipal authorities may be complicated. The fact is that in cases where the supplier of a particular service is the only one on the market, government agencies have the right to enter into contracts with it only if it is included in the register of natural monopolies. In this sense, it is in the interests of the enterprise to get on the appropriate list as quickly as possible in order to be able to conclude contracts with budgetary structures.

The role of natural monopolies in the market

As a rule, the companies in question are very large businesses. Consequently, a natural monopoly is, first of all, the largest employer and taxpayer. Therefore, the state is interested in the efficiency of firms of the corresponding type, since their activities can be a factor in filling in cash budget, as well as ensuring employment of the population - the most important social task. This determines the fact that the regulation of natural monopolies by the state is carried out in such a way that the current market positions of enterprises of the corresponding type are maintained, and job cuts and a drop in revenue do not occur. Accordingly, social stability is ensured in those regions in which enterprises of this type operate.

Sometimes the services of natural monopolies are so in demand that firms of the corresponding type have no problems with revenue and profitability. In this case, government intervention in the activities of enterprises can be minimized. The main thing is that the company fulfills its obligations to the country's budget in a timely manner. Speaking about the role of the state in the work of natural monopolies, it will be useful to consider in more detail the aspect of regulating the activities of enterprises of the type in question.

Regulation of monopolies

The activities of natural monopolies can be regulated through the following main methods: publication by the state of regulatory sources - industry-specific, or having the status of federal regulations, which directly determine priorities in the management of enterprises of the corresponding type. Or approval of other regulations affecting pricing in a particular segment. The first regulatory mechanism applies to enterprises owned by the state. The second one begins to “work” in cases where the company is owned primarily by private individuals or foreign companies.

Significant aspect government regulation natural monopolies - law enforcement practice. It is important not only the content of regulations issued by authorities, but also the implementation of their provisions in market conditions. The practical need for government intervention in the sphere of natural monopolies may be due to various reasons.

For example, the work of enterprises of the corresponding type may cease to satisfy the objective criteria of competitiveness when the products they produce begin to be inferior in quality to foreign ones, as a result of which it becomes increasingly difficult to sell them abroad. Consequently, the state’s foreign exchange earnings are reduced and budget revenues are reduced. The state may be interested in promptly stimulating the necessary modernization of the production of its monopolies or those owned by private individuals in order to increase the competitiveness of their products.

Help for monopolies from the state

The activity of the competent authorities in terms of regulating the activities of monopolies may be associated with the need to protect the national market from the development, in turn, of foreign monopolies. Businesses of this type in other countries, as well as in Russia, may have greater financial opportunities, have access to unique resources that allow them to ensure a presence on large quantities national markets.

In some cases, the state directly assists in solving possible difficulties in the functioning of the business model of natural monopolies. This can be expressed, for example, in providing companies with the appropriate type of loans as a matter of priority and on preferential terms with a high probability of subsequent write-off of part of them. State assistance to the companies in question can be expressed in support of their activities abroad, since natural monopolies often work with international markets and their sustainability largely depends on the level of demand in foreign countries.

Enterprises of this type can have access to unique technologies and even develop them, having sufficient capital available. Therefore, in a number of cases, the state may be interested not only in the financial stability of firms of the corresponding type, but also in ensuring that a particular natural monopoly continues to be the only or one of the few entities possessing rare technology. This circumstance can have a positive impact on the competitiveness of the country’s economy and the situation in other industries in which the relevant technology can be used.

Let us note that for the state it may be significantly more preferable for the leadership of companies registered in it rather than foreign ones in one segment or another. This is due, first of all, to the fact that revenue from the business of a company that has a residence permit in a particular country will most likely remain in that country. This, in turn, contributes to the overall capitalization of the economy. Foreign companies often strive to transfer revenue outside the state as quickly as possible, although even then they can transfer significant amounts of tax payments to the budget of the country in which they operate.

Summary

So, natural monopolies in Russia are a significant part of the national economy. This is largely due to the fact that largest enterprises of the corresponding type were founded in the USSR in the absence of market competition, initially had a leading position in the market and access to those resources that were inaccessible to potential competitors. Russian Railways, Russian Post, Gazprom - each of these corporations founded in the USSR can be considered a natural monopoly. There are, of course, examples of firms of this type in many other industries. Natural monopolies are business entities that are the largest taxpayers and employers. Therefore, the state is interested in the stability of their work and, to the extent possible, contributes to this. At the same time, in a number of cases, authorities may interfere in the activities of natural monopolies due to the need to modernize a particular market segment.

The enterprises in question, on the one hand, are a powerful pillar of the economy, since they accumulate significant amounts of capital and have the ability to invest in various innovative production and become competitive on the international stage. And this helps to increase the investment attractiveness of the country’s national economy as a whole. On the other hand, the lack of competition in those market segments in which natural monopolies operate can lead to the formation of conservative priorities among managers of the relevant businesses, and as a consequence, to the opposite result when the competitiveness of products decreases. Therefore, it is important for the country’s authorities to monitor the processes taking place in the sphere of natural monopolies and promote their effective development, maintaining a balance between the interests of the state and private investors.