On the Origins of the Concept of Natural Monopoly

Abstract

The purpose of this article is to begin writing the history of the concept of natural monopoly. In economics natural monopoly is described as a situation in which, for structural reasons, only one firm finds it profitable to produce in the market. The following features which go to make up the notion of natural monopoly are identified: 1. the expression itself; 2. the singling out of the concrete situations to which it is applied; 3. the inquiry into economies of scale; 4. the consideration of their compatibility with competition; 5. the drawing of the diagram; 6. the request for Government intervention. In this paper each of the above features is separately examined from a historical perspective, highlighting the originality of economic theories in that specific respect, as well as their historical influence.

Keywords: history of economics, natural monopoly, cost curves, competition

JEL Classification: B10, D42, H40, L90