*sigh*
I know this is not a technical journal, but surely the tag line "Monopolies just don't matter as much as many people seem to think they do." is a bit misleading?
The mathematics behind economics is complex, and hence I am constantly badgering for some maths to be included with all "subject air conditioning" (i.e. hand waving) articles.
A monopoly exists because of some artificial barrier that prevents the "independent actors" from seeking the best price. In the physical world we call this an "energy landscape" and the appropriate language that sits well with those that studied PPE is "peaks and troughs and slopes". To overcome the barrier a certain amount of energy (e.g. cash to be spent on diggers - both physical and metaphorical in this case) is need to overcome this barrier.
In the case of China and these minerals, the artificial barrier might well be the paperwork that makes it difficult to do business unless you are, y'know , Chinese.
But anytime you have a "free" market, a monopoly can be a transient state between the availability of an item and the ability of the market to supply this item. (think pressure, if you have a leaky market barrier, some might be dispersed e.g. pre-production Iphones).
Hence, the term monopoly is really a proxy to indicate the number of independent providers to the free market.
e.g if N is the number of providers , and N<2, then state = monopoly.
But this clearly is not sufficient, as it is totally possible to have N==0 (think time machine sellers), and therefore no monopoly. But in factual fact it is possible to set N==0 by artificial means, y'know, by passing laws and make something illegal. So you can see that different variables are needed to deal with black markets..
And that brings us back to potential surfaces and the maths missing from economics, and the complete lack of feedback that is accounted for.
It very much depends upon your *local* barriers how important a monopoly is. e.g. sitting in a house with DSL. Want cable? Sitting in a country that doesn't have sun? Think of the energy barrier of moving house...thinking in $$$? See, the maths is the same... and if you add in the time-delays you get very nice differential equations to solve, and this can really make things complicated.
In this highlighted example, the material being sought is far down the pipeline, hence not really a monopoly. Just "required to be cheap enough to support a market", and so really a nice example, but not "visceral" enough for my tastes!
If you had chosen diamonds to analyse for comparison, I would have been much more impressed...but perhaps that is your next article?
P.
Biting the hand that feeds IT
