Does Capitalism Inevitably Produce Inequalities?

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55. adam smith was anti-monopoly and originally, competition *was* the "invisible hand".

once you have monopolies, you no longer have vigorous competition, and you no longer have the invisible hand working properly, and the monopolists can extract excess profits by depressing supply and keeping prices high. in smith's view, oversight and regulation leads to distortion when genuine competition exists, but he supported anti-monopoly laws and enforcement because there wasn't real competition without it.


once you have monopolies, this is no longer true capitalism in the economic sense, it is economic anarchy (whatever happens in the absence of regulation and oversight, whether or not there is genuine competition).

many people (especially politicians, particularly those on the right) continue to insist on describing economic anarchy as "capitalism", leading to much confusion. but to adam smith and most economists, it isn't really capitalism without functioning competition.