The recent attempts by telecom companies to charge sites to allow visitors to see them; to charge e-mail senders to delivery their e-mail and so on, which activists have managed to downplay by naming “net neutrality” is worth a brief discussion as an example of the tendency to monopoly.

There is no stronger economic tendency in human history, taken as a whole, than the desire of economic actors to gain the security of monopoly positions. Guilds, unions and professional associations are nothing more, or less, than an attempt to secure labor monopolies (yes, this applies to doctors, nurses, teachers, teamsters, engineers, and anyone else who wants the government to punish people who practice their trade without a license or some other form of certification, fee or license.)

Throughout history, going back at least as far as ancient Egypt, merchants, professionals and anyone else who could has tried to seize monopoly status. Perhaps they wanted to be the only one to be able to sell silk, or the only one to trade with a foreign nation, or their association to be the only people allowed to work as masons, or to create hats, or practically anything else you can name.

The modern era is fundamentally no different. Stirling has discussed the railroads of the late nineteenth and early to mid twentieth century, which since they controlled who could get goods to market, could take almost all of the profits from anyone who needed to ship those goods. The early oil industry, lead by Standard Oil, was exactly the same situation.

Today, as the Economist notes, private investors are eager to get into monopoly situations, by buying up shares of transportation infrastructure – whether toll roads, ports, or airports – such purchases are sure money.

The number one driver for economic decision making for most people is not to maximize profit. It is to maximize safety of whatever profit they can make. Pushing to a monopoly (or more commonly, an oligopoly) situation in any good or service with reasonable demand does tend to drive up profit, but it is far more important that it protects the revenue stream.

Nor should one think that monopolies or oligopolies occur simply through outright grants. Take, for example, opening a bank. At one time, pretty much anyone could do it. But today, the combination of regulations and deposit requirements is so large that a few people could never scrape together a few million and start a bank for their neighbourhood - despite the fact that if they were allowed to, such a business could well make money.

The creation of such barriers to entry means that actors already in the market can charge higher prices – for example, offering almost no interest on checking accounts, and then turning around and demanding 20% interest for credit cards. There’s an arbitrage opportunity for others, but because of the difficulty of getting into the market, no one takes it. And for those few who can make it in, it’s better to join in the scam. But if there were thousands of new entrants, the temptation to undercut would be inevitable.

Free markets are great things. But they rarely exist and the reason they rarely exist is that those who are already in a market have every incentive to make sure the market becomes less and less free over time, so that they can raise margins. This is as true of groups of workers as it is of businesses and it is a strong, strong economic drive which is constantly underestimated.

And that is what the Telcos want – monopoly profits from people who, if they want to have an internet life or business, have no choice to pay. And the rate they will set it at is just slightly less than the level which would bankrupt their main customers. Unfortunately that level will be enough to bankrupt many smaller businesses and individuals who use the web – just as the railroads drove so many farmers into bankruptcy that an old Canadian joke runs as follows:

A tree crashes into a farmers fence, letting his cows escape. Seeing this, the farmer raises his fist and screams “Goddamn the Canadian Pacific Railway”.

Let the Telcos put through their oligopoly package, and soon you’ll be cursing them daily.

Free markets are great things. But they only exist when the government not only allows them, but encourages them. And they cannot exist when the majority of Senators and Representatives are bought and paid for by private interests who understand that a few hundred thousand in donations (or a few million) has the highest ROI possible – usually thousands or tens of thousands returned for every dollar spent in legal bribery.