Thomas Di Lorenzo explores the history of the concept of ‘natural’ monopolies, and its use to justify state interventionism in the economy.
It is a myth that natural monopoly theory was developed first by
economists, and then used by legislators to “justify” franchise monop-
olies. The truth is that the monopolies were created decades before the
theory was formalized by intervention-minded economists, who then
used the theory as an ex post rationale for government intervention.