Monopsony Theory

Abstract

This papers attempts to show that the neoclassical analysis of monopsony is erroneous. We deal with this issue under two sub-headings: those compatible with mainstream economics, and those that are not. In the first category are: paucity, wrong target, temporariness, limited window, complexity, information and timing (length of run). In the second category are those stemming from an alternative economic perspective, Austrianism: objective expenses vs. subjective costs, reliance on illegitimate interpersonal comparisons of utility, failure of trade to occur, coerced income transfers, difficulties with perfect competition and geometrical/mathematical considerations.

Keywords

Monopsony, interpersonal comparisons of utility, market failure, minimum wage law, unemployment, anti-trust, regulation of business

How to Cite

Block W. & Barnett II W., (2009) “Monopsony Theory”, American Review of Political Economy 7(1). doi: https://doi.org/10.38024/arpe.107

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Authors

Walter Block (Loyola University, New Orleans)
William Barnett II (Loyola University, New Orleans)

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This article has been peer reviewed.

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