# enlarged-monopoly

## Definition

An enlarged monopoly refers to market situations where competition is artificially restricted to a smaller number than might otherwise enter an employment, through exclusive privileges of corporations, statutes of apprenticeship, or other laws. These create effects similar to monopolies but to a lesser degree, keeping market prices above natural prices and maintaining wages and profits somewhat above their natural rates for extended periods.

## Source Chapter

Book 1, Chapter 7: "OF THE NATURAL AND MARKET PRICE OF COMMODITIES."

## Context

Smith identifies various forms of market restriction that create monopoly-like effects without being complete monopolies. He explains how these restrictions, while less severe than full monopolies, can still maintain prices and factor returns above competitive levels for long periods through artificial limitation of market entry.

## Economic Domain

Regulation

## Smith's Original Wording

"The exclusive privileges of corporations, statutes of apprenticeship, and all those laws which restrain in particular employments, the competition to a smaller number than might otherwise go into them, have the same tendency, though in a less degree. They are a sort of enlarged monopolies, and may frequently, for ages together, and in whole classes of employments, keep up the market price of particular commodities above the natural price, and maintain both the wages of the labour and the profits of the stock employed about them somewhat above their natural rate."

## Modern Interpretation

Enlarged monopolies represent partial market power created by regulatory barriers to entry. These concepts are fundamental to modern industrial organization theory and the analysis of regulatory capture and rent-seeking behavior.