A legal monopoly, statutory monopoly, or ''de jure'' monopoly is a

monopoly A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...

that is protected by law from competition. A statutory monopoly may take the form of a

government monopoly In economics, a government monopoly or public monopoly is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law. It is a monopoly ...

where the state owns the particular

means of production The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as an ...

government-granted monopoly economics, a government-granted monopoly (also called a "de jure monopoly" or "regulated monopoly") is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good ...

where a private interest is protected from competition such as being granted exclusive rights to offer a particular service in a specific region (e.g.

patented A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A p ...

inventions) while agreeing to have their policies and prices regulated.investorwords.com
definition This type of monopoly is usually contrasted with '' ''de facto'' monopoly'' which is a broad category for monopolies that are not created by government.

History

Jurisdictions have at various times imposed legal monopolies on various

commodities In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a comm ...

, including salt, iron and

tobacco Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...

. The English

Statute of Monopolies The Statute of Monopolies 162321 Jac 1 c 3 was an Act of the Parliament of England notable as the first statutory expression of English patent law. Patents evolved from letters patent, issued by the monarch to grant monopolies over particular ...

of 1623 was an early step in an English movement to convert

letters patent Letters patent ( la, litterae patentes) ( always in the plural) are a type of legal instrument in the form of a published written order issued by a monarch, president or other head of state, generally granting an office, right, monopoly, titl ...

from a method of rewarding

royal favourite Royal may refer to: People * Royal (name), a list of people with either the surname or given name * A member of a royal family Places United States * Royal, Arkansas, an unincorporated community * Royal, Illinois, a village * Royal, Iowa, a c ...

s at other than royal expense, to a method of encouraging inventors. The

British East India Company The East India Company (EIC) was an English, and later British, joint-stock company founded in 1600 and dissolved in 1874. It was formed to trade in the Indian Ocean region, initially with the East Indies (the Indian subcontinent and Southea ...

(1600),

Dutch East India Company The United East India Company ( nl, Verenigde Oostindische Compagnie, the VOC) was a chartered company established on the 20th March 1602 by the States General of the Netherlands amalgamating existing companies into the first joint-stock ...

(1602), and similar national trading companies were granted exclusive trade rights by their respective national governments (monarchs). Private interlopers were subject to criminal penalties, and the companies fought wars in the 17th century to delineate and defend their monopoly territories. Legal monopolies on

alcohol Alcohol most commonly refers to: * Alcohol (chemistry), an organic compound in which a hydroxyl group is bound to a carbon atom * Alcohol (drug), an intoxicant found in alcoholic drinks Alcohol may also refer to: Chemicals * Ethanol, one of sev ...

remain commonplace, both as a source of public revenue and as a means of control, and the monopolies on

opium Opium (or poppy tears, scientific name: ''Lachryma papaveris'') is dried latex obtained from the seed capsules of the opium poppy ''Papaver somniferum''. Approximately 12 percent of opium is made up of the analgesic alkaloid morphine, which i ...

and

cocaine Cocaine (from , from , ultimately from Quechuan languages, Quechua: ''kúka'') is a central nervous system (CNS) stimulant mainly recreational drug use, used recreationally for its euphoria, euphoric effects. It is primarily obtained from t ...

, formerly important for revenue, were converted or reinstituted during the twentieth century to curb the abuse of

controlled substances A controlled substance is generally a drug or chemical whose manufacture, possession and use is regulated by a government, such as illicitly used drugs or prescription medications that are designated by law. Some treaties, notably the Single ...

. For example, Mallinckrodt Incorporated is the only legal supplier of cocaine in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

. The regulation of

gambling Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three el ...

in many places includes an official monopoly national lottery or

state lottery In the United States, lotteries are run by 48 jurisdictions: 45 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Lotteries are subject to the laws of and operated independently by each jurisdiction, and there is no ...

. Where private operation is allowed, for example in

horse racing Horse racing is an equestrian performance sport, typically involving two or more horses ridden by jockeys (or sometimes driven without riders) over a set distance for competition. It is one of the most ancient of all sports, as its basic p ...

off-track betting Off-track betting (or OTB; in British English, off-course betting) is sanctioned gambling on horse racing outside a race track. U.S. history Before the 1970s, only the state of Nevada allowed off-track betting. Off-track betting in New York was ...

and

casino A casino is a facility for certain types of gambling. Casinos are often built near or combined with hotels, resorts, restaurants, retail shopping, cruise ships, and other tourist attractions. Some casinos are also known for hosting live entertai ...

s, the authorities may license only one operator. The early 19th century ''

Gibbons v. Ogden ''Gibbons v. Ogden'', 22 U.S. (9 Wheat.) 1 (1824), was a landmark decision in which the Supreme Court of the United States held that the power to regulate interstate commerce, which was granted to Congress by the Commerce Clause of the United Sta ...

'' case weakened the steamboat monopoly that New York had granted, producing an exception for interstate commerce. However the later

Slaughter-House Cases The ''Slaughter-House Cases'', 83 U.S. (16 Wall.) 36 (1873), was a landmark U.S. Supreme Court decision consolidating several cases that held that the Privileges or Immunities Clause of the Fourteenth Amendment to the U.S. Constitution only pr ...

established that a local law creating a legal monopoly did not violate the rights of other merchants in the United States. The

National Recovery Act The National Industrial Recovery Act of 1933 (NIRA) was a US labor law and consumer law passed by the 73rd US Congress to authorize the president to regulate industry for fair wages and prices that would stimulate economic recovery. It also e ...

to promote and legally enforce producer cartels was defeated in ''

Schechter Poultry Corp. v. United States ''A.L.A. Schechter Poultry Corp. v. United States'', 295 U.S. 495 (1935), was a decision by the Supreme Court of the United States that invalidated regulations of the poultry industry according to the nondelegation doctrine and as an invalid use ...

''. In the middle twentieth century many countries established a monopoly

broadcasting Broadcasting is the distribution (business), distribution of sound, audio or video content to a dispersed audience via any electronic medium (communication), mass communications medium, but typically one using the electromagnetic spectrum (radio ...

agency, such as

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...

History

See also

References