eflect that choice and relate those "wishes" to the producers. Consequently, consumers are at all times in complete control of (fully sovereign over) their own property at any given price-output combination,
It appears completely arbitrary to argue that only "low" prices, or "lower" prices induced by "supply increases," or only the "elastic" portions of a consumer's demand function are compatible with consumer sovereignty. Why are not consumers fully "sovereign" throughout the entire price-output range of their own demand function? After all it is they who determine, in certain instances, that they will trade greater volumes of dollars for fewer units of some good. Indeed, to prevent them from engaging in such exchanges would more accurately infringe upon their "sovereignty." If and when consumers become dissatisfied with such combinations, they are perfectly free to change the "elasticity" of their own demand to combinations that they do prefer.
If the above analysis is correct, it follows that resource owners or producers that voluntarily "restrict" their supplies to obtain higher prices (not "force" them up as Professor Kirzner asserts)39 have committed no socially harmful act. Restricted supplies and higher prices relative to what? All suppliers in free markets restrict their supplies in the sense that they only supply as much of a good or resource as they determine will maximize their monetary or psychic income. But, importantly, this is precisely what the "monopolist" does. If his action is "harmful," then so is the economic activity of all other suppliers in the market.
Alternatively, it cannot be argued that what distinguishes "monopoly" supply from "competitive" supply is the consequently higher prices. In the first place we have already argued that the new price-output combination is perfectly compatible with expressed consumer demand and, therefore, with consumer sovereignty. Secondly, prices are always "high" relative to lower prices that could exist, but do not. Indeed, any price at all is "high," "frustrates" consumers, and reduces their ultimate utility from consumption. But surely the ability to charge a lower price than the prevailing market price, or no price at all, can hardly be a correct criterion for judging whether a supply is competitive or monopolistic. Indeed, since producers are also sovereign under free-market conditions, we must conclude that any supply is competitive and any price is "compatible" with consumer sovereignty and consumer satisfaction.
ROTHBARD'S MONOPOLY THEORY RECONSIDERED
Rothbard it will be recalled had defined monopoly as "a grant of special privilege from the State reserving a certain area of production to one particular individual or group." This definition of monopoly would appear to be immune from the sort of criticism employed above against both the neoclassical and Mises-Kirzner theories of monopoly. In the first place, we can be confident that competition is "lessened" by this sort of monopoly, and that resources are non-optimally allocated so far as consumers are concerned, since governmental monopoly restricts by law both competitive entry and, consequently, free consumer choice. Legal barriers to entry restrict entry by definition. Areas of production that are truly "naturally" monopolistic would hardly require governmental entry restrictions. Consequently, consumer choke must be distorted, and the subsequent resource allocations must be "inefficient," since consumers are prevented by law from making choices that differ from those already made for them by the political authority. Hence, we conclude that governmental monopoly always restricts competition, always violates consumer (and producer) sovereignty, and always "injures" consumer welfare.
It would be tempting to argue that these "restrictions" and "injuries" are, perhaps, minor in the case of "minor" legal impediments to either production or exchange. Yet, there is no satisfactory way to cardinally measure either "competition" or consumer "utility." Since utility is a completely subjective notion, and since 