How to prevent monopoly enterprises from harming public interests

Monopoly enterprises monopolize industries, that is, they enjoy the policies given by the state, thus controlling social production, manipulating and monopolizing the market. At present, there are some monopoly industries in China, such as salt, tobacco, power supply and finance. These industries still have the flavor of planned economy. They are exclusive and ordinary people can't live without them. Product is your only choice. So it is also called overlord industry. The products of these industries are all girls who are related to the emperor and the country, and they don't worry about marrying. No matter in theoretical analysis or social reality, the monopoly of public enterprises has caused many disadvantages. Therefore, introducing competition mechanism into public utilities and breaking the monopoly of public utilities have become the content of reform in many countries. In the process of establishing and perfecting the socialist market economy, China's legislative and administrative departments have also taken measures to regulate the monopoly behavior of public enterprises. Combined with China's national conditions, the anti-monopoly regulation of domestic public enterprises should focus on the following aspects: price supervision, ensuring interconnection and prohibiting cross-subsidies. The traditional anti-monopoly law lists the monopoly of public enterprises as an exception, and strictly controls the operators only in terms of service fees and prices. However, with the development of contemporary anti-monopoly law, public enterprises are increasingly bound by anti-monopoly law. At present, China is formulating anti-monopoly law, in which the anti-monopoly regulation of public enterprises is an inevitable and important issue. Here, the author adopts the analysis method of law and economics in order to construct the legal system of anti-monopoly regulation of public enterprises in China. I. Economic Analysis on the Causes and Disadvantages of Monopoly of Public Enterprises; Public enterprises mainly include natural monopoly industries such as transportation, telecommunications, electric power, tap water and natural gas, and their products or services are closely related to people's daily life and indispensable. (A) Analysis of the reasons for the monopoly of public enterprises Some scholars have pointed out that the "natural monopoly" of the US telecommunications industry is not innate, and the Western Union Company and AT&T Company were originally formed. T)' s monopoly situation is formed in the competitive environment of the United States, accompanied by a series of technological inventions and innovations in the medium-term development of the telecommunications industry and long legal proceedings and negotiations on patent management rights. [1] "Right to enter" is the game rule of the early telecom industry. This "right of entry" is private, independent and inviolable. The change of property rights affects and changes the market structure, and finally forms a natural monopoly situation, not a state monopoly. Therefore, monopoly forces not only compete with competitors, but also compete fiercely with the country. With the formation of monopoly, the legal system to adjust and standardize the market competition order is constantly improving. As far as China is concerned, the monopoly of public enterprises has its unreasonable reasons. [2] Culturally, China has an economic tradition of "official camp" as a special economy. From the "salt and iron official camp" in the Han Dynasty to the "Westernization Movement" in the Qing Dynasty, all of them have the color of monopoly of official camp. In the planned economy era after 1949, public ownership of means of production was realized through state power, and many industries were monopolized by the state. This monopoly achieved through revolution rather than competition does not represent the inevitable logic of market economy. The national plan represents the national will and has certain legal effect. Under this institutional arrangement, there can be no anti-monopoly law, and it can only obey the will of the state. It can be seen that the theory of natural monopoly cannot be the defense reason for the monopoly of public enterprises in China. (B) the disadvantages of monopoly of public enterprises in China 1. The performance of the industry market is sluggish. Due to the lack of competition, the efficiency of industry resource allocation is directly negatively affected, the profit rate of industry or enterprise is low or unreasonable, and the price can not correctly reflect the relationship between market supply and demand. In order to maintain reproduction or ensure development, public enterprises often shift their burden to users and consumers by virtue of their monopoly position, and the social utility of the industry is greatly reduced. For example, the Ministry of Posts and Telecommunications-China Telecom will allocate the construction cost to users at one time. In the 1990s, the cost of telephone installation in many cities rose to 4000-5000 yuan, so the investment in expanding telephone capacity was largely transferred to consumers. Due to the low competitive pressure, such a high initial installation fee was charged, but the service quality of the telecommunications bureau did not change much. From the perspective of industrial organization and internal performance of enterprises, there is a common phenomenon of high consumption, low efficiency and inefficient operation of state-owned assets in natural monopoly industries in China. [3] 2. The market structure in the industry is unreasonable, and the operation of public enterprises deviates from the market rules. Public enterprises in China are directly controlled by the government. They are special enterprises with high integration of government and enterprise, and have dual legal status of combining market operation and industry management. Because they have administrative monopoly power within a certain range, they are actually government monopoly enterprises. American economist Stie Grize once pointed out that government enterprises don't have to care about bankruptcy and usually don't have to consider competition. As a bureaucrat who manages public enterprises, his biggest goal is to maximize institutions, not to optimize operational efficiency. Coupled with the incomplete and asymmetric information, it leads to the inefficiency of public enterprises. [4] Second, the efficiency analysis of the introduction of competition mechanism in public enterprises Since the18th century, economists have realized that some areas of the market economy should not be competitive, but should be monopolized from the perspective of social and economic benefits. In the industry where public enterprises are located, because of the high cost of laying pipelines or lines, it is economical to have only one pipeline or line from the supplier to the user. Public enterprises basically have no storage capacity for their own products, and can only produce them when there is consumer demand. Under the given market demand, one enterprise can save social resources than two or three enterprises. This phenomenon is called natural monopoly. The traditional natural monopoly theory holds that the reason for the formation of natural monopoly lies in the development of scale economy and technology. In addition, natural monopoly industries have large investment and long recovery time. Once the fixed cost is put into use, it will often "precipitate" in the industry, forming a large amount of precipitated capital, which is the condition for the stable existence of natural monopoly. [5] However, many scholars put forward the opposite view. They believe that the market competition mechanism can automatically solve two related efficiency problems: first, it can solve the problem of efficient industrial cost structure and minimize production costs; Second, it can solve the problem of effective price structure, and consumers buy products at a price equal to marginal cost or average cost. That is, market competition can promote production efficiency and social distribution efficiency. [6] China telecom industry after China Unicom entered is a typical example. Competition not only did not lead to higher production and operation costs, but also reduced the cost level, forcing China Telecom to cancel all kinds of inefficiencies. The positive impact of competition on cost reduction is greater than the sacrifice of some economies of scale. In addition, the welfare of consumers has been improved. It can be seen that the traditional natural monopoly theory has failed to stand the test of practice. In fact, the control policies aimed at realizing economies of scale and protecting consumers' interests have not achieved their goals. Some scholars have pointed out that the fundamental reason for this phenomenon is that this regulatory policy is based on a flawed natural monopoly theory. [7] This theory ignores the fact that monopoly will breed inefficiency in any enterprise. That is, in the absence of competition, monopoly enterprises cannot consciously pursue high efficiency, and as a result, there is a considerable deviation between actual efficiency and maximum possible efficiency. These new viewpoints provide a theoretical basis for the government to formulate deregulation policies and carry out anti-monopoly regulation on public enterprises. From 1980s to 1990s, western developed countries began to carry out fruitful reforms on public enterprises, with the theme of deregulation and breaking the monopoly of public enterprises. At home, with the deepening of reform, the theoretical circle began to pay attention to the monopoly of public enterprises, and the measures taken by the government to solve this problem have also achieved positive results. However, it should be pointed out that starting from the theory of effective market competition, the introduction of competition mechanism in the industry where public enterprises are located should not only fully consider the great significance of competition mechanism in optimizing resource allocation, but also fully consider the great influence of economies of scale on national economic development. The industry characteristics of public enterprises and the theory of scale economy tell us that the industry in which public enterprises are located should allow certain monopoly factors, and even if competition mechanism is introduced, its market structure should be monopolistic. Three. Economic analysis and suggestions on the possibility of anti-monopoly regulation of public enterprises (I) possibility analysis 1. Competitive Market Theory1981On February 29th, baumol, an American new welfare economist, first expounded the competitive market theory. The theory holds that as long as the government relaxes the entry control, the potential competitive threat of new enterprises entering the market will force the original monopoly enterprises in the industry to improve their efficiency. The assumptions are as follows: (1) Enterprises are completely free to enter and exit the market (industry), and potential entrants have no disadvantages in production technology, product quality and cost compared with existing enterprises; (2) Potential entrants can evaluate the profitability of entering the market according to the price level of existing enterprises; (3) potential entrants can adopt the strategy of "hit and run", [8] that is, potential entrants have the ability to enter and leave the market quickly. According to this theory, the situation of oligopoly enterprises or complete monopoly enterprises is no exception. There is no excess profit in a competitive market, because any excess profit will attract potential entrants and monopoly enterprises to share market share and profit at the same cost. If the real world completely conforms to the hypothesis of this theory, then the optimal allocation of social resources and the maximization of economic efficiency can be achieved by relying on the power of potential competition and real competition, that is to say, government regulation should be abolished. But in fact, it is entirely possible for the original enterprises in the industry to make price reduction and other reactions before the new enterprises establish their own business scale, and the withdrawal of enterprises from the market will inevitably produce precipitation costs. It is the inconsistency between the hypothetical conditions of competitive market theory and the actual conditions that makes government regulation necessary. Although the theory of competitive market is flawed, it has a great influence on the renewal of government regulation, and also demonstrates the economic possibility for the anti-monopoly regulation of monopoly enterprises (including public enterprises). 2. The non-monopoly economics of quasi-public goods divides the goods provided by the government into pure public goods and quasi-public goods. Different from ordinary products, the service objects of public enterprises cannot be freely selected or excluded, or the cost of such exclusion is too high. While the economic benefits of its products are transferred to the downstream industrial departments and consumers, it can also get compensation from service charges or product sales, so its products belong to quasi-public products. For public goods, although most countries provide them in the form of government monopoly, they are not monopolistic. Quasi-public goods have a process of constant equilibrium between government supply and private supply. [9] When the quasi-public goods supplied by public enterprises are of low quality and low efficiency due to bureaucratic ills, the demand for quasi-public goods supplied by private enterprises will show an upward trend; When the quasi-public products supplied by private enterprises are of low quality due to the insatiable profit impulse of private capital, it will stimulate the demand of public enterprises for quasi-public products. The source of capital is not an investment obstacle to the supply of quasi-public goods, and the value compensation of public enterprise products just corresponds to the profit requirements of private capital. Therefore, public enterprises do not exclude private capital. Most public enterprises in China are invested by state-owned capital, and anti-monopoly regulation will inevitably involve the access of private capital. Therefore, we should adopt an open policy towards private capital. (II) Legislative Suggestions Based on the above analysis, China's anti-monopoly legislation should apply the oligopoly market structure to the natural monopoly business of public enterprises. [10] The focus of supervision should be monopolistic behavior, which can include five aspects: price supervision, ensuring interconnection, prohibiting cross-subsidies, prohibiting forced transactions and discrimination. Price supervision is to prevent public enterprises from abusing users and consumers when providing products. There are three ways to identify the exploitation behavior of enterprises: one is spatial comparison, which is suitable for products with comparable prices; The second is time comparison, which is suitable for products with similar and comparable prices; The third is the comparison between cost and reasonable profit. This method first determines the cost of a product or service, and then compares it with the price to judge whether the profit obtained by the enterprise is reasonable. Interconnection is a necessary condition to ensure effective competition among enterprises in the field of network economy. An important feature of the network industry is the vertical structure, such as telecommunications. Long-distance calls, mobile phones and other value-added services can only be provided by accessing local phones, and local phones are an essential input factor for long-distance calls and other services. Therefore, it is necessary to stipulate the interconnection obligation between network enterprises. The purpose of prohibiting cross-subsidies is to achieve equal competition conditions among enterprises and prevent enterprises from crowding out competitors by lowering the prices of competitive projects and raising the prices of non-competitive projects. The anti-monopoly law can stipulate that public enterprises must separate natural monopoly business from non-natural monopoly business and form independent legal entities respectively; Or require financial separation between different businesses of public enterprises.