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58. JOAN ROBINSON ECONOMIC GROWTH MODEL
Author "The Economics of Imperfect Competition" by Joan Violet Robinson (1903-1983) graduated from the University of Cambridge, becoming one of the prominent representatives and continuers of the teachings of the school A. Marshall. She is one of those authors in economic science to whom the work written at the very beginning of her creative career brought world fame.
The main idea of the book consists in identifying the market aspects of the functioning of monopolies, competition in the conditions of the existence of which and between which, in connection with the imbalance in the economy, is, in her opinion, imperfect.
First of all, as E. Chamberlin, J. Robinson puts in front of original problem - find out the mechanism for setting prices in a situation where the manufacturer acts as a monopoly owner of his own products, i.e. why the price has exactly this value and why the buyer agrees to buy the product at the price set by the seller, which brings him a monopoly profit.
But the further reasoning of the author in many respects diverges from the logical constructions E. Chamberlin. In particular, if the latter linked monopolistic competition with one of the characteristics of the natural state of the market in equilibrium, then J. Robinson, talking about imperfect competition, saw in it, first of all, a violation and loss of the normal equilibrium state of a competitive economic system.
In the content "Economic theory of imperfect competition" the essence of monopoly is viewed negatively as a factor that destabilizes the socio-economic relations of the market environment.
Therefore, in this work we can single out the following provisions:
1) by conviction J. Robinson, in conditions of perfect competition, entrepreneurs are less interested in monopolizing production than in conditions of an imperfect market, in which individual firms cannot reach optimal sizes, operate inefficiently, and therefore the monopolist has the opportunity not only to increase prices for its products, limiting output, but also to reduce production costs by improving the organization of production in the industry;
2) as he thinks J. RobinsonIn addition to the fact that a monopoly requires a noticeable separation of products from “substitute goods” or, in other words, differentiation, an additional condition is necessary, according to which the monopolist firm must be characterized by a size exceeding the optimal one;
3) in a monopolized market with its imperfect competition, a situation is possible that requires finding out what the quantity of purchased products will be if we consider a market consisting not of an infinite number of buyers competing with each other, but of a single association of buyers.
This situation of concentration of demand, when there are a lot of small sellers and a single buyer, she called monopsony, i.e., a monopoly of buyers.
Author: Tatarnikov E.A.
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