Monopolies and Underdevelopment

Monopolies and Underdevelopment

From Colonial Past to Global Reality

New Horizons in Competition Law and Economics series

Calixto Salomão Filho

This ambitious analysis is centered on the evolution of economic structures in colonized economies, showing the effects of these structures on today’s global reality for all economies, whether they are considered ‘developed’ or ‘underdeveloped.’ The result is an illuminating study of historical restriction and exploitation and its impact on present day markets around the world.

Chapter 2: The economic view

Calixto Salomão Filho

Subjects: development studies, law and development, economics and finance, development economics, economic psychology, industrial organisation, law - academic, competition and antitrust law, law and development


It is in the history of economic ideas that one is able to identify the clearest and most linear evolution towards acceptance and even appreciation of economic power. Unlike philosophy, characterized by ups and downs, typical of the speculative nature of philosophical reasoning, economics experiences a much more linear development, which leads to a strong pragmatism. The apparent scientism that it involves from the classical liberals and that is exacerbated by the mathematical methodology introduced by marginalist microeconomics causes the evolution of economic ideas to be linear and even predictable. The starting point of modern economic study is undoubtedly the work of the classical liberals Adam Smith, Jeremy Bentham and John Stuart Mill. It is important to highlight not only the well-known defects but also the qualities of liberal thought. On one hand, the strongly liberal ideology underpinning this theory caused the authors to disregard completely any possible failure in the market. Although Smith and Mill make express reference to weaknesses and/or to differences in information from various market participants, they do not believe that these problems are able to minimally affect the model. There is, however, in classical economics, especially in Adam Smith, something positive that would be completely lost in the subsequent ‘developments’ of economic theory. There is no concern among the classics to define the results of the economic process. There is no attempt to formulate equilibrium models because, at the time, it lacked the instrument to do so.

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