Government Monopoly On Grounds

In the reading Role of Government in a Free Society, Milton Friedman argues that natural monopolies are a threat to strictly voluntary exchange. One of the possible, although not preferred by Friedman, solutions is a public monopoly: the government itself takes over the private firm and manages its business activities. 

In our class discussion about examples of public monopolies, I was reminded of a global sustainability class where I learned that the city of Charlottesville owns the gas utility that services the area. Charlottesville Gas is a municipality-owned natural gas utility and a prime example of a public monopoly. The high entry costs of laying down additional natural gas pipes to both new and existing infrastructure constitute some of the barriers that discouraged other competing firms from entering the market and thus created the conditions of a natural monopoly that the city decided was best addressed through government ownership. The city controls manages pipe construction and gas prices while residents pay their gas bill directly to the city. Fun fact: if you are constructing a new building in Charlottesville, the city will build natural gas piping that connects to the new building for FREE.