Monopoly is properly definable as the sole or exclusive right of selling or trading enjoyed by an individual or group of individuals. In its strict sense monopoly belongs to an economic era which has passed away. During mediæval times and the period that followed, exclusive rights prevailed in almost all departments. There were manorial rights which circumscribed individual action. The city and the guild had their spheres of production and of trade more or less clearly defined, and more or less thoroughly recognised in practice. The central governments which arose on the ruins of the mediæval system continued to recognise such exclusive rights, sometimes conferring on favoured individuals the sole privilege of selling the most necessary articles of life, in other cases granting to great companies the monopoly of trade over immense regions of the world. It is with these instances that the name monopoly is most strictly associated in history. The last parliament of Elizabeth, held in 1601, pronounced an emphatic condemnation of the monopolies granted by that queen, and even she had to yield to the storm. Salt and coal were among the articles whose sale was thus subject to monopoly. One of the members made a sensation by asking: 'Is not bread among the number?' Curiously enough, the previous year saw the foundation by royal charter of the greatest of the companies which were based on the exclusive right of trade in an immense foreign market, the East India Company. The opposition to monopolies at home continued under the Stuarts, and their abolition may be regarded as one of the important results of the great parliamentary struggle of that time.
The spread of freedom has tended to the abolition of such monopolies, whether vested in individuals, in trade corporations, or in great companies engaged in foreign commerce. But, while the monopoly of law has so far passed away, new tendencies towards a monopoly of fact have been setting in. Under the prevalent system it is still the aim of the competitor to secure as far as possible the exclusive sale of the commodity in which he deals, either in the world-market or over a given portion of it; and when the single competitor is not strong enough to accomplish this, he seeks to attain his object by combination with a group of those engaged in the same business. The modern trust syndicate or union is the outcome of such efforts; and the great danger attendant on such gigantic combinations is the establishment of a monopoly injurious to society. The trust considered in its social and economic aspects offers a wide problem for discussion; there can be no doubt that it establishes or seeks to establish a monopoly of fact. As regards the United States it may be maintained that such a monopoly is favoured by Protection; but in view of the fact that the same tendency is observable in England, where free competition with all the world exists, it should be considered whether such combinations are not a 'natural' outcome of the prevailing economic system. We have here merely to point out that in all such combinations, whether operating over the whole world-market or over a portion of it, the tendency towards a monopoly of fact is involved. In conclusion, reference should be made to monopolies, as in tobacco, retained by certain governments, but purely for revenue purposes. It was part of the later fiscal policy of Bismarck to establish such a state monopoly in spirits. See FARMERS-GENERAL.