Eli Heckscher and natural monopoly: The nightmare that never came true

Abstract

In Eli F. Heckscher's conception of the world, what he called “distributary systems” (ledningssystem) played a dangerously crucial role. He used this term to denote the means of transport, communications and power transmission, that is, in substance those activities which are commonly termed natural monopolies. Until the 1920s he believed that these monopolies could be held in check by potential competition and technological change. During the 1930s and 1940s he feared that the state would seize control of the distributary systems and develop a power unparalleled in history. He was afraid that the state in fact would be able to strangle technological progress and so eliminate any change that might conceivably threaten its power. Heckscher's nightmare was one of total dictatorship and utter stagnation.