It’s not true that all markets naturally lead to a concentration of power. Whenever concentration of market power, even leading up to a monopoly, does happen, this is caused by the underlying cost structure of the industry, whereby a company experiences increasing returns to scale and relatively high fixed costs. This means it is most efficient for the first entrant in a market to become as big as possible, as fast as possible. An example of such a natural monopoly used to be the markets for utilities: when the distributing networks for water or energy weren’t built yet, the first company to expand would gain a natural monopoly.  Given that a natural monopoly is a consequence of the underlying cost structure of the industry, there is not much one can do to change it. Basically, one can choose between a private unregulated monopoly, private monopoly regulated by the state, and government monopoly (Capitalism and Freedom, 2002). Of these, the private monopoly is best. A government monopoly would not just be a monopoly, but would also have the force of law to back it – the result would be the most direct form of regulatory capture, where the business interest takes over the public interest of the government agency.