Aliens and Cat-Food Monopolies

In the movie District 9, the aliens (prawns) have developed a tremendous addiction to cat food. A Nigerian gangster lives in the prawns’ preserve and has a monopoly on the sale of cat food to the prawns. How can he maintain his monopoly and what barriers are there to entry by other sellers?

Simple: the prawns are not allowed to leave the preserve, so they can’t buy from sellers elsewhere in Johannesburg. Every seller must live near them. Since the Nigerian cat-food sellers are heavily armed, quite literally no competitors can enter the market (the preserve). Some barrier to entry, either natural (economies of scale) or artificial (as in this case, with restrictions imposed on both buyers and potential sellers), is required to enable the monopolist to keep price above average cost. As is so often the case in a monopolized market, the restrictions that generate monopoly power result at least partly from government action.


"As is so often the case in a monopolized market, the restrictions that generate monopoly power result at least partly from government action."

This statement is meaningless. All markets exist in part due to government action.


Uh, sometimes a movie is just a movie.... Anyone want to bet the monopoly was a simple plot device created by the writer with no thought of the economic theory behind it? It's a lot easier, fictionally, to control the interaction between a group and a monopoly than the interactions between a group and a market, hence the overused, underthought science fiction device of a corporate state holding a monopoly on an addictive drug or a vaccine or a food supply. On one point I agree: Only a government can create an effective monopoly, generally through some mistake or unintended consequence.

science minded

Dear jonathan;
What about "the market place of ideas"? As I recall it once said, "no one likes to be in a position of dominance." George Simmel

Harry Cheadle

@nosybear: The writer may not have thought much about economic theory directly, but perhaps he took the cat food example from real-life conditions in non-alien slums, where drug dealers can hang on to monopolies by similar methods employed by the cat food dealers. No reason to accuse the writer of laziness. (And the monopoly wasn't controlled by a corporate state, but by a gang.)


There is an opportunity in distribution - someone can make money by distributing cat food to the local gangster at a lower price point. So while a monopoly exists within the context of selling to the prawns, opportunity does exist elsewhere within the market.

Fred Weiss

Umm....yeah, "Jonathan", but the specific kind of "government action" referred to in the piece physically bars competition against the monopolist, including most obviously in this instance by the use of armed force. Now, in contrast, another kind of government action could prohibit the use of such armed force. So while it is true that some kind of gov't action will effect the market, the question is whether such action promotes and protects the freedom of trade or restrains it.

It appears that Mr. Hamermesh understands that for a true monopoly to be maintained, it will require restrictions imposed by gov't action, i.e. that the monopolist is given legal protection against competition.


Jonathan, really? You sincerely believe that without government, there would not be any of the supply or demand for economic goods that constitute a market?

Governments are a concoction of human reason. Markets are an inherent expression of the human desire for STUFF, and their existence is completely independent of that of government. Government can only serve to distort markets, and, except in the case of "proxy" goods like carbon credits (or perhaps fiat currency) created by government, the government does not ever "create" markets.


@jonathan: "All markets exist in part due to government action."

That statement could not be further from the truth. All that's required for a market to exists is people - some people can produce a specific good or service more easily than others, so it make sense for people to trade for it.

There would be markets for food, medicine, energy, entertainment, you name it, whether or not the government told us how it should be run.

The most efficient markets are the ones with the least intervention. Big businesses love government intervention since they are more able to navigate the "barriers to entry" than small businesses.


"And the monopoly wasn't controlled by a corporate state, but by a gang"

the corporate state IS a gang

Janet V

Another thought: The Nigerians in the film also likely acquire the cat food by illegal means, such as liberating truckloads of it elsewhere in the city (think old school American mafia crews and truckloads of cigarettes or TVs). Their cost to acquire the goods, therefore, is very low, another barrier to entry.

I was curious, however, at how the prawns got currency and what it was -- regular money or some sort of chit.


Of course, the only reason a criminal gang profits from the deal is because government outlawed the sale of cat food to the prawns.


«There would be markets for food, medicine, energy, entertainment, you name it, whether or not the government told us how it should be run.»

Libertarianism is a developmental disorder. Anyone without it knows that the government handles such things as currency, police, and a justice system.

Without those, all you've got for a "market" is bartering bits and pieces, hoping not to be robbed blind every time you go to sleep.


Sorry to ignore the main thread and pile onto Jonathan, but aren't black markets a form of market that exists DESPITE government? Also, is there a such thing as a guaranteed monopoly under black market conditions?


@12 niczar

seriously, you'll need to provide a little more in-depth analysis when making such a ridiculous assertion

especially provided that it IS THE STATE that robs everyone blind

why can a currency not be determined by a market (Rothbard has wonderful work on this) ... why can't private security and judicial systems exist (like Iceland ACTUALLY HAD for over 400 years)? ... just because you say they can't exist or work does not make it true


"... the restrictions that generate monopoly power result at least partly from government action."

More precisely, the restrictions result from *a lack of inhibitive* government action. One of the usual purposes of any government is the protection of its citizens from coercion by violence or threat of violence, either foreign or domestic. The plight of the aliens in District 9 was a result of the failure of local government to protect other vendors from the predations of the Libyans, and also of its failure to regard the aliens themselves as deserving such protection.

It seems to me that this argument could be generalized to all systems where a monopoly emerges. The government's primary task is to regulate the expression of power (social, political, economic, and so on) within its state. Any excessive concentration of power within the nation is a threat to the government's ability to perform this regulation. The formation of a monopoly indicates a failure of the government to anticipate and prevent this concentration of power.


Dario Nunez-Ameni

Not to be counter-contrarian, but I think that @johnathan means that most economies are under the "effects" of "some "government" action ,either directly through regulation and intervention, or indirectly, as the effects of such direct action will at some point, in some way, affect other markets. But, do they exist 'because' of government action? In their current form they do, I suppose. Also, quite meaningless or at the very least obvious.
On the other hand there's the clumsy last sentence in the article that barely disguises a preference for unregulated markets by citing a totalitarian fiction as illustration. Duh.
JV.: No regulation, or restrictions on trade = No black market. Which is fine, I guess, if you can tolerate a bit of antifreeze in your toothpaste.
Governments tend to be monopolies of the means of enforcing economic laws and marketplace regulations because they are also a monopoly on the means of violence, which must be maintained at all cost, whether at war or not ( see Eisenhower farewell speech.) So the government has a national security obligation to keep a stable marketplace. Therefore any government regulated/run/controlled market/economy is somewhat comparable to a totalitarian economy with total government control over the market. It seems a matter of degree whether you're trading in a totalitarian monopoly or a thoughtfully regulated market that keeps the flow of goods to where they are needed.


Harry Cheadle

@Janet V.: The aliens trade advanced weaponry (which the humans cannot use) for cat food.

The "economy" that exists in the movie is actually quite unimportant. The aliens trade one essentially useless commodity for another, and no one really benefits. What would you smart economists say about that?

David Smart

Cat food = Drugs

My three viewings of the movie led me to believe that cat food was a kind of addictive drug to the Prawns. Their craving was such that they purchased it from armed goons at considerable risk. They traded their homes for just one can. They gobbled it up madly at every opportunity. Definite addiction dynamics going on here I think. Much more than simply "they're extremely hungry all the time."

I think the drug economy of segregation-era shanty towns in South Africa is what we're really aiming at here.


A lot of these comments seem to be implying that markets are the only expression of people wanting stuff and others giving it to them. I mean, if you want to lump in bartering as a market, go ahead, but it seems like a lot of the benefits of markets don't apply to bartering.

To have an effective market, you need a system of currency so you have a baseline to compare goods and you can make change. And to have a system of currency adopted, you need a group that has a lot of wealth, a reason to share it, and enough trust that they will. Governments are the only entity that could initially establish a currency - banks can as well, but there's usually not much need for a bank until there's currency.

Going back to the District 9 example, let's not forget that in the movie it's the people of South Africa that have forced the prawns into their own section of Johannesburg, creating the conditions that drive both the cat food market and the plot. If the government removed the restriction, the market - and public order - would be ruined, as the humans would fight against the prawns, and the prawns would assault South African businesses and steal their precious tinned treats. It's hard to see how this is supposed to be more desirable.

This is a clear case of a market failure, unless you're a laissez-faire economist who likes to think such things do not exist. One can pin part of the problems on government action, but it's not the government cursing about the prawns to the film's audience. The consumer's willingness to tolerate monopolies because it's easier than competition is, essentially, the movie's main theme, and it's just as much to blame for the cat food monopoly as for the prawns' marginalisation in a South African slum by the monopolisers of Earth.

Also, the Nigerians aren't exactly competing fairly. Legitimate businesses only sometimes shut down competitors by shooting the owners.


Patrick C

I agree with Jonathan. For example, in many areas drugs are ostensibly illegal, but drug laws are loosely enforced. Prices are still much higher than they should be. Is the market failing because government criminalization increases risk? Or because government has failed to take action to bring the market under its legal aegis? Or because addictive drugs have relatively inelastic demand?

Is it the positive action, the negative action, or is there no action? Ultimately your attitude on government will depend more on perspective than fact, but what we're really talking about is *what* action the government should take, not whether it should take action.