Do any economists make any significant arguments against breaking up monopolies? If so, what are they?

Good economists are able to make economic arguments on both sides of most issues. The traditional view on monopoly power is that it is a market failure because of the price and output difference with competitive markets. Economists will often measure the loss in efficiency and label it the deadweight loss. Because of this argument, antitrust law is often used to break up monopolies that are too powerful.

On the other hand, there view that monopolies should not be broken up. The argument holds that when the price of a product increases due to monopoly, other firms will see that as a signal that high profits can be earned. If other firms see a firm holding a monopoly as earning high profits, they might try to produce that product. If these firms are successful the original monopoly loses its power as the market becomes more competitive. The second argument made against breaking up monopolies is that firms might see their ability to gain a monopoly as an incentive to create new goods and services. This view is even supported by governments who offer patent and copyright protection. The governments are creating short-run monopolies for these firms in hopes that producers will want to create more goods and services for the economy. In many countries, these intellectual property monopolies end after a set period of time.