Crime

While economists usually limit themselves to discussion of legal activities, it is clear that criminal coercion can prevent competition and so create monopolies. This is probably most common in activities that are anyway illegal, such as gambling, which often seem to be local monopolies. (It's hard to be sure, for obvious reasons, and probably pretty changeable, too).

Once established in illegal activities, criminals may use their profits and means of coercion to monopolize businesses that are legal, in principle, such as small scale lending. A possible example is so-called "loan sharking." The "loan shark" makes risky loans, which is legal in itself, but limits his risk by using the threat of violence (which is not legal) to limit the risk and assure that the loan and interest are paid. High interest rates will be charged, and these may be illegal. When there is a high risk of default, loans will be supplied only at very high interest rates, legal or not. But, if the loan shark uses coercive threats to maintain a monopoly of these risky loans, the rate of interest may be even higher than the risk of default requires, because of a monopoly mark-up