Monopolies may be classified as public monopolies and private monopolies. Public monopolies are those enjoyed by the state and its subdivisions, and are further classified as fiscal and social monopolies. Fiscal monopolies are those which are maintained by the state for the purpose of the revenue that they bring in. The tobacco monopoly in France is an example. Social monopolies are those which are maintained because they eonduce to the general welfare. The post office in most civilized countries is an example.

Private monopolies may be subdivided into personal, legal, natural, labor, and capitalistic monopolies. Personal monopolies are due to the fact that certain individuals have unique talents. The product of the inspired poet or the artistic genius cannot be duplicated by a competitor. Private legal monopolies rest upon grants made by the government. Patent, copyright, and franchise monopolies, such as the exclusive use of the streets for railway purposes, are examples. Natural monopolies may be subdivided into natural monopolies of situation, which arise from the monopolistic control of the supply of raw material, as for example in the anthracite coal mines in the United States, and natural monopolies of organization, which arise because of the fact that certain commodities or services are produced under the law of diminishing costs; that is, the larger the output of the commodity or service, the lower is the cost of producing a unit of such commodity or service. The railway business will serve as an example of this class of monopoly. Here there are heavy fixed charges which must first be met from the receipts, but when these expenses are once met additional service does not involve a proportionately increased expenditure. In competing businesses which operate under the law of diminishing expenses there is always a strong pressure inclining these businesses towards monopoly. Labor monopoly controls the labor supply through labor organizations, and thus influences wages. Finally there is the capitalistic monopoly, which owes its monopolistic character to the power and the advantages which come from the massing together of large amounts of capital. The modern trust is an example of this.