Soviet factories polluted far more while producing far less.
These are points about economic theory, not necessarily about economic fact. And I'm pretty sure you could find an example that goes along with this, maybe in some tiny industry; it's not as if polluting industries and government subsidies are in short supply, and mini-monopolies are quite common, so an example of this has to exist somewhere.
Additionally, "natural" monopolies (as opposed to government-instituted monopolies such as Bell) such as Standard Oil -didn't- underproduce. They can't afford to.
Standard economic theory says the opposite.
Now the theory may be wrong, but I stand by my point that economic theory is not a morality tale.
Your point may or may not be accurate, but it's not made by the post. Your post at the minimum comes across as being dependent on two facts which are not in evidence.
I'd suggest fleshing it out with more abstract reasoning; your argument literally consists of an example. You don't even explain what exactly it is your examples are supposed to be demonstrating. I -think- your point is that there isn't a single unifying moral perspective in economics - that is, there are trade-offs and opportunity costs in economics, including in the moral sphere. I agree with that point, if that's the point you're making. I just don't think your post does a good job making the point as-is.
Example nicked from this online Berkeley lecture.
Monopolies are bad (morality and economics agree here).
Firms that pollute are bad (morality and economics agree here).
What about monopolies that pollute?
What about strong monopolies that pollute and receive government subsidies?
Well...
Pollution, and other negative externalities, cause firms to produce too much of their product. That's because they don't pay the full cost of the product, including the impact of pollution.
The equilibrium behaviour for monopolies is to produce too little of their product, to keep prices and profits high.
So a monopoly that pollutes is subject to two opposite tendencies: the unpriced-pollution tendency to produce too much, and the monopolistic tendency to produce too little. If the effects are of comparable magnitude, then the monopoly might be much closer to social optimum than a free market would be (the social optimum, incidentally, will generally involve some pollution: we need to accept some pollution in the production of fertiliser, for instance, in order to have enough food to stop people starving).
In fact, if the monopolistic effect is too strong, then the firm may under-produce, even taken the pollution effect into account. In that case, we can approach closer to the social optimum by... subsidising the polluting monopoly to produce more!!
And that, my friends, is why economics is not a morality tale.