Monopoly and Competition in Twenty-First Century Capitalism

[Hannah Bell]

A striking paradox animates political economy in our times. On the one hand, mainstream economics and much of left economics discuss our era as one of intense and increased competition among businesses, now on a global scale...On the other hand, wherever one looks, it seems that nearly every industry is concentrated into fewer and fewer hands... In short, monopoly power is ascendant as never before.

This is anything but an academic concern. The economic defense of capitalism is premised on the ubiquity of competitive markets, providing for the rational allocation of scarce resources and justifying the existing distribution of incomes. The political defense of capitalism is that economic power is diffuse and cannot be aggregated in such a manner as to have undue influence over the democratic state. Both of these core claims for capitalism are demolished if monopoly, rather than competition, is the rule...

Under competitive conditions, investment will... be greater than under conditions of monopoly, where the dominant firms generally seek to slow down and carefully regulate the expansion of output and investment so as to maintain high prices and profit margins... Hence, monopoly can be a strong force contributing to economic stagnation... With the United States and most of the world economy...stuck in an era of secular stagnation and crisis unlike anything seen since the 1930s—while U.S. corporations are sitting on around $2 trillion in cash—the issue of monopoly power naturally returns to the surface.

In this review, we assess the state of competition and monopoly in the contemporary capitalist economy...In particular, we review how the now dominant neoliberal strand of economics reconciled itself to monopoly and became its mightiest champion, despite its worldview—in theory—being based on a religious devotion to the genius of economically competitive markets.

Chart 1. Number and Percentage of U.S. Manufacturing Industries in which Largest Four Companies Accounted for at Least 50 Percent of Shipment Value in Their Industries, 1947-2002




Chart 2. Revenue of Top 200 U.S. Corporations as Percentage of Total Business Revenue, U.S. Economy, 1950–2008




Chart 5. Total Revenues of Top 500 Global Corporations as Percentage of World Income (GDP), 1960–2009




http://monthlyreview.org/2011/04/01/monopoly-and-competition-in-twenty-first-century-capitalism


Interesting that the trend toward concentration & monopoly has been straightline since the "Reagan Revolution".

[Starry Messenger]

1. k&r

[JCMach1]

2. Deregulation = less competition and higher prices

People need to come to understand this.

[Exilednight]

3. This completely kills the myth about small business being the backbone of the economy. Small

business had their spine ripped out by multi-conglomerates.