You, average consumer, average worker, average American, are getting rooked. And you probably don’t exactly understand why, but you suspect you are often paying through the nose and have less ability to sell your labor for a good price.
That’s because the government’s anti-trust efforts have been failing. Less competition and greater inequality are the result of the government not enforcing the rules against cartels, which can then pay us less as workers and charge us more for their products than if we had a vigorous competitive economy.
And, instead of the government stopping the monopolies, the government is part of the problem. Indeed, sometimes the government, explicitly or tacitly, encourages or allows anti-competitive practices. Then most of us suffer with only a few big companies dominating a sector. The potential for new entities to shake up a sector is well-nigh impossible.
That, in essence, is the thesis of this compelling but controversial book, The Myth of Capitalism. I found myself in agreement with about 70 percent of the book’s arguments.
We see this lack of competition, the authors reported, in various disturbing ways: Two corporations control 90 percent of the beer Americans drink. Four players control the entire U.S. beef market. Five banks have about 50 percent of the nation’s banking assets. Four airlines dominate airline traffic, often having local monopolies. This is dangerous, the authors warned.
“Capitalism without competition isn’t capitalism,” the authors stated at the outset.
D’accord.
Mein Gott! Capitalism without competition would be MTA subways in New York or the United States Postal Service or Amtrak or any of the many other state monopolies that should be sent to the ash can of history.
An objection I had to the authors thesis that trust busters are asleep at the wheel was the book didn’t take up some of the government’s most notoriously ineffective antitrust efforts such as the anti-trust case against IBM. This was a pathetic effort that basically fell apart; an anti-trust case that collapsed after many years in the courts. One could also examine the government’s repeated efforts against the supermarket chain A&P.
These cases, at the time of their filing, appeared reasonable. That’s because the companies then seemed as though they had captured the market forever. Indeed, I can remember economist John Kenneth Galbraith celebrated “dependence effect” idea of the 1950s and 1960s.