There’s a great piece in Harper’s Magazine about modern day America’s monopolies and cartels.
Google, Apple, Intel, Pixar and other Silicon Valley corporations have formed a labour cartel, refusing to poach each other’s staff so that they can keep wage costs down and hours worked up. Chicken giant JBS insists on selling feed and chicks to its supplier farmers, then weighing and tallying their produce behind closed doors and setting a price they have to accept or be damned to bankruptcy on their mortgage. Anheuser-Busch InBev & MillerCoors control 90% of the beer market, and control virtually all distribution for any smaller players into bars and supermarkets. Amazon has between 70 and 80% of online book sales (both e- and physical), and largely controls what publishers (and authors) will get paid.
And we have our own versions here in New Zealand. Chorus’ engineers, many taxi and courier drivers are all contractors who cannot work for another company easily. They only have one buyer of their labour who – rather than face labour law restrictions – makes them self-employed so there is no minimum wage, or maximum hours, or holiday/sick pay or… We need to work out how to protect these workers.
Fletchers – which grew huge due to the first Labour Government’s house building programme – now largely controls our new house building supply, leaving us with much higher building costs than overseas, and a shortage of housing as people can’t fund that cost. And in the Christchurch rebuild? When they reduced the rate for each square metre of interior decorating completed (shared between contracting plasterer and painter) from $25 to $19 on Monday they claimed the new price was the market rate. When you are the market, what ever you pay is the market rate…
In the old days monopolists JD Rockefeller and JP Morgan acknowledged their power openly and defended it: Yes, they had centralized control over entire industries, and yes, they ruled as despots; but they wielded such power to organise production and trade more efficiently.
Today, our overlords not only refuse to defend the power they hold—they deny that it is even possible for any American to accumulate such power. And to make such an absurd claim stick, they (or the more politically sophisticated of the academic economists in their employ) have undermined our language itself. Their most impressive act of lexical legerdemain was the coinage of various misnomers, some so audacious as to be worthy of Orwell’s Ministry of Truth. Corporate monopoly? Let’s just call that the “free market.” The political ravages of corporate power? Those could be recast as the essentially benign workings of “market forces.”
is an equality between the seller and the buyer, achieved by ensuring that there are many buyers as well as many sellers. Second is transparency. Everyone sees the quantity and quality of the product on offer, and the price at which each deal is done. A third characteristic is a tendency to deliver egalitarian outcomes. On any given day, once the supply of a product has been hauled to market and appraised, all sellers receive roughly the same price per unit. Offer a seller less than the prevailing price, and you walk away empty-handed. Demand more from buyers, and your goods sit untouched.
In tournaments, as devised and promoted by one of George W Bush’s top economic advisors Edward Lazear, the sellers of goods/services/labour have nowhere else to go, there is one buyer. Transparency is removed for sake of efficiency. And egalitarian prices are removed as we pay more (or more likely less) as “incentives”. You can deride the free market, but this isn’t even that. The political aim of tournaments is the opposite of real markets:
Citizens structure markets, first and foremost, to protect individuals from massed capital. Lazear’s tournaments are designed to maximize return to capital. They do so precisely by setting individual citizens against each other, like cocks in a pit.
And that’s where we’re left – trying to slit each other’s throats, while the monopolists grow fat.