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View Diary: Is oligopoly the natural evolution in supercapitalism? (17 comments)

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  •  yes, oligopoly is inevitable. its already here. (5+ / 0-)

    In the ideal world of the free-market libertarians, the economy consists of a large number of Lilliputian small businesses, none of which is large or strong enough to dominate the others—the theoretical basis of neoliberal classical economics. In this economy of small competitors, however, there are inevitably winners and losers. In the ideal Smithian world, the losers are quickly replaced by new competitors. In the real world, however, as the losers are absorbed by the winners, the winners get bigger and more powerful, and the number of players slowly shrinks. As the number of players gets smaller through competition, moreover, the winners continue to get bigger and bigger—particularly when large numbers of small players agree to improve their power by banding together into one player, the joint stock corporation. This not only greatly reduces the number of players, but the huge amount of money that is now necessary to allow newcomers to enter the field, limits and eventually eliminates the possibility of new players. Therefore, as competition between the small number of huge corporations carries on, the winners continue to absorb the losers and get even bigger, while the number of players continues to decline as they absorb each other. If the process is allowed to continue naturally, through the free market, the inevitable result is oligopoly, where a tiny number of players own everything—and then leading to monopoly, in which one ultimate winner stands supreme.

    That is why the libertarian free-market philosophy fails. The inevitable result of competition is monopoly, and the only way to prevent that is to prevent economic winners from growing larger through absorbing losers—i.e., by massive government interference in the natural process of the “free market”. Which makes the free-market ideology itself utterly irrelevant. We simply do not live in an Adam Smithian economy. The free-market fundamentalists are defending a world that no longer exists—and indeed in their ideological fervor, most of them refuse to even acknowledge that it no longer exists.

    In every industry, there are a small handful of huge                supra-national corporations who run everything. What is new, however, is the internationalization of those oligarchs.  Up until the 80’s, corporations tended to stay within their own national or regional areas, and each market area was dominated by a tiny number of huge companies.  What has happened in the past 30 years, however, since the time of the Multinational Wars, is that those huge corporations began going international, invading each other's turf and setting off a global economic war that has still not yet ended. As the regional corporate powers killed each other off globally, instead of having four or five major companies dominating each region, now we have four or five huge companies dominating the entire world market. So now we have global oligopoly instead of regional. The globalized economic structure set up by the supra-nationals has not ended that competitive conflict; what it has done is impose an agreed-upon set of “rules of war” on everyone so that the warfare does not pull the entire system into collapse.

    Economically, the whole philosophy of “free market” is a waste of breath. There simply is no “free market”, and there hasn’t been for decades. There is only oligopoly everywhere we look—whether it’s electronics, automobiles, energy, transportation, food distribution, retail, or any other industry. A tiny handful of supra-national      mega-corporations owns everything. Worldwide. The essence of capitalism is that losers who lose are absorbed by the winners, who then get bigger--until the point where they are so big no one can compete with them anymore. The economic world today consists of a small number of huge corporations that are bigger, richer, more powerful and with more effect over people's lives than any national government.

    Free-market competition inevitably leads to concentration and monopoly. And when you allow rich and powerful people to do whatever they want (the "free market"), they will do . . . well . . . whatever they want.

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