Monopoly Capitalism Is Here. That’s Good for Corporations; Bad for Consumers
The recent announcement that T Mobile US Inc.’s takeover of Sprint Corp. has been approved by a New York federal judge means there will be a fundamental change in the U.S. wireless market. It also can mean an end to competitive pricing that benefits average consumers.
Even the Wall Street Journal said the new merger will be “test whether three giants (Sprint, T-Mobile, ATT) will compete as aggressively for cellphone users as four unequal players once did.”
The judge’s 173-page decision essentially ignored expert testimony from economists, engineers, consumer advocates, and academics from both sides as he ruled in favor of the merger on the hope that the new combined company will be beneficial to consumers.
But others were not so confident. “While the court may think it unlikely for a newly entrenched trio of enormous wireless carriers to collude rather than compete,” Matt Wood, general counsel at the media reform group Free Press, said in a statement, “the history of broken and abandoned merger promises from these companies — to say nothing of the mountains of evidence and expert analysis in this trial — say otherwise.”
What Wood referred to is corporations who merge and then falsely claim they will compete. This is a fallacy. This is because anti-trust is effectively dead thanks to neo-liberal policies that say there is no such thing as a monopoly and that market forces would correct for any pricing and anti-competitive practices. Both of these are wrong.
As evidenced by some of the largest mergers in recent years–Chevron buying Texaco; Oracle buying PeopleSoft (which had already purchased J. D. Edwards); NationsBank merging with Bank of America); Pfizer’s purchase of Wyeth, larger corporations in major industries has led to higher prices and larger bailouts and failures in bad economic times. Think that “too big to fail” came out of nowhere? No. they came from mergers in the airline, financial and banking industries. Higher drug prices? That is largely attributable to larger drug companies that hold more patents under one corporate umbrella.
The failure to enforce anti-trust laws has been going on for decades under both Republican and Democratic administrations. This is no surprise since huge corporations routinely made huge contributions to both parties. Whether the cash goes to Peter or Paul, the outcome is the same: No enforcement of anti-trust laws from the weak and increasingly politicized US Justice Department.
Now, under the Trump administration, the US Justice Department is essentially an external corporate and criminal defense law office for its biggest contributors.
Anti-Trust is the Child of Unregulated Capitalism
But it would be a mistake to think that the failure to enforce anti-trust laws happens in political and economic isolation.
The system is rigged by unregulated capitalism. This is old news. It is why corporations and financial institutions, among other businesses, hate regulation.
Regulation means accountability. Corporations do not want to be accountable, so they fight to be regulated. It’s simple once you realize that corporations make greater profits when they are unregulated, do not have unions, will not pay fines for pollution and hold back pay raises so they can buy back more of their own stock.
What we are seeing today is late-stage capitalism. It is called monopoly capitalism and this economic perspective explains the links between big finance, corporate ideology, and political power. This explains why we are seeing big mergers that continuing unabetted. More corporate concentration is an unjust, but inevitable result of unregulated capitalism.
As a result, corporations are becoming more monopolistic in the current pay-to-play political system. Larger corporations beget larget lobbying force and more political power at the expense of average citizens.
The net result is that consumers in a capitalist society have less power today. They can see the difference in their pocketbooks, the declining quality of their elected officials and their quality of life. Change will only come from the bottom up and that means an energized citizen movement to regulate capitalism with new leaders who understand today’s very compromised system.
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