When Capitalism becomes Oligopoly / by kevin murray

What makes America great is that it is the land of opportunity, but when that door of opportunity, essentially closes because there are certain industries that the barriers of entry have become so high or the door has been essentially closed, so that no other company can ever successfully enter, than dangerous territory indeed has been entered.  For instance, governments of all stripes have a symbiotic relationship with certain corporations, so that contracts that are ostensibly setup as open-bidding and competitive, are structured in such a way, that only one company can win, which is fantastic for that company which knows that it can booked that business consistently each and every year.

 

So too, there are many businesses, such as drugstores, grocery stores, aircraft, liquor manufacturers, health care insurance providers, tobacco, and so forth, in which at the inception of these businesses there are many, many players, but over time there is consolidation in the industry, especially consolidation in which the biggest players don't really buy out the smaller companies, but instead buy out their biggest and most formidable competitors in order to build up size, scale, and girth. While a successful argument can be made that bigger size brings efficiencies of scale that is than passed on to the consumer, it can also be argued that bigger size with far fewer competitors allows such competitors to price their goods at a price that gives those companies a greater margin because consumers have less choice in finding a meaningful competitor that is both convenient as well as cheaper in cost.

 

Capitalism taking to the extreme -- encourages companies to make it their purpose in life, to systematically increase their market share each year, to maintain or improve gross margins, and to win their marketplace which can mean, doing what it takes to damage or to minimize or buy-out other competitors.  So too, size makes a difference in the negotiation with governments or civil authorities in regards to taxation, as well as land usage or land set asides, along with labor usage or labor wage pressures, and so forth, because gainful employment is part and parcel of what every community desires for their residents.

 

Additionally, size matters in regards to the setting of rules and regulations, so that if your corporation is just a little minnow, the best and the brightest don't have any incentive to engage you in a conversation, because your company does not have the means or power to compensate those at the very top, but those companies that are big and powerful, and set to become even bigger and more powerful, are exactly the type of corporations that will be able to attain the highest echelons of power brokers that bridge the gap between onerous regulations and beneficial ones, as well as onerous taxation and beneficial ones, and so forth.

 

Everyone knows that money is a form of power, and concentrated money along with controlling employment opportunities, is a most vibrant form of power.  These corporations, unlike human beings, are structured to last perpetually, so that as their power and influence grows, they are able to assure themselves come what may that they will be the survivors and there will be none that successfully oppose them.  Businesses that have essentially only three or four competitors in which these "competitors" control fifty percent or above of the total business in play, have effectively bossed that business, because they often control or are able to heavily influence the price, the availability, and the usage of their products in a manner that benefits these corporations to the exclusion of their consumers.

 

Concentrated power by corporations is a very dangerous thing, while it can provide benefits to the consumer, the downside is that those that have control of the means of production as well as its attendant pricing and availability, can and will lord it over those that need these substances.