AlterNet: Monopoly Capitalism Is the Root of All of America's Problems

[marmar]

Monopoly Capitalism Is the Root of All of America's Problems

By Daniela Perdomo, AlterNet. Posted December 31, 2009.

Monopoly capitalism exemplifies everything that's gone wrong with American politics, and we need to do something about it -- soon.




Something is rotten in the state of American capitalism, and if you agree with Barry C. Lynn, almost all stinky paths lead to the monopolization of our economy. The rise of behemoths like Wal-Mart and Viacom are not only lowering the quality and safety of the products you use, but also undermining our so-called democracy.

I had a chance to speak to Lynn about just how bad things are -- and what we might be able to do about it. Lynn's new book, Cornered: The New Monopoly Capitalism and the Economics of Destruction, from Wiley Press, will be out in January.


Q:
Barry C. Lynn: We can achieve it and there’s proof we can because we’ve done it in the past. In the late 19th century there was a really incredible process of monopolization. In the Guilded Age, you ended up with really tight concentration of control over finance in Wall Street. Think of Standard Oil, of U.S. Steel. There was some effort to break up those companies in the early 20th century but the real change took place after what people call the Second New Deal. The Roosevelt administration ended up breaking up a number of companies. What they did most successfully is stop the growth of massive companies and created space for new companies to grow.

In the middle of 20th century century, again there was a case in which we actually undid many of the powers and protected the entrepreneur. It was policy that at least three or four companies had to be competing with each other in each industry -- and preferably eight or ten. There’s the Alcoa case, for example. They had a 100 percent steel monopoly through the end of World War II. After the war, the government created opportunities for new companies and forced Alcoa to share its technology with new companies.

We have a lot of experience with this, we’ve done it on a whole-scale in the past, and doing so would be creating a lot of interest in these companies. There are lot of managers in Wal-Mart, for example, who won’t rise up in the ranks in such a large system, but if there’s 30 smaller Wal-Marts, lots of individuals can reach their full potential. Companies aren’t monolothic in nature. They’re made of people, and lots of these people have an interest in breaking them up.

Q: What about shareholders’ and board members’ interests? They surely wield more power and sway over these kinds of decisions than associates at a huge company like Wal-Mart.

BL: Right. Well, Alan Greenspan was one of the engineers of the roll-up of modern monopolization over the past 30 years. As a student, he studied the Standard Oil case, in which there was this argument that pretty much went: “Let’s not break up Standard Oil because it’s so much more efficient than the little pieces if they were separated.” The Supreme Court at the time said that didn’t matter, because we must have competition and broke Standard Oil up anyway.

Greenspan went on to use the flawed argument that big things are more efficient to aid in overturning antitrust law in 1981. After the near-collapse of the financial system in 2008, he woke up to see all these too-big-to-fail banks. Greenspan has since been one of the people to say we have to break up the banks. We shouldn’t be afraid of this because, as we found with Standard Oil, after we broke it up, all the constituent pieces were actually worth much more for the investors than what Standard Oil had been valued at when it was a single entity. ...........(more)

The complete piece is at: http://www.alternet.org/politics/144787/monopoly_capitalism_is_the_root_of_all_of_america%27s_problems

[bemildred]

1. What pisses me off is that we have been through this shit many times before.

It's always the same, and it always works out the same, but it makes a few people filthy rich, and they OWN the politicians, so we keep right on doing it.

[proudohioan]

2. +!

:thumbsup: :thumbsup:

[tom_paine]

3. Clearly it is something hardwired into human nature.

On both the dominant/aristocratic side and the submissive/peasant side.

It shows something very dark at the heart of our monkey species that it's the same show ovetr and over and over...

It pisses me off, too, but maybe we should concentrate that in most other eras in history, we'd be getting the shit beaten out of us or worse by medieval-minded mobs or judicially murdered or burned at the stake like all those liberal witches did.

hooray. :-(

[bemildred]

6. Don't try to cheer me up. nt

[tom_paine]

7. LOL. Happy new Year.

[Name removed]

12. Deleted message

Message removed by moderator. Click here to review the message board rules.

[bemildred]

13. You don't know shit about me.

Do you think it's easy being poor?
Take your guilt and shove it.

[rateyes]

4. Exactly. That's why we have to tax the stuffings out of the wealthy, and redistribute

the wealth to the poor, and break up the monopolies.

Ever get to the end of a game of Monopoly? Bet no one has. Why? Because before the game ends it becomes obvious who the winner is going to be and everybody else quits the game before they run out of money completely. The monopoloy holder can't "rent" any more houses or hotels because no one has any money to rent them.

Money is just like water---flowing, it's a good thing---standing still it becomes stagnant. That's why the economy is on the brink, and why TARP without new regulations just delays the inevitable.

The next TARP should be in the form of $10,000 vouchers to every American. And, the rich need to have their wealth above a certain amount taxed at 95%.

[unc70]

5. Alcoa is aluminum, not steel.

Like in the company name and its history. The premise might have some basis, but his argument is weakened by little details like this.

[starroute]

8. It's an interview -- people misspeak when they're talking live

Since he had just mentioned US Steel, you can be sure he knows the difference.

[unc70]

9. He may know the difference, readers might not

Usually when publishing a transcript that is "cleaned up" as this one is, you at least note such corrections. (Cleaned up by editing it into sentences rather than the actual way we speak, etc.)

We all make mistakes whether speaking or posting online, so this is only a small thing. Just altering my fellow DUers of the error.

[Vidar]

10. K&R.

[depakid]

11. Excellent article K&R

[fasttense]

14. Very good article but he needs to explain how monopolies are destroying jobs.

Aside from being able to move jobs to countries with child labor, just the act of monopolizing destroys jobs.

If we have 5 grocery stores and one corporation buys out the other 4, you end up with only one grocery store. One store does not need as many workers as 5 do. By monopolizing a function or commodity in an area, you have eliminated multiple jobs. 5 grocery stores would have hired 500 people, but 1 grocery store only needs 100 people, you have just destroyed 400 jobs.

[LWolf]

15. Good read.

I'm sorry I didn't find it in time to recommend, but I'll give it a :kick: