Sunday, April 3, 2011

Competitive Markets?

A striking paradox animates political economy in our times. On the one hand, mainstream economics and much of left economics discuss our era as one of intense and increased competition among businesses, now on a global scale. It is a matter so self-evident as no longer to require empirical verification or scholarly examination. On the other hand, wherever one looks, it seems that nearly every industry is concentrated into fewer and fewer hands.

Formerly competitive sectors like retail are now the province of enormous monopolistic chains, massive economic fortunes are being assembled into the hands of a few mega-billionaires sitting atop vast empires, and the new firms and industries spawned by the digital revolution have quickly gravitated to monopoly status. In short, monopoly power is ascendant as never before.


This is anything but an academic concern. The economic defense of capitalism is premised on the ubiquity of competitive markets, providing for the rational allocation of scarce resources and justifying the existing distribution of incomes. The political defense of capitalism is that economic power is diffuse and cannot be aggregated in such a manner as to have undue influence over the democratic state. Both of these core claims for capitalism are demolished if monopoly, rather than competition, is the rule...
~ from Monopoly and Competition in Twenty-First Century Capitalism at Monthly Review ~
As a confirmed socialist, you already know how I feel about this statement! The question is: What do you think about it? Do you agree or disagree with the brief analysis above and why.

1 comment:

  1. As spiritual systems and the Church once were defining forces in human evolution ... this has become the "post-modern" era of economic man... one could make a case that the "economy" like the church has become corrupt. Capitalism and socialism (you are confirmed in that church!) are just two "denominations" of the economy. CEOS and national leaders are bishops and popes. Neither of the denominations are capable of reform because it's all about power and money. People have become irrelevant and the economy just cares about itself. Things are completely out of control.

    Not sure this is to the point of your post, but it just came to me.

    ReplyDelete

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