Tuesday, June 24, 2014

From Democracy to Monopoly

I can remember how we used to laugh at the communists. I remember talking with my dad about the troubles in the USSR during the cold war. I remember the stories. You know, like the story about the farm that lost an entire crop of tomatoes because someone forgot to make the boxes needed to carry them to market.

I remember the talk of long lines for toilet paper. How the government owned everything and how there was no market. There was no competition. So people suffered because there was no incentive to produce the goods that society needed.

Yeah. That's the old communist USSR I remember.

Then under the watch of Ronald "Grampa" Reagan, the Berlin Wall crumbled. The old USSR fell apart because it just wasn't working anymore. Poland, Czechoslovakia and the other communist satellites were freed from communism.

Here in America, something else was happening. Industry after industry began to consolidate. Where there were thousands of gas stations and hundreds of gas companies serving America, there are now only a few. There are fewer banks now than before. Fewer cable companies. Fewer supermarket chains. Just about every industry has consolidated down to just a few really big major players.

7 corporations control almost everything we buy for food.
6 corporations control almost all of the media.
1 or 2 competitors exist for internet access just about anywhere you care to live.
Some have suggested that 10 corporations control almost everything we buy.

When the market is consolidated, enough, the market leaders tend to cooperate rather than actually compete. One man may sit on the board of directors in several companies competing in the same space. When many men and women do this, we call it an interlocking directorate, a sort of union of corporations. Collusion between the companies could be easily obscured by holding informal meetings at the country club, at special industry "retreats" and other such gatherings.

We've seen such collusion between high tech companies such as Apple, Google, Adobe and Intel. These companies had agreed not to poach each other's employees in order to keep salaries down. They were all sued by employees affected by their agreements and settled for a mere $325 million. Seems like a lot of money, doesn't it? It's just a drop in the bucket.

What we think of as American competition has really turned into one giant game of collusion, deceiving the consumer into thinking that they're getting a good deal in a competitive market.

"But, but, capitalism is by far the best way to allocate resources!" Really? Maybe it is, maybe it isn't, who is to say when $1 trillion has been spent on two wars while nearly a billion go without clean water in the world. Heck, in Detroit, they're starting to turn off the water for for nearly 150,000 residents who can't pay their bills. At the same time, when business is past due, they get a pass. Even the UN is getting involved here.

Who could have predicted all of this consolidation, collusion and predatory finance? Marx?

No, I'm not a communist. I'm not a pure capitalist, either. I don't believe in pure ideologies of any kind. I believe in the middle road, the middle ground, in avoiding the extremes. I guess I'm kind of a ideological Buddhist. I can't even say that I have the answer to what is going on now. But I can say that the path we've been on just isn't working for all of us.

There's a better way, and I'm pretty sure that pure conservative ideology isn't it. It's going to be a mix of conservative, liberal and a dash of something else. But to take the pure approach is extreme, counter-productive and alienating to many of the people that government serves. Why should government serve only the richest people and corporations?

Because that's how capitalism works. It's not a bug, it's a feature.

We only need to decide if that's the way we want to continue or to make a change.
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