Since Ronald Reagan came to power, the anti-monopoly laws and regulations of the US government have been completely gutted. Under the disguise of deregulation, monopoly economic power has come to dominate most sectors of the American economy. Consumers, workers and our free democratic forms of government has all been made to suffer.
Traditional students of economic theory understand that Adam Smith put forward a great argument for capitalism. He outlined a capitalism that served the greater good of mankind and society as a whole based on individuals advancing their individual economic interests. His theories were based on premises that include free and equal access to capital (money) and knowledge. He supposes that no individual economic entity would have more market power than other. All players should be equal and not have undue advantage over others. Any system that permits such advantages is not truly capitalism.
Capitalism breaks down as an efficient economic system the more these premises are denied by reality. Nothing threatens these premises more than monopoly power. True capitalists should support government actions that create a truly capitalist economic system.
Monopoly power permits large corporations to control prices charged customers, prices paid suppliers and wages paid workers. Small competitors can be driven from the market place as a result of economic control created by monopoly power. The excessive wealth generated by monopoly power can be used to buy politicians, alter public opinion with advertising or buying media outlets and to thwart government regulations by various means.
Monopoly power can be exercised by individual corporations or by groups of corporations acting together for their mutual self-interest. This power can control a whole national economic sector like oil, energy, drugs and the like. It can impact just a specific community like a Wal-Mart or buying up radio stations, newspapers and TV stations to control advertising rates and political information. Regardless of the specific forms that monopoly power takes, it always damages the public good.
International competition simply does not diminish monopoly power in significant ways especially in specific communities. Internationalizing an economy actually reduces the power of labor to negotiate on a more equal footing with businesses to obtain livable wages and benefits like health insurance. Competing with corporations from nations where their governments provide health insurance puts American corporations at a disadvantage. The result is often either the monopolistic corporation becomes a foreign corporation or the American corporation becomes internationalized by moving operations out of our nation. Effective anti-monopoly laws could be used to regulate unfair economic competition from inside our nation or from other nations.
It is time to put teeth in our anti-monopoly laws and regulations again. Media concentrations, oil, banking, drug companies, insurance and health care should be looked at first as places were monopoly power ay be distorting our economy. We need a truly capitalist system as envisioned by Adam Smith instead of this Wall Street pseudo-capitalist Corporate dominated economy currently dominating America. The current system is a bad way to run an economy. It is both inefficient and unfair. It threatens are democratic institutions as well. It is time for serious reform
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Stephen Crockett is co-host of Democratic Talk Radio and author of the Democratic Voices opinion column.
