Corporate consolidation and the failure of American liberalism
The last great antitrust action by the US government against a major American corporation was carried out in 1984, when AT&T was broken up into various "Baby Bells" which provided local phone service, while AT&T itself provided long distance phone service. In the intervening years since that action, we have seen the gradual reconsolidation of these various phone companies. This reconsolidation has, in essence, undermined the original act of breaking up the original monopoly. The latest example of this is the buyout of BellSouth by AT&T. This serves as yet another nail in the coffin of the 1984 antitrust settlement.
The government doesn't really pursue antitrust cases much anymore. There was an abortive attempt at breaking up Microsoft a few years ago, but it never actually took place. Antitrust laws are seen as rather passe by the political establishment of both political parties these days. It used to be that antitrust action was seen by liberalism as an important tool in fighting corporate power. The Sherman Antitrust Act, and later acts of trustbusting by reformers during the Progressive Era of the early 1900s, served as a response to the power of corporations. Of course, this posture of trustbusting came back at a time when liberals thought that corporate power was a problem that actually needed to be addressed. Such is not the case anymore, when Democratic Party politicians and corporate interests are deeply intertwined, when members of the Clinton Administration and corporate executives moved back in forth between their mutually interlocking spheres.
There is, of course, an inherent problem with antitrust enforcement, and this is highlighted by what we have seen in the telecommunications industry since that 1984 antitrust settlement. The natural tendency of corporations under capitalism is to grow and consolidate. An antitrust enforcement is only a temporary remedy; over time, as we have seen with the Baby Bells and AT&T, the corporations will simply merge once again into larger and larger corporate entitiess, until competition once again diminishes. This is the nature of capitalism. Thus antitrust laws only work as a temporary reversal of an inevitable process in capitalist economies.
Antitrust laws are inherently self-contradictory. This is because such laws are predicated on a celebration of the virtues of competition--and as such, their goal is to stimulate more competition by trying to undo the very thing that competition inevitably leads to. Competition is good, according to this theory--but as soon as we increase competition via antitrust action, we have created the very conditions under which competition will diminish.
There is another, more fundamental, underlying problem with this philosophy of celebrating competition. Competition lies at the heart of market economics, and it is the anarchic nature of market economics that serves as one of the most serious indictments of capitalism. Competition produces an irrational and ruthless system by which profits, rather than human needs, serves as the basis of economic activity. Competition also means business failures, layoffs, unemployment, and massive disparities in wealth. By celebrating competition, we celebrate "letting the market decide". But the market isn't always very good about deciding things. The market doesn't care anything about human needs. You can't separate competition from the various attendant evils of market economics.
The very process of corporate consolidation, which is also a by-product of competition, often produces more of these very evils. Such consolidation almost inevitably leads to layoffs--it is likely that this AT&T takeover of BellSouth will result in job cuts.
These failures of antitrust policy have highlighted the failure of liberalism as a means of reforming capitalism. American liberals, out of an apparent desire to disassociate themselves from socialism as much as possible, generally did not call for nationalization of large corporations. The sole hope they offered for countering corporate power, during those times when they actually cared about such things, was a failed attempt at limiting the power of the trusts by breaking them up. This strategy, which over the past century has proven to be a failure, has left liberalism with no viable tools to offer as a means of reforming corporate power. As a result, modern liberalism, especially as manifested by its electoral organ the Democratic Party, doesn't even bother to oppose corporate power anymore. The Clinton Administration, for example, maintained a close relationship with Monsanto. As a 1999 newspaper article by Tom Rhodes of the London Times reported:
With the failure liberalism and the Democratic Party to address corporate power, we are now left with an economic system in which market forces are allowed to operate full throttle. Simply hoping to renew antitrust enforcement is a naive response to the problem. The solution to corporate power lies not in breaking it up, but in society taking control of "the commanding heights of industry" and managing the economy on the basis of human need rather than profits.
The government doesn't really pursue antitrust cases much anymore. There was an abortive attempt at breaking up Microsoft a few years ago, but it never actually took place. Antitrust laws are seen as rather passe by the political establishment of both political parties these days. It used to be that antitrust action was seen by liberalism as an important tool in fighting corporate power. The Sherman Antitrust Act, and later acts of trustbusting by reformers during the Progressive Era of the early 1900s, served as a response to the power of corporations. Of course, this posture of trustbusting came back at a time when liberals thought that corporate power was a problem that actually needed to be addressed. Such is not the case anymore, when Democratic Party politicians and corporate interests are deeply intertwined, when members of the Clinton Administration and corporate executives moved back in forth between their mutually interlocking spheres.
There is, of course, an inherent problem with antitrust enforcement, and this is highlighted by what we have seen in the telecommunications industry since that 1984 antitrust settlement. The natural tendency of corporations under capitalism is to grow and consolidate. An antitrust enforcement is only a temporary remedy; over time, as we have seen with the Baby Bells and AT&T, the corporations will simply merge once again into larger and larger corporate entitiess, until competition once again diminishes. This is the nature of capitalism. Thus antitrust laws only work as a temporary reversal of an inevitable process in capitalist economies.
Antitrust laws are inherently self-contradictory. This is because such laws are predicated on a celebration of the virtues of competition--and as such, their goal is to stimulate more competition by trying to undo the very thing that competition inevitably leads to. Competition is good, according to this theory--but as soon as we increase competition via antitrust action, we have created the very conditions under which competition will diminish.
There is another, more fundamental, underlying problem with this philosophy of celebrating competition. Competition lies at the heart of market economics, and it is the anarchic nature of market economics that serves as one of the most serious indictments of capitalism. Competition produces an irrational and ruthless system by which profits, rather than human needs, serves as the basis of economic activity. Competition also means business failures, layoffs, unemployment, and massive disparities in wealth. By celebrating competition, we celebrate "letting the market decide". But the market isn't always very good about deciding things. The market doesn't care anything about human needs. You can't separate competition from the various attendant evils of market economics.
The very process of corporate consolidation, which is also a by-product of competition, often produces more of these very evils. Such consolidation almost inevitably leads to layoffs--it is likely that this AT&T takeover of BellSouth will result in job cuts.
These failures of antitrust policy have highlighted the failure of liberalism as a means of reforming capitalism. American liberals, out of an apparent desire to disassociate themselves from socialism as much as possible, generally did not call for nationalization of large corporations. The sole hope they offered for countering corporate power, during those times when they actually cared about such things, was a failed attempt at limiting the power of the trusts by breaking them up. This strategy, which over the past century has proven to be a failure, has left liberalism with no viable tools to offer as a means of reforming corporate power. As a result, modern liberalism, especially as manifested by its electoral organ the Democratic Party, doesn't even bother to oppose corporate power anymore. The Clinton Administration, for example, maintained a close relationship with Monsanto. As a 1999 newspaper article by Tom Rhodes of the London Times reported:
This is what liberalism and the Democratic Party are left with--close ties with corporate interests. No longer even bothering to attack big business, liberal politicians now lie in bed with it instead.
[Monsanto's] ties with the White House are strong. Mickey Kantor, the former trade representative and chairman of Bill Clinton's 1992 presidential campaign, is a board member. Marcia Hale, Monsanto's international regulatory director, was a top presidential assistant. Linda Fisher, the vice-president for federal government affairs, mapped pesticide policy for the Bush White House. Michael Taylor, a former FDA commissioner, has been hired as a strategist.
Shapiro has courted the Clintons, sponsoring the president's welfare-to-work programme and involving Monsanto in the micro-enterprise summit for developing nations, one of Hillary Clinton's pet interests. The White House views Monsanto as a "Democratic company" and actively promotes biotechnology through the good offices of Madeleine Albright, the secretary of state, and Al Gore, the vice-president.
With the failure liberalism and the Democratic Party to address corporate power, we are now left with an economic system in which market forces are allowed to operate full throttle. Simply hoping to renew antitrust enforcement is a naive response to the problem. The solution to corporate power lies not in breaking it up, but in society taking control of "the commanding heights of industry" and managing the economy on the basis of human need rather than profits.
I found this blog surfing.
The post was excellent and well written. Being against monopoly is not on the liberal agenda.
Posted by
Frank Partisan |
8:24 PM
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