– A Case Study Essay, Research Paper
Monopolies – A Case Study
John Brown
Monopolization And Its Implication On A World Scale
The monopolization of the capitalist system is at the base, a degradation, not only of the “free-competition” of the capitalistic (bourgeoises) socio-economic order, it is also, the degradation of the working class and, in fact, the respective systems imminent demise.
During the Cold War competition between potential monopolist nations, USA, France, Germany, England and Canada was highly minimized and co-operation was (ironically) encouraged to counter the Soviet threat. Today, with the fall of the pseudo-socialist states in the Eastern block and the subsequent degeneration of such states in Asia, cooperation has been deemed unnecessary and a general neo-imperialistic takeover, a rat race if the reader will bear with me, has been instigated.
However, it must be understood before the reader continues, the process unravelling before our eyes today, this disaster, is not a recent occurrence. Some economists and political analysts have dated its”birth” to the start of the Russo-Japanese war and the industrialization of the African colonies (imperialism).
This being the case, though imperialism is primarily considered a political phenomenon by bourgeoises economists, socialists have cooked deeper into the matter and “unveiled” the economic character of imperialism and it’s apparent contradictions (this will be dealt with later, as well as an overview of the historic contradictions, economic intricacies and ethical realities of imperialism. It should also be stated, that the term monopoly, “monopolization” will be dealt with from the left-wing point of view, as “imperialism”).
The two prevalent schools of economic thought, the left wing (socialist) and the right wing (libertarian, “laissez fare” capitalists …), have entirely different view on the matter of monopolization of capital.
While the socialist, especially those of the Marxist persuasion (to which the author belongs), claim that the monopolization of capital is the most significant event in the history of capitalism since robotics, the bourgeoises economist refuse to recognize (foolishly), that a change in economic structure has even occurred!
The contemporary bourgeoises media refers to the world market and it’s expansion. This term is so overused and under analysed that these pseud-master, have managed to use it as a veil, as a euphemism to downplay the historical change, brought about by the fall of the eastern block and the subsequent degeneration of the Asian “peoples’ republics”.
The “expanding world market”or the “world market”,on its own, has always existed and expanded to new markets, so the above terms , when applied to the monopolization of the world market by the imperialist nations (see above), is an example of false terminology.
The Domestic Consolidation of Capitalist Monopolies
The international hegemony of the imperialist nation is impossible on such a grand scale, without the consolidation of the monopolization of capital, within the respective nation itself.
The monopolization of capital in a single nation is, even though an important transformation, hardly baffling occurrence. It is, in essence, the domination of a single company (monopoly) or of many companies (oligarchies) over their respective competitions. At such a position, these companies wreck havoc on the market. They enter into special agreements (though they are in theory competitors) to artificially “jack-up” prices and inflate their profit margin at the expense of the consumer.
An essential part of the functioning of what leftists term imperialism is the role of the banks without which the monopolization of capital is impossible and anachronistic. The principal role of banks is to serve as middlemen in the making of payments. By managing is such activities, they transform inactive money capital into profit yielding capital as well as placing numerous money revenues at the disposal of the capitalists.
As a result, the banks grow, becoming monopolies themselves, obtaining at their disposal not only the profits of the capitalists, but the bulk of their capital as well. Through this process, the powerful banks “take after” the smaller ones and the market is left with a handful of superbanks having at their disposal the wealth of the whole nation. They enter into agreements to self interest rates and government policies basked on the way these banks function. This is incredibly detrimental because the general well being of the nation is confined and restricted to the demands of the money-making process. As a result over 95%of the population who does not control capital, is ignored. Lenin said it best, “The building of development…of capitalist monopolies is going full steam ahead in all natural and supernatural ways”.
The Suicidal Nature of Monopoly Capitalism
A logical consequence to the concentration of capital in the hands of an oligarchy is an apparently unacknowledged destruction of the economy. In the imperialist nations (USA, Canada, Germany, Japan) a whole leferature has sprung up in support of what is proudly called the “big business.” The job of the economists, publishing this garbage, is not to shed light on the debilitating methods of imperialism but to turn it into an act of skill and wit (which it uncontestably is) and draw the focus away from its destructive character.
Historically, capitalism, not only in its pre-imperialist stages, but even at its most primitive beginnings, was a system of freedom, according to Adam Smith. Smith, who did not foresee even the contemporary magnitude of the system he praised, glorified the free competition of capitalism and human resourcefulness upon which it depended. Today, bourgeois economists refuse to acknowledge that as the power of monopolies grows, they push out smaller businesses or even less powerful monopolies. This inevitably leads to unemployment by downsizing, full scale bankruptcy or an utter and complete takeover. A takeover thus, strengthens the power of the oligarchy (paradoxically) by reducing its size.
Today this is an increasing problem when one considers the massive havoc wrought on the market by “Dominion” takeover of “Loblaws”, the elimination of “Simpsons”, the Japanese domination of the U.S automarket, the bankruptcy to which Eatons is heading and many other numerous cases in the economic history of the Western world which need not be named as they are differed cases of the same negative trend which led to the consolidation of the massive unemployment rate in this country.
Through this process, imperialism, the brainchild of capitalism (ie. its later stage), ends up destroying its very foundation and its raison d’etre, free competition and its democratic spirit.
The Effect of Mergers on Monopoly Capitalism
The early socialist found themselves in two groups on the question of imperialism. They were led by Lenin on the one hand and Kautsky on the other. Though Lenin was the radical and the latter the moderate, Kautsky set forward his theory of “hyper imperialism” by which he stated that the monopolization of capital would lead to a more direct takeover of the state apparatus. He predicted that all monopolists from every industry would unite and directly run the state from a quasi-democratic government. Although essentially political in nature the theory reflect in today terms, the phenomenon of merger. It would not stop here for Kautsky, who went on to theorize that the phenomenon would reach international proportions. A “One World” economy and government would be created by uniting all common industries on an international scale.
Lenin believed that international co-operation was impossible due to what he called “petty bourgeoises” prejudices. He argued that Kautsky overestimated the enlightenment of the capitalists and did not understand the national question from an international angle.
Kautsky was right. Today mergers with telephone companies from different countries, as well as car manufacturers is common place such as Scotiabank merging with the bank of Thailand or the merger of “Sprint”with “Deuth Telecom”. Also the creation the UN as a proto-type of world government, is proving correct the foundations of Kautsky’s theory. Also the EU, an even better example has united many European companies in an attempt to counter the influence of US and Japanese capital.
By merging, 5 monopolies will be minimized to 4 with the 2 who merged as one concentrating 40% domestic capital in their hands as well as likely doubling, their profit. The purpose is to eliminate or “buy out” the other monopolies or to merge and create one “super enterprise”.
To achieve total dominance, the monopolies artificially lower prices to put the small business out of business. After they have asserted total market control they double and sometimes triple the prices to make up for the loss.
For this reason, mergers should be viewed with suspicion because the benefits they appear to offer at first will in the end cost everyone who does not have any means of capital (98% of the total population) in their possession.
The Consequences of the Export of Capital
In its pre-monopolist stages, it was a general facet of capitalism to export goods. The monopolization of capital, however, has brought about the export capital itself. Because the attainment of profits reaches such extremes in capitalism a natural result of this is a surplus of capital. This surplus is not used to better the living standard of the masses (for this would cut into bourgeois profits), but to enrich the bourgeoisie. The monopolist bourgeoisie then export the surplus, capital to less developed countries where land, labour and raw materials are cheap and capital scarce. Lenin said: “The need to export capital arises from the fact that….capitalism has become overripe and…cannot find a field for profitable investment.”
The export of capital however, is the privilege (in a large scale though), of the main imperialist countries, USA, France, Canada, Britain, Japan. This phenomenon does wonders to accelerate the development of capitalism in backward countries, though draining their resources in the process.
The Imperialistic Conclusion of the Monopolization of Capital
Regardless, this is the world economy and what results is the hegemonistic stage of the division of the world among capitalist associations. Trusts, cartels and syndicates and the like now seek to cement their influence on a worldwide level as they have outgrown their shoes in their domestic countries.
Since politics is driven by the conquest of profit, it is only natural that spheres of influence and trade wars (1994 U.S-Japan) become more frequent. The U.S, an imperialist powerhouse now has practically a monopoly over the western hemisphere and over much of the world. But the monopolist bourgeoisie have developed monopoly capitalism to such a level, that wars between those nations for land have become redundant.
Now the “War” is for “markets”, eg: auto industry, technology, food, clothing etc…And the weapons are tariffs, blockades, embargoes. However the international monopolist bourgeoisie deal differently and very viciously with less developed countries (especially with those in possession of raw material eg: oil). When the Arab States sought to assert control over their oil industry, these States were labelled as renegades and dealt with military (eg: Iran, Iran, Libya).
It is part of the tyrannical nature of monopolism to liquidate its opponents at home and abroad. The less developed nation are pawns forced to fight one another (Bosnia, Rwanda..) Simply so that the imperialist nations can keep their armies their (under the guise of the UN).
We have now seen how the capital liquidates domestic competition, manipulates the banks and the proceeds to manipulate its political “superiors”. As a monopolist system, it exploits the world market and degrades other nations. It has caused international unemployment. It dominates the media.
The New Imperialism From a Philosophical Angle
The proposition of corrective measures to stop the development of monopolies is a futile concept because nothing is stopped, only delayed. Some have proposed limiting what percent of the market a monopoly can control. This does nothing as it will facilitate the above mentioned export of capital and all such ideas are confined to the same petty-bourgeoises notion which concludes to one degree or another in the export of capital. Since this is the pinnacle of monopoly capitalism, a new imperialism is born, a new system of colonies!
The post-Soviet economy is wild, unpredictable and much more difficult in the imperialist countries than the economy in the Soviet times. With the onslaught of unemployment, a drop in the standard of living the era of the red terror will be looked upon as a golden age. Now the release of imperialist tensions has ultimately destroyed that. The 50’s were the height of the red terror but also of imperialist cooperation-so the living standard in the imperialist countries was generally comfortable. Now the threat is gone and cooperation has turned into suspicion.
The monopolization of capital is not so much a threat because of its national implication or influence within its own border but specifically due to its international hegemony, which threatens the well begin of most of our specie.
It is a stage in the development of humanity much as feudalism, capitalism and others preceding those. How we emerge out of it as race is not determined by our own conscience, but by buying and selling. Imperialism has taken away our individual voices more so than capitalism and has restricted our destiny and future to buying and selling, and has left humanity in its bulk naked to savagery.