This article was originally published by Michael Snyder at End of the American Dream
Vibrant competition is absolutely essential in order for a capitalist economic system to function effectively. Unfortunately, in the United States today we are witnessing the death of competition in industry after industry as the biggest corporations increasingly gobble up all of their competitors. John D. Rockefeller famously once said that “competition is a sin”, and he was one of America’s very first oligopolists. According to Google, an oligopoly is “a state of limited competition, in which a market is shared by a small number of producers or sellers”, and that is a perfect description of the current state of affairs in many major industries. In early America, corporations were greatly limited in scope, and in most instances they were only supposed to exist temporarily. But today the largest corporations have become so huge that they literally dominate our entire society, and that is not good for any of us.
Just look at what is happening in the airline industry. When I was growing up, there were literally dozens of airlines, but now four major corporations control everything and they have been making gigantic profits…
AMERICA’S airlines used to be famous for two things: terrible service and worse finances. Today flyers still endure hidden fees, late flights, bruised knees, clapped-out fittings and sub-par food. Yet airlines now make juicy profits. Scheduled passenger airlines reported an after-tax net profit of $15.5bn in 2017, up from $14bn in 2016.
What is true of the airline industry is increasingly true of America’s economy. Profits have risen in most rich countries over the past ten years but the increase has been biggest for American firms. Coupled with an increasing concentration of ownership, this means the fruits of economic growth are being monopolised.
If you don’t like how an airline is treating you, in some cases you can choose to fly with someone else next time.
But as a recent Bloomberg article pointed out, that is becoming increasingly difficult to do…
United, for example, dominates many of the country’s largest airports. In Houston, United has around a 60 percent market share, in Newark 51 percent, in Washington Dulles 43 percent, in San Francisco 38 percent and in Chicago 31 percent. This situation is even more skewed for other airlines. For example, Delta has an 80 percent market share in Atlanta. For many routes, you simply have no choice.
And of course the airline industry is far from alone. In sector after sector, economic power is becoming concentrated in just a few hands.
For a moment, I would like you to consider these numbers…
- Two corporations control 90 percent of the beer Americans drink.
- Five banks control about half of the nation’s banking assets.
- Many states have health insurance markets where the top two insurers have an 80 percent to 90 percent market share. For example, in Alabama one company, Blue Cross Blue Shield, has an 84 percent market share and in Hawaii it has 65 percent market share.
- When it comes to high-speed Internet access, almost all markets are local monopolies; over 75 percent of households have no choice with only one provider.
- Four players control the entire U.S. beef market and have carved up the country.
- After two mergers this year, three companies will control 70 percent of the world’s pesticide market and 80 percent of the U.S. corn-seed market.
I knew that things were bad, but I didn’t know that they were that bad.
Capitalism works best when competition is maximized. In socialist systems, the government itself becomes a major player in the game, and that is never a desirable outcome. Instead, what we want is for the government to serve as a “referee” that enforces rules that encourage free and fair competition. Jonathan Tepper, the author of “The Myth of Capitalism: Monopolies and the Death of Competition”, made this point very well in an excerpt from his new book…
Capitalism is a game where competitors play by rules on which everyone agrees. The government is the referee, and just as you need a referee and a set of agreed rules for a good basketball game, you need rules to promote competition in the economy.
Left to their own devices, firms will use any available means to crush their rivals. Today, the state, as referee, has not enforced rules that would increase competition, and through regulatory capture has created rules that limit competition.
Our founders were very suspicious of large concentrations of power. That is why they wanted a very limited federal government, and that is also why they put substantial restrictions on corporate entities.
When power is greatly concentrated, most of the rewards tend to flow to the very top of the pyramid, and that is precisely what we have been witnessing. The following comes from the New York Times…
Even when economic growth has been decent, as it is now, most of the bounty has flowed to the top. Median weekly earnings have grown a miserly 0.1 percent a year since 1979. The typical American family today has a lower net worth than the typical family did 20 years ago. Life expectancy, shockingly, has fallen this decade.
So what is the solution?
Well, one of the big things that we need to do is to stop crushing small business.
In America today, the rate of small business creation has been hovering near all-time lows and the percentage of Americans that are working for themselves has been hovering near all-time lows.
In order for more competition to exist, we need more competitors to enter the marketplace, but instead we have been crushing “the little guy” with mountains of regulations and deeply oppressive taxes.
And you know what? Many of the big corporations actually like all of the red tape because they know that they can handle it much easier than their much smaller competitors can. That gives them a competitive advantage, and it creates a barrier to entry that is difficult to overcome.
When I was in school, I was taught that one of the reasons why the U.S. system was so much better than communist systems was because we had so many more choices.
But today our choices are very limited in industry after industry, and the gigantic corporate entities that dominate everything don’t really care if we like it or not.
We can do so much better than this, but in order to do so we must return to the values and principles that this nation was originally founded upon.
***
Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.
Michael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream.
If you want to know what is coming and what you can do to prepare, read his latest book [amazon text=Get Prepared Now!: Why A Great Crisis Is Coming & How You Can Survive It&asin=150522599X].
Capitalism cannot be competitive, if it is not in the hands of the individual to create capital.
Now, bubbles will usually expand and pop, based on some arbitrary subsidy and a grace period. Just measure the spaces between dips and crests.
Capitalism absolutely is by its nature competitive. Unfortunately we have crony-capitalism / fascism.
“Competition is a sin”
J.D. Rockefeller
Where do you believe that money is supposed to come from, ideally?
Something that fulfills the requirements of a standard. That was gold / silver but it could be something else that cannot significantly increase in supply to such a degree to not fulfill the requirements of a standard. Bank reserved need to be strictly regulated. Glass-Steagall in its 1935 form needs to be re-implemented.
. . .money is whatever the buyer and seller agree it to be. . .
It most emphatically does not come from government. Regardless of the fact that Aristotle asserted otherwise.
Well thanks you fookin walmart, amazon, card using troglodites!
Why doesn’t this writer do one big article entitled
America You’re Fooked
and run it once a week
The author is being somewhat mis-leading.
He is comparing industries that require lots of capital
eg. airlines to mom and pop stores.
Why is there basically only two world class large aircraft producers? Because it cost billions to develop, manufacture, and
support the safest world traveling machinery in existence. So the product costs a lot of money and small airlines can’t afford those costs.
Corporate automated farms can feed far more people, with far less labor, land, and cheaper than any old style family run farm.
It is the economy of scale, we have a lot of people, with needs, those needs cannot be served economically in every case, and I emphasize EVERY case by the mom and pop industries.
I like micro-brews, but I don’t make much money, and can’t pay $12 for a six pack, so I’ll find the best mass produced brewski as a staple @ $9 a half rack(12), and save the micro brew for special occasions.
(Hawaii prices, we drink lots of beer here).
That is what is missing from the analysis, is the final costs.
All things being equal most people will suffer with a cheaper product. If I could upgrade to a more desirable product for a 15% increase in cost I may consider it, but at a 250% increase in cost NO!
That is capitalism in practice.
Well yes there are certain things that require the size you talk about. But I shop at a locally owned Ace hardware, I shop at locally owned grocery stores, I drink locally brewed beer (mostly), I shop farmers markets, I never shop walmart (unless its something I need in an emergency and no one else has it), I never shop amazon, I buy take out food from local biz, I shop local health food store, I donate to local pet shelters, I volunteer as a local wildland firefighter, I do everything I can to spend my currency locally! I don’t give a damn if it cost me a little more, and I don’t support any company that is communist (that I am aware of) if given a choice. I buy american made when I have a choice. I support the underdogs….
I farm for a living and j whole heartedly disagree on the efficiency of the current reajectoey of agriculture. Farming is much more sustainable, safe, and productive on a smaller scale. I see where things are going in rural America and it scares me to death. On our current path individuals won’t be able to produce food, procure water, and that will make us much easier to control
Capitalism works for rich folks. Socialism works for poor folks. By not sharing the $ with the poor the rich are killing the golden goose and ushering in the demise of capitalism which has made them rich. Ultimately we will be all wards of the state.
Socialism would be ok if the politicians didnt try to attach all kinds of sicko agendas to it
Your ignorance is showing.
Socialism creates poor folks, as is currently being demonstrated in places like Venezuela.
That’s because Socialism is based on taking away from those who create wealth by producing and giving it to those who do not, destroying all incentive to be in the creating class.
Tell that to the poor in Venezuela asshat.
At least you’re named right.
“Socialism works for poor folks”
Only in theory. Small, affluent countries like Sweden are exceptions precisely because they enjoy ‘hothouse conditions’ of modest population and substantial wealth; on a large scale, socialism usually devolves into communism — and with it, horrific purges such as those enacted by Stalin, Mao, Castro, etc.
Then, after all assets have been confiscated and squandered, the remaining poor are mired in a permanent nightmare of grinding poverty and semi-starvation; with no way to escape except by attempting to join the military or bureaucratic ranks of the overlords.
Anyone who truly believes that “socialism works for poor folks” needs to brush up on the lessons of history.
The Nordic Countries have Welfare States, not Socialism.
They have had (until recently) homogeneous populations with agreed upon shared values and have voluntarily voted to impose Taxes on themselves to support their Welfare policies. [ ‘Free’ Healthcare, Childcare, Education K- College, etc.]
They are not Socialist in the sense that the Gov owns the “means of production” or centrally plans all their economies.
You can still start a business in Scandinavia and prosper.
However, I won’t deny that they are Socialistic in their mindset.
Sweden, at one point in their history, had a greater than 100% income tax on amounts over X dollars which meant that if you earned say $101,000 per year they would take the whole extra $1000 and then a penalty. Clearly this is against Free Enterprise ideas.
At that time anyone in Sweden who generated a large income (like a sports or entertainment figure) would become an ex-pat for tax reasons. I don’t know if they still do it.
But their key (similar to Japan) is that most everybody shares the same values and they are OK with implementing policies that are good for the ‘herd’ over the individual.
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The indigenous Northern Europeans don’t “game the system”. Social pressure / culture allows them the luxury of a welfare state. The importation of people, largely W/O skills and certainly of foreign culture will be the end of their cradle to gave social / economic protections. Saying this is deemed racist, experiencing it is realist.
Oh really? Do you know the net worth of Nancy Pelosi? Many democrats are the uber wealthy. How’s that working out for you, sucker?
Doesn’t make any real difference to me. I’ve bought cars for cash from private owners for my whole life and still do so even today. That’s all that my income allows me to do. Craigslist is the poor peoples’ car market. Credit is for rich people. I’m just getting to where I don’t give a shit anymore.
I have tried to give a shit before… nobody wanted it!
Paradise fire in California is worse than reports.
Over a thousand people dead or missing?
Chem trails of various cobustable elements with laser and 5G frequencies targeting homes and people the elite want eliminated. Mass murder and genocide which they thought they would blame on creatures from outer space. People are stupid but there’s a limit even to stupidity and gullibility. The trees were burning at the top like torches because that’s where most of the stuff lands when it falls from a chemtrail.
__ Agenda 21
___ Agenda 30
____Agenda 50
_ That’s Communism!! Wake Up, that’s Communism!!
_
Free enterprise will never be restored by white collar parasites with an ‘R’ or ‘D’ after their name. Why do liberty-loving Americans cling to the group-think delusion that we can use an evil system to fix evil?
The truth is that most people do not care or pay attention to much of anything anymore except the routines of their daily lives and getting by.
Capitalism keeps being exposed for what it is, but American taxpayer dollars are still being confiscated to forcibly buy the worthless, piece of crap car products of bailed-out American car companies.
GM was right when it said back in the 1960s how Americans would buy the cars GM told them to.
So much for voting with your pocketbooks. Bailouts prove (once again), how if voting really mattered they wouldn’t let us do it.
Ironic isn’t it.
Capitalists eventually absorbing one another after having absorbed everything else is one of Marx’s predictions in his talks on the primitive accumulation of capital which opposed Smith’s.
So does Marx seem to be the one turning out right, or does Smith seem more likely to be?
What do you think acquisitions are? We don’t have capitalism but international megacorporations as monopolies. Hollywood films are financed by China.
Pure capitalism within the 50 states of the USA is a good idea but international trade harms our citizens. Or 1945-1990 paradigm through industry causing a robst middle class that owned property and supported the domestic economy…
…was crushed by globalism and free trade.
Factories shuttered from 1990-present day and the service economy and green jobs never materialized.
Your children will be poorer than you. That is America’s future. The globalists concentrated wealth by stealing it from the middle class. They want a new aristocracy. That is the Illuminati’s goal.
What did all humans use for most trade across the last 12,000 years? BARTER and an exchange of labor. They didn’t have coin. They used coin to make weath portable. Your best way to cope when the SHTF is barter.
You convert to coin and it can be taxed.
Genghis Khan and the Templars began the idea of checking. Organized credit across Western Civilization began with the Rothschilds.
Smith is correct and American history proves it. Once again we are subjected to Michael Snyder’s ignorant drivel.
What passes for Capitalism in America today is the direct result of government meddling, regulations, mandates, etc.
Go to Eric Peters Auto website and read about the destruction of the American car industry because of government mandates.
ht tps://www.ericpetersautos.com/2018/11/29/the-great-winnowing/
The big three are essentially stopping the production of sedans. Withing a few years all the cars in America will look the same with no significant differences. All because of government mandates. Welcome to the USSR comrade.
We have not had Capitalism in America for 40 years and Snyder is an imbecile.
Interesting that Mr. Snyder fails to mention the Great Satan, Jeff Bezos and his outfit, Amazon.
Also interesting that his book is for sale at, yeah, you guessed it, Amazon.
Mr. Snyder hating on the big corporations while selling his garbage on the biggest piece of shit corporation.
Mr. Snyder, why don’t you put your money where you’re hypocritical mouth is and boycott Amazon???
That’ll be the day.