Understanding Monopolies and Their adverse effects on our Economy. Protecting our food supplies.

Source

Threats to Democracy

The greatest threats to democracy are:

  • monopolies,
  • huge corporations,
  • conglomerations without regulations, limits, or rules.

If left unchecked they will totally destroy our economy.

In truth, they already are destroying our economy.


Monopolies are not our friends

the wealthy capturing businesses with their nets of cash
the wealthy capturing businesses with their nets of cash
The large fish eating up all the smaller ones
The large fish eating up all the smaller ones
cornering the housing market - a recipe for corruption and disaster
cornering the housing market - a recipe for corruption and disaster | Source

The Theory behind how Monopolies 'should' work

Monopolistic Competition defined:

A market situation in which there may be many independent buyers and many independent sellers; but in which competition is imperfect for several reasons:

  • production differentiations
  • geographical fragmentation of the market
  • other similar conditions including market need, desire, practical product, customer service, or usages

This theory was developed independently by both U.S. economist Edward Hasting Chamberlain in his "Theory of Monopolistic Competition" (1933) and by the British economist Joan Robinson in her "Economics of Imperfect Competition" (1933).

Their theories took into account different scenarios in which each seller carries goods that have some unique properties in the eyes of the consumers, such as: brand names, special ingredients, customer service, geographical desirability, need, desire, or practical usage.

These unique properties would therefore imply that each seller has a "Partial Monopoly".

They also analyzed:

  • 1. "Oligopoly": which is characterized by an industry composed of a smaller number of large firms
  • 2. "Discriminating Monopoly": in which a given item is sold at different prices to different customers.
  • 3. "Monopsony": in which there is a single (monopolistic) buyer of goods produced by many suppliers.

Because the bulk of business in developed capitalistic economics is conducted under condition of product differentiation (oligopoly) the enthusiasm with which their analysis was received was understandable.

The Two Major Types

1. ABSOLUTE MONOPOLY:

The exclusive possession of a market by a supplier of a product, or a service, for which there is no substitute.

Here the supplier is able to determine the price of his product without fear of competition from other sources of his, or substitute products.

It is generally assumed he will choose a price that maximizes his profits).

2. PERFECT COMPETITION:

The exact opposite of absolute monopoly. This exists when there are large numbers of sellers and buyers of a homogeneous (similar kind) of commodity.

Each seller accounts for a relatively small share of the market. He cannot, therefor, influence the market price by varying his output, and he cannot increase his price above the market price because buyers would shift to other producers.

Although absolute monopoly and/or perfect competition are useful for illustrative purposes, they are seldom, if ever, seen in reality - where actual conditions range from one extreme to the other.

In common usage of the term "monopoly" it is often used to signify a state of which the degree of competition is restricted (but still present) whereas the term "competition" is used to denote a state in which competition is less restricted (but still not perfect).

The dividing line between the two is a question of definition by those who would argue for, or against, one extreme or the other.

In British anti monopoly legislation, according to which, a monopoly exists if at least 1/3 of the supply of a particular product, or service, is controlled by one enterprise, or by several enterprises acting in concert, with the intent of restricting competition.

Oligopolists often tend to act in concert, or when permitted, by law, to form cartels with formal agreements and prices and supplies - leading of course to that current state of our economy of being "too big to fail".

Those proponents in favor of monopolies give somewhat compelling, although unrealistic, reasons to justify their existence - all designed to leave that open end loophole to greed, power, control and unrestricted accumulation of personal wealth by exploiting others and the very system itself.

They attempt to justify their stance by the following arguments:

  • their false concern with the efficiency of scale in production
  • integrated operations
  • asserting that efficiency is raised
  • production cost are reduced
  • avoiding wasteful competition
  • eliminating excess market capacity
  • making for more meaningful long term planning
  • rational investment and developmental decisions

Those proponents against these corporate allegations are the arguments that:

  • because of its power over the market place - the monopoly is likely to exploit the consumer.
  • they restrict production and variety
  • they charge higher prices in order to extract excess profits
  • the lack of competition may well work against efficiency and lowering production costs; with the result that the factor of production costs are not used in the most economical, safe, or eco friendly manner.

One of the main principles of free enterprise economic philosophies is that monopolies are, as a general rule, "undesirable" and "need to be strictly controlled".

Failed attempts to control as planned

Most free enterprise economic systems have an elaborate framework of laws and regulations aimed at controlling monopolies.

The oldest and the most vigorous monopoly control legislature is represented in the U.S. Anti Trust Laws consisting primarily of the Sherman Act, the Clayton Anti Trust Act, the Celler-Kefauver Act, and the Federal Trade Commission Act.

All of which the GOP has tirelessly, and relentlessly fought to have overturned in order to provide their benefactors with greater control over the markets. This comment is not meant to be derogatory against one party or the other, as it is common knowledge that the GOP represents business enterprise before people, and the Democratic party represents (or used to represent) the people before business enterprises.

These Anti Trust Acts are (were) aimed at preventing agreements among suppliers (the effect of which would be to limit competition) and at preventing mergers between, and acquisitions by and of, firms (the result of which would be to lessen competition, or to create a monopoly).

These anti trust acts were "modified" several times to lessen the impact of government to limit and/or control the very thing that our government passed those laws for ----

--- to prevent Great monopolies that control everything.

It would take a dozen lawyers to give an accurate account of what is remaining of those anti trust acts - and then there would be a dozen interpretations of exactly what those "modifications" legally mean. But, i can assure you with much confidence that those meaning would most certainly favor corporate America and not the American people.

The only conclusion I can come to is that all those "modifications" and "amendments" have had specific purposes in mind:

  • to lessen the restraints put on "monopolies"
  • to grant corporations and conglomerates more independence at self control
  • to minimize the power of government to stop these from happening
  • to minimize the penalties to no more than a slap on the wrist
  • and worst of all, to protect them all (corporations, their leaders, and political flunkies) from any blame or harm done in the past, the present or in the future.

This move toward legal protection started its proliferation in full force with the Reagan Administration and has further progressed with each administration after him.

Both parties are equally to blame for these atrocities against the public and they remain protected, under their own laws that were passed without public knowledge, or disclosure; behind closed doors and designed specifically to do just that - to protect themselves.

We must NEVER allow monopolies to evolve to the degree that Corporate America is fighting so hard to attain via their (republican) political party. Their victory would prove to be even more disastrous than already is, and put a total end to our society as we have always known it; and fulfill the dream of those few in power to have absolute power and control over the lives, destinies, livelihoods, finances, freedoms and all that is good and just in this world.

It would lead to the complete control of our cosmos by that catastrophic, cataclysmic, cacophony of corruption at its climax.

by d.william 12/20/2011

Monopoly corruption at its worst in today's world

Here is a perfect example of how corrupted monopolies have become.

This is an email that everyone should read:

Dear dee:

Monsanto and their friends just broke a record.

But it's not the New York marathon -- it's the record for most money spent on an initiative in Washington state's history. [1]

That's how scared they are of labeling -- not banning, just labeling -- their GMO food. What are they hiding?

Americans like outlaw star Willie Nelson are sick of it. Willie, a long-time friend to both family farmers and progressive causes, is just one of millions of citizens raising his voice.

That's why the tide is turning. Just last month, you helped defeat the deceptive Monsanto Protection Act in Congress. And while Monsanto may have squeaked out a win in Washington state, an initiative is already planned for Oregon next.

States throughout the northeast, from New York to Maine, are also considering GMO legislation. Folks across the country are learning about GMOs and they don't like what they're hearing.

Monsanto can't buy us out. Together, we can get the truth out there and bring more support to the fight for our food!

Share this inspiring message from Willie Nelson and invite more people to join the fight for our food!

From great songs like "On the Road Again" to his pioneering work on behalf of family farmers with Farm Aid, everyone can agree that Willie is an American icon.

With your help and an inspiring message from the Red Headed Stranger, we can get people's attention and let them know the truth about GMOs. Together, we can grow the movement for a future where our food is grown by farmers, not in a laboratory!

Will you spread the word to your friends and family by sharing this great image? Monsanto might be able to drop millions, but we have something better -- you.

In it together,

Ashley Allison
SierraRise Senior Campaigner


[1] Le, Phuong (2013 October 29). "Record-breaking sums of money pour into state's food labeling fight."KOMONews.com.

I Owe My Soul to the Company Store !! Will This Be Our New (old) National Anthem?

More by this Author


Comments 10 comments

Pcunix profile image

Pcunix 4 years ago from SE MA

Although I have no idea how you could ever do this, limiting the size that corporations can grow to would allow small competitors to enter their markets.

One thought I have had is to force them to either distribute extreme earnings to shareholders or be taxed on them. Of course that has downsides too, but we need to do something to encourage small business.

I don't have good solutions, but I do know where the problems are.


d.william profile image

d.william 4 years ago from Somewhere in the south Author

http://hubpages.com/@pcunix

Thanks for reading and commenting. There are already (or were) laws that governed that very premise - Limiting the size and scope of monopolies. Then the politicians decided that taking bribes from Corporate America was more important that protecting the interest of the people, and those laws were chipped away to mean little or nothing. They need to be strengthened and reinforced with greater penalties. There is no reason why people at the tops of large corporations should be allowed to take all profits out of our economy and move them to their own personal bank accounts at the expense of employees being stripped of their rights, benefits and dignity. Especially without being taxed or any other penalty. Our world should be a co-op, not designed for the raping by a few select individuals.


Pcunix profile image

Pcunix 4 years ago from SE MA

I mean limit all corporation's growth - long before they are in danger of becoming monopolies.


d.william profile image

d.william 4 years ago from Somewhere in the south Author

http://hubpages.com/@pcunix

Yes, i believe those guidelines and regulations should be set into place to prevent new monopolies from developing as well as dismantling those already in existence. This concept of breaking up monopolies is not a new one, it was done many years ago before the deregulating frenzy became so popular in our society.


always exploring profile image

always exploring 4 years ago from Southern Illinois

Dee, It looks like the monopolies are still going strong in my town. I have Direct TV and wanted what they called a bundle, which included my Computer and telephone. Direct informed me that they were unable to give me the service due to our local telephone companies policy. This infuriates me. I don't think i can do anything about it.....


d.william profile image

d.william 4 years ago from Somewhere in the south Author

http://hubpages.com/@alwaysexploring

Thanks for reading and commenting.

I think the only one that Direct TV bundles with is AT&T. That is who i have mine bundled with in this area. And i had no choice in the matter. If i did not have AT&T i could not have gotten the bundle deal either.


Credence2 profile image

Credence2 4 years ago from Florida (Space Coast)

D. You are too kind, the GOP are responsible for the state of current affairs, for as you mentioned their interest were not so much for free and fair markets but for allowing a few to considate wealth unfairly at the expense of the many. The meltdown of September, 2008 is directly attributed to this philosophy which they have been quietly persuing for decades.

In regard to your graph, it is interesting how the right with Faux News manage to virtually make Obama the inventor of the national debt and deficit spending.

I am not terribly fond of this group, this is one of the reasons. Free people being gradually reduced to slaves out of economic necessity, that is their real agenda. But heavens, that could never be allowed into public knowledge, Great Article, thanks Cred2


d.william profile image

d.william 4 years ago from Somewhere in the south Author

http://hubpages.com/@credence2

Thanks for your supportive comments. I usually have several pro business commenters on this type of article, but i guess when the facts are presented properly there is not much to write about other than opinions and the same old tired rhetoric that the GOP spins against Obama and the current government administration instead of offering solutions, or constructive criticism.

Taking away more regulations certainly will NEVER make those "corporate" job creators do any 'creating', they certainly have done none in view of those tax cuts that they have had now for several years. And there is no reason to believe they will be doing any 'job creating' in the near future.


Terri Meredith profile image

Terri Meredith 4 years ago from Pennsylvania

Good job with clarifying terms and definitions. There are many out there who don't understand the reasons for deterring corporations from building a monopoly. In my own small town, we had several funeral home directors. When a new guy came to town, they welcomed him with open arms. The minute they discovered he was charging 40% less than they, the others tried to have him blocked from local professional organizations. They went so far as to "sit him down for a talking". He refused to go along with their price fixing, stating that he makes a very good living with what he charges and will not rob those in a time of grief and loss. Considering that the average cost of a funeral WITHOUT cemetery charges or markers is between $7,700 and $8,000...people are being gauged to the tune of $3000+ more than necessary. Corruption and greed are everywhere, even with the little guys.


d.william profile image

d.william 4 years ago from Somewhere in the south Author

http://hubpages.com/@terrimeredith

Thank you for reading and commenting. I apologize for the lapse in time since your comments were posted. Your example is a good one for the way things are today. I have noticed recently how much everything is going up in price while wages remain stagnant or going down.

It truly amazes me that in this time of crisis in our economy that businesses take advantage of people for the sheer purpose of making larger profits.

I am no economy expert, but i can't understand how "fixing" our broken economy can be accomplished by raising prices? And in states like Maine when the radical tea party governor can unilaterally abolish unions, and the minimum wage law, so businesses can make bigger profits.

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article
    working