Amazon’s takeover of Whole Foods has raised alarms about economic concentration. No corporation epitomizes monopoly better than Amazon, who’s business model is predicated on losing money with their super-low prices in order to capture market share. Their dominant position then allows them to chose how to extract more profit, which is usually a combination of squeezing suppliers and raising prices. There’s also a long term strategy: The reason investors are pumping cash into Amazon is so that it can grow so big that eventually it will control enough market share to jack up prices and make a killing.
Even neoliberal publications are starting to take notice of the economic concentration represented by corporations such as Google, Facebook and Amazon. “A report by The Economist found that two-thirds of the U.S. economy became more concentrated between 1997 and 2012, and dominant companies are using their growing control to squeeze cash from customers. However, since the 2008 financial crisis, U.S. markets have become anything but free. Mergers worth $10 trillion have reduced consumer choices. Domestic profits are at record highs, competition has plummeted and the rate of small-business creation is close to its 1970s-era nadir. The problem is worst in the tech sector. Facebook and Google each control at least 40 percent of their markets.”
These high-tech monopolists, based out of Silicon Valley, are largely represented by the Democratic Party, and their rise has been nourished and cheered on by recent Democratic presidents–Bill Clinton and Barak Obama. This political/economy is part of a larger phenomenon that writer Thomas Frank has detailed in Listen Liberal, where the Democratic Party abandoned labor and embraced affluent white collar professionals who’ve been the big winners in our milieu.
The only problem with the Democrats strategy of assuming that workers and labor had no here else to turn in our duopoly is this guy that’s currently the president. Maybe you’ve heard of him?
In the process of abandoning labor and workers, the Democrats have turned away from promoting economic fairness. This political transformation has separated the Democratic party from it’s historical appeal and in the process handed the issue to Trump, who based his populist campaign on disgust with the status quo. The Democratic Party used to see itself as standing up for the common man and promoting economic fairness as part of the concept of political freedom. Now they’re reduced to throwing crumbs at the Americans who’ve been left behind by their “New Economy”, while describing them as “deplorable”.
If the Democrats were not so beholden to their wealthy benefactors they would have a ready made campaign, that would resonate with down-trodden Americans. After all, you’re not free if a giant corporation controls what you can buy, what you can read or even what you can think.
Political and economic writer, Matt Stoller makes an important point that bears repeating. “The Democratic Party was founded on the premise that citizens can self-govern, that the rich or educated aren’t better or more virtuous. The point of politics is for ordinary citizens to protect and preserve their political liberties. As William Findley, a Revolutionary-era Congressman, put it, “Wealth in many hands is many checks.” Most Democrats do not take this seriously; they certainly do not act on it. They think the agenda is to tax the wealthy and redistribute their wealth through social programs, or compel corporations to pay workers more, rather than taking on the historic concentrations of corporate power already corrupting our democracy at the root.”
Libertarians see the government only as capable of vast oppression, but that’s not the world we live in. American corporations, through their capture of the US government, have emerged as the new oppressor, with a control over our lives that would have shocked George Orwell, but maybe not Aldous Huxley.
Indeed, more and more of us are having our liberties crushed by this “Gov-Corp” behemoth. Small business owners, like myself, are burdened by costly regulations and taxes while mega-corporations are allowed to skirt them. New graduates are weighed down with student debts. Small farmers are driven out of business by meatpacking monopolists and seed and herbicide monopolists like Monsanto. We are all subjected to a for-profit healthcare system run by powerful health-insurance and pharmaceutical corporations.
What really pisses me off about this neofeudal arrangement is that the winners are described as “innovators”, when they’re just like the robber-barons of a century ago. Rent-seeking, monopoly, tax avoidance and regulation arbitrage are nothing new. The only thing that’s different is the Silicon Valley high-tech gloss, and the breathless hagiography of our corporate media.