A new book calls for a series of cartel-busting and giant-regulating steps that could restore economic welfare and vitality
The vast and intrusive power of near-monopolies like Google, Facebook, Amazon and Apple has drawn much hostility from consumer advocates in recent years.
But the digital giants are just the newest form of crippling monopolies, monopsonies, duopolies and oligarchies that are strangling western economies, according to writer and analyst Jonathan Tepper.
And the situation in agriculture, with extreme corporate concentration in life sciences, brewing, railroads, meat-packing and grocery industries leaves farmers as severely subject to corporate fleecing as they were in the early 20th century, he maintains.
“The pattern of a big company dictating terms to farmers is growing,” said Tepper in his just-published book The Myth of Capitalism: Monopolies and the Death of Competition.
“The impact of collusion and corporations not stepping on each other’s turf has meant the ruin of farmers.”
Tepper is a harsh critic of concentrated corporate ownership and those who defend its existence. He and co-author Denise Hearn argue that in most industries the greatest problem is with oligarchies, which are tiny groups of giant players that dominate their industries and have a vested interest in not truly competing. Those players benefit from carving up the market so each gets its own part of the market and then squeezing captive customers for fat margins.
While not focusing on farming, Tepper frequently cites agriculture in his discussion of modern threats to competition and consumer-citizen welfare. He describes a meatpacking industry that has vast powers in local markets, and grocery chains that virtually control many regional markets in North America.
The fast-concentrating seed/chemicals business is another example of the grave situation faced by farmers.
“Some industries are shaped like an hourglass with millions of producers at one end and hundreds of millions of consumers at the other end, connected through a few large companies,” writes Tepper.
“This is true for agriculture in particular.”
Tepper is not a socialist or anti-capitalist. He is an avowed champion of capitalism but accuses many of those who claim to be capitalists of being instead simply shills for big business and vested interests, rather than the open, competitive, unprotected marketplace true capitalism needs to provide.
“Conservatives and true capitalists must remember that entrenched monopolies and oligopolies do not represent the triumph of free-market capitalism but rather its corruption. Open competition is the essence of free markets, and competition requires reasonable regulation.”
Tepper’s book is not a balanced, dull, on-the-other-hand style of economic tome, but a stirring call to arms against the corporate concentration that he sees behind today’s plight of the middle and working classes.
In its conclusion, he calls for a series of cartel-busting and giant-regulating steps that he thinks could return economic welfare and vitality to western economies.
He says governments should prevent mergers that shrink the number of competitors in already-concentrated industries, and even break up some mergers that have been allowed.
He calls for a “six-player” rule that would stop mergers from creating super-concentration that presently exists in many industries, such as a number of agriculture sectors.
And he urges governments to take control of antitrust policy away from economists, who often miss the point and fail to see the greater dangers of extreme concentration, and sometimes are in the pay of the interests they are supposed to be analyzing.
“Economics is not a science and it is not equipped to answer what values we want to promote or how we want to organize our society,” writes Tepper.
“Not every theory or fad in economics has been correct, and we cannot entrust our economy to professors for hire who bear no consequences for their decisions.”