Recently I was asked in my law class to analyze this statement:
The strategy of the Sherman Anti-Trust Act and other U.S. anti-monopoly legislation is to ensure that each company has meaningful competitors in every product market in which it participates. This strategy works to prevent monopoly pricing of products but, unfortunately, it is inadequate to prevent the development of quasi-political control of entire societies by oligopolies whose member corporations share a quasi-political agenda. Therefore, as the world becomes a single market, some new strategy must be developed to control the reach of the corporate oligopolies.
My response was a bit long winded and took a while to circle back to the original question but I think explained my opinion as thoroughly as possible. Here it is:
It’s my opinion that this is a symptom of the spread of capitalism across the world. I like to look at this from an evolutionary standpoint. We can think of capitalism as an organism or rather the capitalist economies of the world as a species. As the species gains in dominance of the food chain that is the world economy, it has less need to compete with others. Eventually the weaker economic organisms that it preys upon dwindle in numbers and the population of capitalist economies reaches a critical mass. They run out of their given prey and must begin to feed on each other to sustain themselves. This would represent war profiteering.
This eventually results in a stalemate as the strongest economies in the world consolidate their wealth. Eventually they form a symbiotic relationship and feed off each other at a rate that maintains them all at nominal levels. Within the economies, the corporations that form and control these organisms require, by their capitalist nature to continue to grow. The plateau effect on their escalating force has stagnated this growth but too much aggressive action may destabilize the world economy. So they take minor actions where they can to reach the ultimate goal of any capitalist organism, be the alpha.
I am not insinuating that capitalism itself is evil or even greed driven. I am also not alluding to some global conspiracy by a cabal of bankers. I am stating that it is my opinion that through the actions of the richest and most powerful of our species, economic organisms have been created and function on their own.
I think that our economic issues themselves represent a function of human societies and cultures. We are consumed by consumption. I am not saying that consumption in and of itself is the problem, but consumption without production is.
What can be done about it?
I do not think that any particular form of regulation or political action can resolve this, short of completely reshaping the economies of the world and refocusing the goals of the human species. These issues are greater than simple economics. The economics again, only represent a symptom of a greater issue.
I am not entirely convinced that this would be possible as the ‘quasi-political’ corporate entities have such an interest in legislation in their respective markets that they would react as any animal in the wild would to defend its position in its local food chain. It would lash out in fear and confusion.
I do not think the situation hopeless, but I think that a resolution is unlikely based on human history. This may even simply be an inevitability of any species that reaches true dominance of an ecosystem. Life only functions to beget more life, irrespective of whether its rampant consumption may leave it with no ecosystem to survive in.
I’ve already completed the assignment by submitting my response so I’m not looking for help with my homework here. :) I’m genuinely interested in having as clear a picture of the world as possible and this is a subject where I can only draw conjecture as I am not an economist.Â
I’d like anyone interested to give me your opinion. Am I wrong? Right? Is my assessment flawed? If so, how?
Leland Flynn says
Hey Fas & Ben! Thanks for the input here! As I’ve said this is all my own personal speculation and I’m using evolution as my vehicle because it’s the easiest method I have for describing how I see these issues. What do you guys think about my assessment? Am I off base here or do you think I have a fair grasp of how our world economy functions? Do you guys have any thoughts on how we could maybe back out of what looks to be an inevitable crash?
We can very well talk about the pareto principle here. 80% of the problems have been caused by 20% nations (U.S) included.
Benjamin J. Roethig says
You also have a couple other things at play.
1) corporate day-trader mentality. Living from fiscal quarter to fiscal quarter rather than considering long term growth.
2) Complete reversal of role of china and the third world from importer to exporter to the third world. The economic wealth of places like China has grown considerably while the US, Europe, and Japan have gown through recessions. While it may look good on a corporate earnings sheet and those cheap Wal-Mart goods may look great to your home budget, the loss of manufacturing (and now service industry) jobs has an eventual negative effect on a nation’s economic power.