![]() Instead, we employ it as it has often been used in economics to refer to firms with sufficient market power to influence the price, output, and investment of an industry-thus exercising “monopoly power”-and to limit new competitors entering the industry, even if there are high profits. Monopoly in this sense is practically nonexistent. When we use the term “monopoly,” we do not use it in the very restrictive sense to refer to a market with a single seller. We explain why understanding competition and monopoly has been such a bedeviling process, by examining the “ambiguity of competition.” In particular, we review how the now dominant neoliberal strand of economics reconciled itself to monopoly and became its mightiest champion, despite its worldview-in theory-being based on a religious devotion to the genius of economically competitive markets. In this review, we assess the state of competition and monopoly in the contemporary capitalist economy-empirically, theoretically, and historically. corporations are sitting on around $2 trillion in cash-the issue of monopoly power naturally returns to the surface. With the United States and most of the world economy (notwithstanding the economic rise of Asia) stuck in an era of secular stagnation and crisis unlike anything seen since the 1930s-while U.S. Hence, monopoly can be a strong force contributing to economic stagnation, everything else being equal. Under competitive conditions, investment will, as a rule, be greater than under conditions of monopoly, where the dominant firms generally seek to slow down and carefully regulate the expansion of output and investment so as to maintain high prices and profit margins-and have considerable power to do so. Both of these core claims for capitalism are demolished if monopoly, rather than competition, is the rule.įor all economists, mainstream and left, the assumption of competitive markets being the order of the day also has a striking impact on how growth is assessed in capitalist economies. The political defense of capitalism is that economic power is diffuse and cannot be aggregated in such a manner as to have undue influence over the democratic state. The economic defense of capitalism is premised on the ubiquity of competitive markets, providing for the rational allocation of scarce resources and justifying the existing distribution of incomes. This is anything but an academic concern. In short, monopoly power is ascendant as never before. ![]() ![]() Formerly competitive sectors like retail are now the province of enormous monopolistic chains, massive economic fortunes are being assembled into the hands of a few mega-billionaires sitting atop vast empires, and the new firms and industries spawned by the digital revolution have quickly gravitated to monopoly status. On the other hand, wherever one looks, it seems that nearly every industry is concentrated into fewer and fewer hands. It is a matter so self-evident as no longer to require empirical verification or scholarly examination. On the one hand, mainstream economics and much of left economics discuss our era as one of intense and increased competition among businesses, now on a global scale. ![]() This is a chapter from Foster and McChesney’s Monopoly-Finance Capital: Politics in an Era of Economic Stagnation and Social Decline, forthcoming next year from Monthly Review Press.Ī striking paradox animates political economy in our times. Jamil Jonna is a doctoral candidate in sociology at the University of Oregon. McChesney (rwmcches ) is Gutgsell Endowed Professor of Communication at the University of Illinois at Urbana-Champaign. John Bellamy Foster (jfoster ) is editor of Monthly Review and professor of sociology at the University of Oregon. Topics: Economic Crisis Economic Theory Political Economy Stagnation
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