February 2013        

More on monopolies globally


Socialist Voice over the last few years has tried to refute the myth of a highly competitive capitalist system that innovates to create jobs and passes cost reductions on to consumers, exposing it as a highly monopolised system in which production, wealth and ultimately power increasingly reside in the hands of fewer and fewer companies, institutions and individuals, with grave consequences for working people in employment, democracy and the environment and for humanity.
      The fact that this is a monopoly system matters both in analysing the crisis today and in seeking to expose the weaknesses of the system and to present an ideological challenge to it, rather than promoting the restoration of growth and profitability—i.e. saving capitalism—as many on the “left” appear to be doing.
      Monopoly capitalism is driving the pauperisation of working people in a global race to the bottom as production becomes highly internationalised and automated. The concentration of wealth under monopoly capitalism has increased the political power and control of a tiny global elite, to the detriment of national democracies. It has consistently prevented any serious or significant steps being taken to redress environmental destruction, as the largest polluters are those that profit from its destruction. It is driving peasant communities off the land, creating horrendous slums and unemployment, as land is increasingly monopolised for single-commodity production.
      The anarchy of production and the increasing disconnection between production and consumption create global instability and almost constant overproduction. The growth of finance as an outlet for surplus accumulated capital, and the high concentration of this capital in the hands of a few players, adds to this instability and gives rise to speculative bubbles that grossly distort and ultimately destroy local economies.
      Billions starve while food is dumped. Billions stand idle where teachers and nurses are needed. Hundreds of millions are homeless while vacant houses are boarded up. Hundreds of millions die from preventable disease while medicines are withheld.
      This is monopoly capitalism today: disgusting and wasteful, serving the needs of only a few.
      Let’s take a look at a selection of global sectors and who the controlling powers are.
      In the world of news and information, the largest companies are GE, News Corp., Disney, Viacom, Time-Warner, and CBS, which control about 90 per cent of the market in the United States. News Corp. owns the biggest-selling newspapers in three continents, but they maintain their separate brands to provide the illusion of choice. So, for example, GE owns Comcast, NBC, Universal Pictures, and Focus Features; News Corp. owns Fox, the Wall Street Journal, the New York Times and, closer to home, the Times (London) and the Sun. It also has a large shareholding in BSkyB and is attempting to purchase Sky’s sports “rival,” ESPN.
      Disney owns ABC, Miramax, Pixar, and Marvel. Viacom owns MTV, Nick Jnr, CMT, and Paramount. Time-Warner owns CNN, HBO, Time, and Warner Brothers. CBS owns NFL.com, Smithsonian, Showtime, 60 Minutes, and Jeopardy.
      In Ireland, of course, we have Independent News and Media, controlled by the O’Reilly family and Denis O’Brien, which owns the Evening Herald, Irish Independent, Sunday Independent, Sunday World, and Irish Daily Star, as well as fourteen regional titles.
      Denis O’Brien’s Communicorp Group also owns Today FM and 98FM, Newstalk, Spin 1038, and Spin South-West, as well as about forty other radio stations in Europe.
      In accountancy in the late 1980s there were about eight global firms; by 2002, and following the collapse of Arthur Anderson as part of the fall-out of the Enron “creative accountancy” fraud, this has been reduced to four. The “Big four,” as they are called, are Ernst and Young, KPMG, Price-Waterhouse Cooper, and Deloitte. Their combined income grew from $89 billion in 2007 to $103 billion in 2011.
      Tobacco production is dominated by China National Tobacco, Philip Morris International, and British-American Tobacco, whose combined market share is about 70 per cent of global production. The four “ABCD” firms—ADM, Bunge, Cargill, and Louis Dreyfus—dominate the global trade in grain, along with the global commodities trader Glencore and the Marubeni group. Together they account for about 90 per cent of the world’s grain trade.
      In the area of new technology the smartphone market is dominated by two companies, with 85 per cent of sales in 2012 going to Android (Google) and iOS (Apple).
      It is rarely that these companies are ever penalised for monopoly practices, such as price-fixing and agreed division of markets, which they engage in constantly; but sometimes they are caught out and token fines are imposed. The technology companies Philips, LG and Panasonic were fined about €1½ billion by the EU Commission for engaging in a ten-year cartel, with regular meetings between the companies to agree prices in the region of 60 per cent above market value. Microsoft reached an out-of-court settlement with the US government for monopoly practices, including taking advantage of its near-monopoly position and price-fixing; it faced similar charges in the EU and was fined for it. Naturally, American politicians jumped to its defence, describing it as an assault by Europeon successful American businesses.
      American Movil, the biggest mobile network in Latin America, was fined $1 billion in a Mexican court for price-fixing on call charges. And Intel was fined $1½ billion by the EU for blocking tactics used in trying to destroy a smaller competitor.
      These are only some of the few successful cases, where the abuse is so outrageous that the authorities must act. But the practices are systemic and part of monopoly production and accumulation, particularly as the same companies struggle to find new avenues of growth, with ripping off existing consumers in new and clever ways the easier growth strategy.
[NL]

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