Published: 29 January 2021
Guests: Michelle MeagherListen to Audio Download Transcript
One of capitalism’s central planks is that competition is king and creates a level playing field that champions only the best products, the most efficient services and the most effective people. Yet a cursory glance around the business world shows us that corporations don’t like competition.
They aggressively protect their monopolies, which stifles products, shrinks services and prevents personal accountability.
So what if this so-called competition is actually killing us?
Host, Ross Ashcroft, met up with Author and Lawyer, Michelle Meagher, to discuss.
One of the most apposite critiques of competition within advanced capitalist states was that made by the late-great, David Graeber, who would always say, if you’re going to take an argument on don’t ever attack the weakest case within a system. With this in mind, Michelle Meagher, took on capitalisms strongest case arguing that the free markets we’ve been sold on aren’t as competitive or as free as we’ve been told.
The power structures that accumulate within the system create the kind of monopolies antithetical to the competitive logic the system claims to uphold. The business plans of the tech companies illustrate how this uncompetitive ‘competition’ plays out. Instead of the internet spreading power which is how it was originally conceived, it’s activities are backed up by powerful lobbying interests which navigate aspects like tax laws, competition law and securities law to their own narrow advantage.
The purpose is to further consolidate power irrespective of the damage to wider society that such actions cause. Regulatory mechanisms designed to limit the societal and environmental damage by fracking, deforestation and the fight against inequality are all different symptoms of the same problem. Meagher says that problems are best resolved by a) uniting all of the various narratives, and b) by insisting that existing 100 year old laws are enforced by the regulators.
What the giant corporations who are able to wield competitive advantage and power are essentially doing, is sucking up resources and value into their own kind of tent. Meagher is unequivocal in her assessment that this power needs to be challenged in a root and branch way. The problem stems, not from competition per se, but rather, as a recent US Congress report reiterates, from unfair competition.
Meagher notes that an ideal version of competition is when companies compete with one another to provide the best possible service and the best goods at the lowest possible price. But this is not a practice corporations engage in. Rather than adhering to the textbook version, they seek monopolies, corner markets and push out their rivals.
At that point monopolies don’t have to have the best product anymore and they don’t have to charge the lowest price because there’s nobody else left to compete with them. They are also able to externalize environmentally and socially damaging costs off their balance sheets onto society. In this way, monopolies are able to offer a lower price because they haven’t actually paid for the full cost of their production.
What Meagher hopes to achieve with Competition Is Killing Us, is to challenge some of the myths that are embedded within this idea of free market capitalism:
“What I’m trying to do here is really expose that and show people that the system isn’t working, the regulatory system isn’t working, and we should be asking for more from our regulators”, says Meagher.
One piece of the puzzle that the lawyer didn’t appreciate to its full extent while writing the book, was the influence of the Chicago School of Economics over this whole narrative:
“At the beginning of the 20th century you had an enormous movement, a democratic movement, that was in the US that was moving against corporate power. So this is the context. And then you have the Great Depression, which really showed that capitalism doesn’t work.”
“We had this huge tide of socialism that was going around the world. And what they really wanted to show was that corporate power was something that we shouldn’t take any sight of, that actually, once you have completely free market competition, everything else sorts itself out. They spread this idea that a monopoly is temporary, that if a company, by sheer luck and innovation, manages to become the most prominent company in the market, the next day they’re going to be competing.”
So with capitalism in retreat, the opportunity was set for the masses to be persuaded that monopoly capitalism would be a temporary blip on the pathway to wealth creation from which they would benefit. ‘Trickle down’ neoliberal economics would become the prevailing orthodoxy for subsequent decades to come.
Meagher argues that what is required to break the existing paradigm is an holistic take on economics:
“Most people think that we need more competition to challenge monopolies. But what I’m trying to say is we can’t rely on competition and competition will not solve it. We can’t sit back, create competition, break up some companies and kind of say, OK, let’s let capitalism is fixed. You’ve got all of these deep ideas stemming back to neoclassical economics that really have regulators beholden”, says Meagher.
The lawyer stresses the need for power to be dispersed and democratized through the blocking of mergers and argues that workers need to be put on boards. The shoring up of countervailing power in this way is the key step to challenging corporate power.
Meagher is optimistic for the future:
“We have enough to feed everybody in the entire world right now. We don’t need more. We just need to share it around. And we have enough wealth for people to have meaningful good work, but we’re not giving them that. Instead, we’re forcing them to do more and more. So I think that it’s an optimism, but it’s almost an optimism that’s based in just accepting what we have and not saying that there’s some utopia that we can get to where we can have all of the promises of capitalism.”
Chris Williamson and Michael Hudson, share their views on what we can look out for in 2021.
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