I think the relationship between competition and concentration should be
seen in dialectical terms. One leads to the other in a dynamic context,
showing considerable variability among sectors under study. A useful,
accessible chapter, albeit for a different topic, is from Rhy Jenkins
(1987) Transnational Corporations and Uneven Development, New York:
Methuen & Co.
Anthony D'Costa
U of Washington, Tacoma
On Fri, 9 Jun 2000, Jim Devine wrote:
> Date: Fri, 09 Jun 2000 10:18:42 -0700
> From: Jim Devine <[EMAIL PROTECTED]>
> Reply-To: [EMAIL PROTECTED]
> To: [EMAIL PROTECTED]
> Subject: [PEN-L:20055] Re: Wall St. J.: Monopoly the coming thing
>
> At 08:32 AM 6/9/00 -0700, you wrote:
> >Jim Devine has, both in the latest go round with Tom Walker, and at other
> >times, asserted his belief that competition is much stronger now than in,
> >say, the 1950s.
> >
> >Each time I read that I noted my disagreement to myself but passed on the
> >thread.
> >
> >As I think of how the airlines, banking, farming, etc. have consolidated
> >since the 1950s I disagree with Jim each time he makes his assertion.
>
> I'd say that between the 1950s or 1960s and the present day, there's been
> an increase in competition if one looks at the US economy _as a whole_,
> especially if you bring in the role of international competition that has
> increasingly hit goods-producing industries. But just as Marx pointed out,
> this increase in competition is spurring the drive to concentrate and
> centralize power, i.e., the creation of new monopolies and oligopolies,
> this time on a _global_ scale (as seen with Daimler-Chrysler, etc.)
>
> This process can be seen on the micro-level in airlines. Back in the "bad
> old days" of the 1960s, that industry was organized by a
> government-sponsored cartel called the Civil Aeronautics Board (that was
> established to create the airline system). It was abolished in the late
> 1970s (under the Democrats, BTW), resulting in a period of intense
> competition. This in turn led to the consolidation of new, private,
> monopolies (in new forms, like the hub city system or cheating in the
> electronic booking system). The story of the airline industry preceded
> what's happening in general (even though the fallacy of composition
> indicates that one cannot automatically generalize from one industry to the
> entire economy).
>
> Banking follows the pattern of airlines with different timing. Competition
> was until very recently restricted by bans on interstate banking and (in
> many US states) bans on branch banking. As a result, we saw lots of local
> monopolies or oligopolies in banking, which some people interpreted as
> competition because they saw a large number of banks. The recent trend has
> been toward breaking down these "anti-competitive" bans (partly by people
> figuring how to get around them and partly by legislation). This (along
> with the S&L/banking crisis of the 1980s and the rise of competition from
> other sectors of finance) in turn is encouraging massive bank mergers. (Can
> you say "Bank of America"?) So we are seeing the replacement of local
> monopolies and oligopolies with a national oligopoly of banks, each of
> which will have much more political influence than they have had in the
> past and will be deemed "too big to fail" by their friends at the Fed.
>
> As for agriculture, the general trend for the longest time has been that of
> the concentration and centralization of power, grinding the small farmers
> out of the market (or dominating them as subcontractors). But would you say
> that the behavior of the market for wheat or other agricultural commodities
> is describable in terms of monopoly or oligopoly?
>
> (BTW, I don't see competition as necessarily a good thing for consumers or
> workers, just as I don't see monopoly as necessarily a bad thing. As Yoshie
> pointed out, the existence of monopoly/oligopoly in product markets allowed
> organized labor to get a chunk of the "monopoly rents." On top of that, I'd
> say that the general rule is that competition and monopoly co-exist as part
> of a dynamic process, so that we shouldn't go too far with the competition
> vs. monopoly dichotomy.)
>
> Jim Devine [EMAIL PROTECTED] & http://liberalarts.lmu.edu/~jdevine
>
>
