Cancer and Monopoly
The Hidden History of Monopolies
Cancer and Monopoly
Cell phone service that costs $15 a month in France or $12 a month in Australia bills out at an average of $61.85 per month in the United States. High-speed broadband that’s a bit over $31 a month in France or $36 in Germany (for higher speeds and better reliability than almost anywhere in the United States) averages nearly $70 per month in the US. Similar metrics are found with pharmaceuticals, airfares, and medical costs, among dozens of other product and service categories.1 Why is this? Monopoly.
The average American family pays an annual “monopoly tax”—in additional costs for pretty much everything—of around $5,000, according to economist Thomas Philippon. And things are steadily getting worse as monopolistic concentrations continue to tighten their grip on every American industry from banking to telecom to food.2
Monopoly isn’t the arcane, legalistic thing that most Americans think of (if they’re not mistaking it for the board game, which was invented by Elizabeth Magie in 1904 as a cautionary tale3). In multiple very real ways, monopoly touches the lives of all of us.
A monopoly is broadly defined as a single part of a larger system that takes over or dominates, controls, and consumes all the energy and functions of the entire system. In the process, the system is warped and twisted away from its normal function and, like a body reacting to a cancer, begins to redirect all its resources to feed the single monopolistic entity.
Cancer in the body works pretty much the same way that monopoly works across an entire spectrum of things, from monopolies in business to monopolies in religion, language, agriculture, power systems, and, ultimately, the biological systems of the planet over which we humans have seized monopoly control.
This book is about what happens when the cancer of monopoly infects the economic, political, religious, atmospheric, biospheric, or cultural body. In virtually every regard, the explosion of humanity across our planet, along with our monopolization of the food, water, soil, and cultural resources of the planet, is cancer-like. Big business has done the same in our economic and political realms. The result—if we don’t get this under control soon—will be disaster.
Which raises a fundamental question, asked from the days of Plato to Adam Smith to Bernie Sanders: Is the economy here to serve the majority of the people, or are the majority of the people here to serve the economy and those few who own the largest parts of it?
Until the 1980s, the consensus answer was the former, and the primary regulator of the economy, the government, largely worked to protect working people. Since the “Reagan Revolution,” however, the issue has rarely been raised, as media, the courts, and the majority of politicians of both parties have chosen the latter answer.
And the principal vehicle used by those who control most of the economy to regulate it to their favor and against average working people has been monopoly.
Monopoly (using the term in its broadest sense, to include everything from a single company controlling a market to a half dozen companies working in a cartel-like fashion) is why working people’s pay hasn’t gone up since 1982, when President Ronald Reagan’s Federal Trade Commission and Department of Justice stopped enforcing the anti-monopoly laws.4 The rich have gotten fabulously richer since then. Consumers, when harmed or ripped off, have largely been stripped of their legal powers to hold businesses accountable. America now lags behind other countries in innovation, which is why (as one small example) we have the highest pharmaceutical and health care costs in the world.
Our streets are filled with guns, our schools have been stripped of books and school supplies, and our food is so deficient in nutrients (vegetables today have about half the nutrients they did in 19505) that we are experiencing a malnutrition induced obesity epidemic.
Monopoly is why it’s so hard to start a new business (particularly a small, local business) and so difficult for existing local and regional companies to survive. It’s why pension funds have been “legally” stolen, and the vast majority of workers have lost or been denied the right to representation in the workplace.
Monopoly is why so many of our politicians seem to work in lockstep against the interests of average people and in favor of big business and the very rich. More and more democracies around the world are sliding into autocracy and oligarchy. Our courts have repealed laws passed in the first decade of the 1900s—both federally and in the states—that made it a crime for corporations to contribute “any thing of value” to political campaigns, even though voters overwhelmingly support limits on campaign contributions.
Because of monopolies, billionaires pay lower tax rates than you do, and the nation’s largest companies not only usually pay no taxes at all but also get billions every year in subsidies funded with your tax dollars. So many families have fallen out of the middle class that this country is experiencing epidemics of suicide, opioid addiction, and divorce. Our defense budget is bloated, while our returning soldiers find it harder and harder to get jobs or services.
Although it’s almost never discussed in our highly monopolized media, monopoly is why right-wing radio and TV are found in every nook and cranny, every town small and large across America, while progressive media is marginalized. It’s why our politics are broken and foreign governments have been able to manipulate our elections and seize control of so many of our politicians.
Th e simple fact is that everything—literally everything— exists in some sort of a balanced relationship with every thing else and does so because everything obeys simple rules to maintain that balance. Break the rules—as both business monopolies and cancer do—and the balance collapses.
Most of these rules are the rules of nature; our bodies, for example, have a complex and delicately balanced immune system that detects when a cell has mutated in a way that it’s breaking the rules, and the immune system takes that cell apart, recycling its internal materials. But lacking the proper nutrients to maintain its normal functions, our immune systems—the rule-keepers—become less and less able to do their jobs. Th e result is disease and, in the worst cases, cancer.
Similarly, when the rule-keepers in political and economic systems are compromised, monopolies emerge just like cancer does in bodies. Those monopolies suck all the resources out of the system and eventually either change it so much that it’s no longer functional or push it so far that it collapses.
During the first few months of a tumor’s growth, if it were self-aware, it’d be quite proud of its ability to reroute blood and nutrients away from other cells and into itself. Similarly, rule-breakers often are quite successful, at least for a while. Consider the organized-crime “mob” and its dominance of the construction and real estate industries in New York up until the past few decades.
For some time, mob- and oligarch-connected real estate developers like Donald Trump were able to build themselves empires based on unfairly winning against competitors who played by the rules and didn’t lie about their properties or hook up with overseas criminal billionaires looking to stash ill-gotten gains or hire illegal undocumented laborers from Poland.
In the United States, in large part because of massive changes in the rules of business starting during the Reagan Revolution, we’re now in the cancer stage of capitalism. Similarly, our environment is badly out of balance and could be
described as cancerous. So far, most of the victims have been those who can’t fight back: workers who’ve seen their pay and rights crash, and people whose homes and lives have been rav aged by out-of-control weather systems they can’t control or defend against.
But, like an immune system desperately trying to fight back against a fast-growing tumor, workers are wising up and starting to demand that the rules return to the kind of balance that kept wages high and inequality low before Reagan; similarly, nations around the world are reacting to the climate crisis by cutting their carbon outputs and moving rapidly to renewable energy sources. Th e question now is whether the cancer of monopoly has gone so far that it’s like an end-stage metastasis; will Western democracy survive its assault?
Monopoly doesn’t threaten just the business world. It spreads its cancerous tentacles into politics as well, destroying the ability of government to make policy that allows free people to make their own decisions about their own lives.
As President Teddy Roosevelt, the great trust buster, said, “Th ere can be no eff ective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task.”6
Adam Smith wrote, in Wealth of Nations, “[T]he monopoly which our manufacturers have obtained against us. . . . [L]ike an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature.”7
If the economic engine of the United States is to be turned back to benefiting the majority of the people rather than today’s small minority, breaking up monopolies will be one of the most powerful tools to bring about that change.
Keep reading with a 7-day free trial
Subscribe to The Hartmann Report to keep reading this post and get 7 days of free access to the full post archives.