Economic monopolies-- enterprises or groups of enterprises that overwhelmingly reign over a specific economic sector-- have been the target of reformers and revolutionaries since their widespread notice in the last quarter of the nineteenth century.
Many keen observers in the most advanced capitalist countries of the late 1800s perceived the development of a tier of capitalist firms in various industries that rose to dominate those industries. Through rapid expansion, ruthless competition, absorption, and consolidation, a few capitalists or corporations acquired a majority share of markets and the lion’s share of profits.
A classic US example of the process of monopolization was the creation of the Rockefeller oil monopoly, Standard Oil. Like an uncontrollable wildfire, Standard Oil devoured competitors, both horizontally-- in oil extraction-- and vertically-- in the shipping, refining, and selling of the final product. Eventually, Standard Oil was on the verge of completely controlling the petroleum industry in the US.
In Marxist circles, the trend toward concentration in various industries-- monopolization, cartelization, the formation of trusts-- came under serious study in the early twentieth century. Hilferding and, more popularly, Lenin, saw the intensification of capital, the accumulation of capital in fewer hands, as a new phase or stage in the development of capitalism.
Lenin had the theoretical insight to link concentration of capital to a host of other features of twentieth-century capitalism: the crucial role and powerful influence of finance capital, the export of capital, the division of the world by enterprises and powers, and the ensuing ruthless competition. The term “imperialism” became shorthand for these processes. Imperialism explains why the twentieth century was a century of intense rivalries for markets, influence, domination, and resulting wars on an unimaginable scale.
The era of the growth of monopolies gave birth to two forms of resistance: a popular resistance to the concentration of power and wealth in fewer and fewer hands and an elite resistance to the competitive advantage of monopolies in the battle for market access, pricing, resource acquisition, and the setting of the rules of the business game.
The two forms of resistance have different social bases and seek different goals, though throughout the history of anti-monopoly struggle, there have been efforts to link the goals and there have been attempts to unite the bases. The linkage of the two forms has been a challenging and, often, ill-fated project. It remains an awkward project.
An early example of a popular anti-monopoly struggle occurred with the US People’s Party in the last quarter of the nineteenth century. From political origins in agrarian populism, the People’s Party attacked the monopolistic policies of the big banks and the railroads. The Party raised a host of reforms designed to regulate or rein in the power of the monopolies to the benefit of those in the Midwest and South dependent upon the then vitally important agricultural economy.
The new party enjoyed significant early success, garnering 8.5% of the presidential popular vote in 1892 and carrying 5 states. But divisions based on class and race and the allure of fusion with a major party demoralized and splintered the People’s Party. Its leaders were unable to construct a deep appeal to the urban working class or devise a program targeting the real sources of wealth and power, leaving itself susceptible to the demagoguery and shallow solutions of a mesmerizing rhetorician like William Jennings Bryan.
Anti-monopoly sentiment continually finds a home with populist movements of left and right. The fact that it so easily expresses itself as antagonism toward groups perceived as privileged by status, wealth, power, or ethnicity, accounts for its political flexibility. At the same time, because it is susceptible to demagoguery, it can provide an unstable base for a movement for social change. Too often monopoly power is answered with shallow analysis (“it's the banks!”, “it’s the 1 percent!”), hasty generalization (“it’s high tech”), or even ethnic prejudice (“it's the Jews”). Too often unsustainable, cross-class alliances are carelessly projected as a foe of monopoly without a solid basis for unity. Too often monopoly is viewed as a tumor growing on capitalism that needs to be excised for the capitalist system to resume a healthy course.
Lenin never made these mistakes.
For Lenin, the anti-monopoly strategy was anti-imperialism and anti-capitalism. In other words, attacking monopoly could not be separated from those elements that fuse together in a particular stage of capitalism-- the stage of imperialism.
And because it was a necessary stage of capitalist development, it could not be surgically removed to restore capitalism to an earlier era of “innocence.” With the development of Lenin’s thinking on state-monopoly capitalism-- the fusing of the state with monopoly capitalism-- the idea of such a surgery became even more far-fetched.
Nonetheless, in the post-World War II era, the idea of an anti-monopoly front or alliance attracted some support from Western Communist Parties. Communist theoreticians argued that small business people, farmers, and workers could be united around a program that targeted monopoly capitalism as a common enemy. In the most advanced capitalist countries, small businesses were driven into bankruptcy or absorbed by giant firms that commanded the heights of the economy. The power of monopoly left their smaller competitors disadvantaged in access to capital, labor, and resources.
Of course, small and middling farmers faced the same disadvantages against mega-farmers like Archer Daniels Midland. Though much smaller in number, farmers today face some of the same exploitative conditions with banks and logistics as did their nineteenth-century forbearers.
Monopoly capital is especially devastating for the working class. With the mobility of capital to the lowest wage regions, with the power of defeating or co-opting unions, with the ability to organize and set consumer prices while employing labor-saving technologies, monopolies exploit workers as employees and consumers.
Left-wing interest in monopoly capitalism likely reached its zenith in the 1960s, especially with the publication of Paul Sweezy and Paul Baran’s Monopoly Capital (1966), an important book that continues to influence the left to this day.
Monopoly Capital came as a summary of the immediate post-war period of strong economic growth, the dominance of US monopoly capital worldwide, and the rapid concentration of economic activity in the hands of a few US capitalist enterprises. The “big three” in auto production, AT&T in communications, USS, ALCOA, Anaconda, General Electric, IBM, and a host of other industry leaders capturing huge portions of global production seemed to foretell a hierarchy of capitalism characterized by monopoly dominance and the decline of competition.
But matters changed in the decade to come. Corporate competition from Taiwan, Japan, South Korea, Germany, and other countries intensified, challenging leaders in the older industries and spawning new emerging industries. Competition brought challenges to the complacency accompanying monopoly dominance. New products, new product categories, new production methods, and new technologies competed ruthlessly for customer loyalty.
As I argued in an article in Communist Review (winter 2016/2017), many of us followed Sweezy and Baran in associating the process of concentration with a decline in competition. We too readily accepted the simplistic mainstream economics textbook account that portrayed monopoly as the state-of-affairs resulting from a one-directional process leading to a few mega-enterprises and tepid or non-existent competition or even large-scale monopoly collusion (it bears similarities to Kautsky’s discredited theory of super-imperialism). We, along with Sweezy and Baran, mistook a continuously unfolding tendency for an enduring final state-of-affairs, underestimating capitalism’s dynamism.
While this might have constituted a snapshot of the US economy in the mid-1960s, it was far off the mark with the decades to come. Capitalism proved far more resilient. New enterprises, new industries, new commodities emerged to challenge this simplistic picture, while concentration-- the bankruptcy and absorption of the lesser players-- continued unabated. Concentration and competition are not mutually exclusive.
Marx and Engels understood this well.
Writing in their earliest pamphlet on political economy, Outlines of a Critique of Political Economy, a work much admired by Karl Marx, Frederick Engel’s wrote:
Competition is based on self-interest, and self-interest in turn breeds monopoly. In short, competition passes over into monopoly. On the other hand, monopoly cannot stem the tide of competition-- indeed, it itself breeds competition.
Thus, is the dialectics of competition-monopoly.
Marx affirms this dialectic in the Poverty of Philosophy:
In practical life we find not only competition, monopoly and the antagonism between them, but also the synthesis of the two, which is not a formula, but a movement. Monopoly produces competition, competition produces monopoly. Monopolists are made from competition; competitors become monopolists.
Interest in curbing monopoly is having a rebirth today. The rise of a new set of huge enterprises dominating their industries and amassing unprecedented mountains of capital has generated a strong reaction. The notion that key financial institutions needed government bailout, that they were “too big to fail, ” produced an angry reaction from people crushed in the 2007-2009 crash and disgusted smaller businesses left to face collapse without any help. The outrage against banks and other financial institutions persists to this day.
The concentration of corporate power through mergers and acquisitions is expressed through increasing pressure on the state to tilt the playing field in favor of capital and the wealthy (in 1984, mergers and acquisitions totaled $125 billion; in the first 8 months of 2021, they totaled $1.8 trillion in the US, $3.6 trillion worldwide).
Similarly, popular sentiment against the greed and arrogance of the technology giants-- Google, Amazon, Apple, Microsoft, and Facebook-- is boundless today, leading to several antitrust investigations and proposed regulatory legislation. Their size and importance in the global economy point to both the dangers from the rise of monopolies and the dramatic shift in the towering heights of capitalism from the time of the Sweezy and Baran classic.
The Biden administration’s appointment of two antitrust activists to head the Federal Trade Commission and the Justice Department’s antitrust arm is an important reflection of the growing interest in anti-monopoly action.
Dubbed “neo-Brandeisians,” after the former Supreme Court Justice who led the antitrust battles of the early twentieth century, prominent lawyers and politicians are taking aim at the big tech companies. As the two-year study by the US House’s Judiciary Committee concluded, “...there is a clear and compelling need for Congress and the antitrust enforcement agencies to take action that restores competition, improves innovation, and safeguards our democracy.”
Tellingly, the six house bills directed against monopolies say little-to-nothing about the harm that wealth and corporate concentration have on working people. Instead, they charge monopolies with disrupting the smooth functioning of capitalism and with encumbering the competition with The People's Republic of China and other global competitors. In other words, this center-left initiative is meant to strengthen capitalism by regulating concentration; it is shorn of almost any but the most indirect benefit to working people.
The center-left, Democratic Party-centered anti-monopoly strategy contains no assistance in organizing workers, in ensuring better working conditions, or in increasing wages and benefits within the most concentrated industries. It fails to speak to the high prices and shoddy quality that monopolies offer the consumer. Nor does it address the erosion of democracy fostered by the inordinate influence of giant monopolies on the political process. That influence is only amplified by monopoly ownership of the media, misdirecting the public away from the real issues and viable solutions.
Arrayed against the capitalism-serving program of the center-left are the apologists for mega-business, who argue that the industrial giants-- through the intense price competition that weeds out the smaller players-- are giving consumers better prices, more efficient services, economies of scale. During the so-called “neo-liberal” period, this hands-off position toward big business-- trusts, cartels, monopolies-- gained the allegiance of both major parties. It is only in recent years that some Democrats have contended that monopolies are a hindrance to capitalist growth, competition, and innovation.
But notice that this debate over monopoly is contained and reduced to which strategy better promotes capitalism: enhanced competition versus consumer advantages (see this The Wall Street Journal op-ed). Where is the damage inflicted on the working class by monopolies? Who will address the monopoly super-exploitation of workers like those at the Amazon work centers? What checks are there on monopoly power’s influence on elections? On the media? On pharmaceutical prices? On utilities? Where are the protections of wages and jobs in the era of transnational monopolies and the easy mobility of capital to low-wage areas?
If confined to the two major political parties, these issues will not be advanced. However, they are the concerns of workers and belong on the agenda of organized labor. A vigorous popular campaign against monopoly, if adopted, would energize a labor movement in retreat and unconditionally wedded to the program of the Democratic Party. An anti-monopoly program, though worker-centered, would find allies in other sectors of the economy preyed upon by monopoly capitalism.
The late Communist political economist, Victor Perlo summed up labor’s interests in joining with others in curbing the monopolies in his 1988 book, Super Profits and Crises: Modern US Capitalism:
●the strength to curb workers’ actions, strikes.
●the ability to raise prices to compensate for wage and benefit gains
●capital sufficient to employ labor saving technology and reduce employment and wages
●the power to relocate work to the lowest-paying regions or countries
●the political weight (state monopoly capitalism) to influence government, to extract concessions, to reduce taxes, to extort government funding and government support against the interests of labor.
These issues would well serve a labor movement bereft of ideas and mired in the muck of class collaboration.
Similarly, a people’s anti-monopoly agenda would focus the work of third parties like the Green Party or the People’s Party, while attracting a broad sector of people affected by the cruel lash of monopoly capital.
But let this be a cautionary tale for Communists and socialists who must avoid the trap of equating anti-monopoly struggle with anti-capitalism. Through the dialectic of competition and monopoly, capitalism persists. Smaller, non-monopoly capitals would ravage working people as brutally as does monopoly capitalism. While monopoly capitalism, with its historically evolved features, is the capitalism of our era, the goal post is the ending of capitalism and the construction of socialism.