Over at the League - heck, over at the whole blogosphere - you get a lot of right-wing pundits and libertarian types talking about how regulatory capture or rent-seeking behavior wouldn’t be a problem “if government were just smaller with less regulation” because then there’d be no reason for large corporations to try to capture the government.
But in a Slashdot discussion about an incredibly slanted set of congressional hearings today, I saw a gem. To wit:
The core problem is not that government has gotten too big. The core problem is that businesses have become bigger than government, big enough to engage in regulatory capture and rent-seeking behaviors.
This is something that’s happened time and again. The British East India company essentially took over the British government for far too long, leading to the ruin of Britain as a nation for some time. In the early 1900s, we needed a major slew of trust-busting activities BY the government [u-s-history.com] because of abusive companies like Standard Oil and Nortnern Securities who had engaged in regulatory capture and were exerting unfair monopoly controls, slowly taking over more and more sectors of the economy.
Sound familiar? Strike any parallels at all to the incredibly abusive megacorporations of today that gobble up sectors at an alarming rate? Or did you notice - for instance, that of the “fast food chains” in the US, more than 50% of them are actually owned by ONE company, “Yum Brands”, which is itself owned by Pepsi - which also owns Lay’s potato chips, Ruffles, Lipton, Doritos, “Quaker” brand, and on and on…
Still think there’s any real competition left in the bullshit “free market” the Republicans worship so much? Might as well melt your coins down to a golden calf right now, buddy. There’s not a real christian left on the “religious right”, they’re worshiping greed instead.
This struck a nerve. Many of the parallels today to the trusts of the late 1800s/early 1900s are very apt. You have one factory making multiple labels of a food type. Or two. Or three. You have 101 brands of cat food contaminated because a single company is involved in making them all. You have single companies that make the entire array of supposed “competing products” that people believe are competing with each other.
There’s something very wrong about this. It seems to me that the anonymous commenter on Slashdot is hitting the point quite close to home; we wouldn’t have a problem with regulatory capture if there weren’t huge, overarching megacorporations running fake “competing brands”, exerting monopoly or near-monopoly pressures that destroy the idea of the “free market” that the libertarian/conservatives believe exists.
So I’d like to ask some readers from both sides of the aisle here (not political parties mind you, but just economics-wise): do we actually have a “free market” today? Can we even consider our market a “free market” when there are megacorps like Kraft, or Pepsico/”Yum Brands”, or any of the other giants that constitute monopolies, skewing the result? If not, is there a fix to be had, short of another round of trust-busting and the re-institution of most of the anti-monopolist rules that it seems have been done away with in the “deregulation fever” of the past few decades?