Just how different attitudes were in the past can be hard to dredge up from one's memory.
For example, today, the topic of corporate collusion -- of big companies teaming up, formally or informally, to charge consumers more or pay workers less -- is of strikingly little interest. If Exxon and Mobil want to become ExxonMobil, well, sure, why not? The free market will make sure everything comes out okay!
But it wasn't always like that. My recollection is that public suspicion of the big boys engaging in cartelization and monopolization was near-obsessive up through the 1970s in leftwing, populist, and federal government circles.
To sniff out evidence of collusion, the government had all sorts of tests, both the equivalent in discrimination law terms of "disparate treatment" (a colleague told me that at a previous job he had to submit his appointment planner to the FTC to prove that he'd never been in the same town on the same day as various counterparts at another company suspected of price-fixing with his company) and "disparate impact" (the government had all sorts of complex formulas involving market shares that it used as prima facie evidence of anti-trust violations).
In the late 1970s, I took an Economics course at Rice that presented the now-dominant view that anti-trust had been overblown and there was little to worry about from mergers & acquisitions. The professor very much believed that he was part of small vanguard of intellectual rebels dissenting from stifling orthodoxy.
I came out of the class a true believer that there was very little need for anti-cartel laws.
But, a few things started to chip away at my faith. I read a little pre-1911 business history and a standard scene in any new industry was a meeting at hotel among all the competitors, where the most respected industry leader would open the meeting by saying, "Boys, we've got a problem: too much competition, and that leads to price-cutting. All this cut-throat competition just isn't American. Here in America, we cooperate, we get organized. So, what I'm suggesting is ..." This was not a last resort, either, it was the first thing businessmen in nascent industries did. It was, indeed, the American way.
Also, I then studied corporate strategy in MBA school. The main point of strategy is this: You know that Econ 101 example about how a wheat farmer in South Dakota is in a situation of "perfect competition" where he can't make any excess profits because he has countless competitors? Well, you don't want to be a wheat farmer in South Dakota. You want to find or concoct a situation of "imperfect competition" where you enjoy some kind of monopolistic advantage so you can make a higher return on your investment than that poor bastard in South Dakota.
Finally, I got a job and wound up doing some corporate strategy. And it turned out that, just like John D. Rockefeller had explained, competition was awful. My boss negotiated a lucrative merger with our archrival, but the Reagan Administration shot it down because customers complained that we wouldn't cut prices as desperately if the industry consolidated from three to two firms. Our customers happened to be giant corporations with lobbyists, not disorganized nobodies, so their complaints were heeded.
Yet, a dozen years later, the Democratic Administration approved the mergers of Exxon - Mobil and BP - Amoco, which would have been unthinkable to Democrats in 1974, but is largely forgotten today.
Yet, a dozen years later, the Democratic Administration approved the mergers of Exxon - Mobil and BP - Amoco, which would have been unthinkable to Democrats in 1974, but is largely forgotten today.
But interest in the whole topic of corporate collusion has waned significantly over the last generation. Today, the notion that companies have an interest in coordinating in various ways to make higher profits at the expense of workers and consumers sounds like, frankly, a Conspiracy Theory. And we all know about Conspiracy Theorists, don't we?
In contrast to current complacency about cartelization and monopolization, we live in age obsessed with rooting out white racism. The real threat in 2013, it appears from reading the newspapers, is not ExxonMobil and the like, but the Ku Klux Klan.
You might almost think that ExxonMobil and friends like it that way, but that would be a Conspiracy Theory, so forget I ever mentioned it.
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One of the interesting aspects to the whole praxis of Western civilization in the United States is how the internet has intensified mood-affiliation and ensuing idiocy.
Is there a single person (outside academia) in the United States who is pro-gay marriage, but anti-abortion? Pro-Iraq war but anti-Bush tax cut?
In the left economics blogosphere it gets humorous at times. You see Noahpinion (extrapolating from two data points) supporting laws to push Japanese women into the workforce to "increase Japanese birthrates" even though development economics dogmas suggested you should push women into the workforce to lower birthrates thirty years ago. The atheist movement also has suffered a little because of attempts to ensconce mood affiliation by labeling themselves Atheism +.
Interesting how getting booted from NR has freed your mind, isn't it?
Sure, a lot of things come up roses in the theoretical world. But in the real world, there are real human beings with really bad human desires. Anti-Trust laws were enacted for a reason. Like you said, even Reagan's DOJ used them. The main problem today is that Sherman Anti-Trust is selectively enforced.
Watching Steve Blog is like watching Fred Astaire dance.
Steve, corporate profits are at an all time high so there is evidence you are right
What may have changed the posture of the left on monopolization/cartelizarion was the dawning of awareness that a maintaining a genuine monopoly or cartel is very difficult, if not impossible, without the support of the state. As the left has acquired control of the state, it has lost interest in destroying monopolies and has recognized the benefit of creating them to enrich its friends.
Thus, for example, we may consider Fannie Mae and Freddie Mac, which exercise an effective duopoly in the secondary mortgage market (holding or guaranteeing approximately 90% of the mortgages written in the past 5 years). The two GSEs have been a plentiful source of sinecures and rewards for Democratic-party operatives like James Johnson, Franklin Raines, and Barney Frank's catamites. Similarly, "feeders" into the secondary mortgage market, like Angelo Mozilo, have
been big Democratic contributors, and have arranged sweetheart deals for politicians like Christopher Dodd and Kent Conrad. From the point of view of a Democrat, what's not to like about such arrangements? Government-granted monopolies were routine in past centuries as political rewards. Thus, for example, Elizabeth I gave her favorite the Earl of Essex a
monopoly on the importation of sweet wines. There is nothing much different in the government-directed "crony capitalism" we observe today.
A benefit the governing class realizes by the existence of fewer and bigger businesses, as opposed to many and smaller ones, is that the private sector becomes
easier to regulate and more readily makes accommodation with government. The resultant comity leads to effortless migration of the elite class through large business, government, and the non-profit sector, exemplified by characters like Robert Rubin and Larry
Summers. Contrast this with the small-business sector, which as a rule is resistant to regulation and high taxation and resentful of big government. Like the kulaks of the Stalinist period, small business is hated much more thoroughly by the left than the international financial elite, and bears the brunt of the left's persecution.
Of course, the notion that the left actually represents the interests of the laboring class can scarcely be maintained any longer with a straight face. The left's support for unbridled immigration, admitting millions of impoverished third-world peasants to compete for jobs with the 12 million officially unemployed American citizens, and perhaps 12 million more who are 'discouraged workers,' should be evidence enough for that.
Holder flat out told Congress that some financial institutions were so big and systemically important that the DOJ wasn't willing to prosecute then, even for working with Mexican narcotrafficers engaged in kidnapping and murder. That's basically a message to others that crime is okay. Why shouldn't there be a breakup? In theory his antitrust division isn't supposed to allow companies to get this big.
In 2000, shortly after the Exxon -Mobil merger, as I was graduating w/ an MBA from a large well-rated southern University, I interviewed for a Houstn-based MIS position w/ ExxonMobil. I thought the interview went well, but didn't get an offer.
On the other hand, in the late '70s, while in high school, I worked a gas jockey at a busy Mobil station right off a Boston-area freeway.
R.(epublicans) I.(gnore) P.(atently obvious truths) Teddy Roosevelt. We miss you.
-The Judean People's Front
Steve I'm not with you on this one. You yourself just compared the kind of absurd and meddlesome things the state does in the EEO arena with what it does in anti trust. Antitrust is just another way for the government to employ its faithful and hand out favors to the well-connected.
You've been on a roll the past few weeks, Steve.
I've appreciated it, but one thing bothers me. I can't think of a damned thing to do about the absurdity and corruption of our government and leaders.
Can you?
You have to remember that at the time of Big Oil mergers oil price was pushing $10. Oil companies were in a really bad shape. Everyone thought, as usually everyone does, that this situation would continue forever, so consolidation made sense.
Today's biggest corporations should be viewed as partners/allies of the state. Government Electric and Government Motors come to mind.
The elites use regulatory power to threaten the big corporations, and then extract their tribute in the form of cushy jobs, stock deals, inside information, bribes, free vacations, etc., etc.
The more profitable and protected the corporation, the more it can be used as a pinata by elites who control government.
The oil industry is not a particularly good example here. ROI for big oil companies is just sort of okay. If they're colluding they're not doing it very well.
it's not a conspiracy. It's an ecosystem. Probably the biggest reason why fake-leftism (social-issues leftism) has replaced true-leftism (economics-leftism) in the last 25 years is because far more people started going to college in america. College is basically an indoctrination center. And by that I don't just mean indoctrinating students with ideas about racism, white-race-guilt, gender equality and all that. That, yes, but more.
The fact is that college was formed for and by the upper class centuries ago. And it still maintains that essential characters. The ideology disseminated in young minds during college favors those at the top. Why would it be otherwise?
The basic platform of both the GOP and the Dems sprang from the ideologies promulgated in college and high school.
But that was not the case 40 years ago. And even less so 70 years. back then few americans went to college, and in fact few went to high school that much. And high school is also an indoctrination facility.
Education is more prevalent, and the curriculum thereof is centralised. And any centralized institution is controlled by ideology friendly to those at the top. They have the power and the money to do so.
100 years ago, ideology dominant among the populace sprang not from education but from the local church and the local grange hall. Centralized institutions are inherently dominated by those who have power and money or people who went to college and who young minds were molded by elite-friendly ideology.
100 years ago, the flow of ideology was localized and not centralized.
And so the minds of the people were not as domesticated as today. And the politicians had and still to some degree have to give lip service to the desires of the people. Therefore, 100 years ago, the politicians had to at least pretend to be against monopolies.
But with increasing education, you have domesticated minds everywhere. And domesticated means that fakeleftism has replaced trueleftism.
Shouting Thomas said...
You've been on a roll the past few weeks, Steve.
I've appreciated it, but one thing bothers me. I can't think of a damned thing to do about the absurdity and corruption of our government and leaders.
Can you?
=========================
Well, we are in bad shape. The culture and our minds have been domesticated. But things are trending our way. Before the internet there was basically NO outlet for alternative ideology. That is no longer the case. And now people are getting less of their ideology from centralized institutions and more from the internet. For example, facebook is one way that non-elite memes are being disseminated. It is a so process. But things are looking up.
Steve, is this post pro or anti anti-trust?!
- Confused.
I interviewed with Exxon while pursuing a MBA for their finance program. Didn't get offer either.
They don't take many people in their finance program.
This is nothing new.
The wealthy/powerful are always trying to fleece the rest of the society. "Diversity" is just a covenient excuse to build and sell lots of homes, weaken financial regulation, sponor guestorker programs, and let our overclass do whatever else they please.
Honestly, do you think 10 million illegals in America want an expansion of H1B? No. Our monied overclass is just using "hardworking family-oriented Hispanics wanting to come out of the shadows" as an excuse to bring over huge amounts of coolie IT labor.
"Diversity" can be an excuse to do anything.......
In the past, when Christianity was at the center of society, wealthy lords used to tell the serfs that it was "God's Will" for the servant to obey the master. In our current age, when diversity has assumed worship status, the wealthy tell us that it's pro-diversity to pass their agenda.
Remember when T-Mobile wanted that merger? They got all those minority organizations, who they'd been donating to, to come out and support the merger.
http://thehill.com/blogs/hillicon-valley/technology/151585-minority-groups-back-atatt-mobile
"Diversity" is a good way to make money. As is war. As is religion. It just depends what values your society embraces. Being feminized and having pretensions to sophisticaiton, our society prizes being inclusive and multicultural.
Leftism is America is largely Jewish in both origin and temperament. With some major exceptions like the Warburgs, in the early part of the century Jews were not in power. WASPs ran the show. So of course Leftism agitated furiously against the large business enterprises, which were WASP enterprises, and used "the working man" as street agitators, muscle and rhetorical cover for what was nothing more than attempts at power grabbing.
Over time, of course, Jews indeed moved into prominence, with the Ring of Power changing hands right about at the end of the 60s. Suddenly, Leftism dropped nearly all its concern with "the working man" and monopolies and such. After all, why would Jews agitate against what were now their own business interests? And presto changeo, the noble working white man -- proletarian hero! -- suddenly became Archie Bunker, subject of endless mockery, and blacks were used as street muscle rather than white working men.
Leftism in America shifted quickly from the workers cause to Cultural Marxist poison like feminism, civil rights, and you all know the rest. But the whole time the real goal has been the same: Jewish power.
The RICO Act was amended in 1996 to permit private suit for damages arising from a competitor gaining an advantage from hiring illegal immigrants.
But a legal cause of action for big business colluding on wage-fixing via purchasing congress on immigration numbers.... I think it will eventually occur.
"My recollection is that public suspicion of the big boys engaging in cartelization and monopolization was near-obsessive up through the 1970s..."
Remember that during the 70's the resurrection of the Yellow Peril in the form of Japanese Mega Conglomerates such as Fuji and in particular the big Japanese Banks struck fear in the hearts of American businessmen. If I remember correctly something like 3 of the world's 10 biggest banks were Japanese. This meant they could throw a lot of money at any economic challenge. Add to this the synergistic alliance of Japanese government and Big Business and this combination spelled the end of American Antitrust legislation.
The lesson learned; if you want to compete internationally (and not just for America's homegrown market) then Get Big or go under.
I've long suspected that the Left either has been hijacked by Big Money or that that's what the Left naturally turns into from trying to adapt to capitalism. I'm from Russia and we had had none of this foolishness like waycism and sexism. Many a boss still greets his typist with a gentle pat on the behind. Whenever someone gives the Left all the blame for whatever, I can't help but think there are two Lefts. One is the immigrationist, gay-loving anti-racist-sexist-lookist-agist Left that can't turn Europe into Caliphate Eurabia soon enough, and another the real Left which says that 18-hour shifts and having to sleep on the shop floor is wrong, or 400 freaking workers dying in factory fire in freaking Bangladesh is freaking wrong.
Which ever way you look at it, it definitely seems there's some "embrace-extend-extinguish" (term courtesy Micro$oft) type of thing been going between the Western left and Big Monny.
I don't think the sort of corporate collusion you mention is a big problem today. A different kind of collusion is the problem.
Do you pay more at the pump because Exxon and Mobil became ExxonMobil? Doubtful. Profit margins at gas stations are pretty thin, and there's still plenty of competition. The biggest component of gasoline cost is petroleum cost, and even ExxonMobil has little control over that, since most reserves are controlled by state-run companies.
Similarly, I doubt Apple is colluding with Samsung or Google to keep smart phone prices high; in fact, the opposite is happening, as Android phone manufacturers are going downmarket.
The collusion that's a problem today is between business and government. Companies charge absurd amounts for medical equipment, for example, because most of the costs of it are ultimately foisted on government via Medicare.
This business-government collusion also better explains the zeal for open borders than simply a desire on the part of business for cheap labor. When you take into account the benefits a poor American qualifies for, a minimum wage worker is worth several times his wage income as a consumer. Wal-Mart's sales spike on the day when the EBT money hits its customers' accounts.
It's a bit of misdirection like your wedding example: government largess to many corporations (and some professions) gets effectively laundered through poor people. So, the more poor immigrants, the more government money in the trough.
"Shouting Thomas said...
You've been on a roll the past few weeks, Steve.
I've appreciated it, but one thing bothers me. I can't think of a damned thing to do about the absurdity and corruption of our government and leaders.
Can you?"
Thomas Jefferson could give you a few...
What's with this distinction between "real" leftism (basically, blue-collar issues) and the "fake" variety (the cultural stuff)? The Bolsheviks were big into that avant guard stuff until Stalin had those types shot and became more "traditional".
Too big to fail is also too big to jail, as the kids say.
>The elites use regulatory power to threaten the big corporations<
The big corporations write the regulations. They are the elite. Of course, you can look at any symbiosis from one particular narrow angle and see a dominant-subordinate relationship. But the big picture is: these people are all on the same team.
..... In contrast to current complacency about cartelization and monopolization, we live in age obsessed with rooting out white racism. The real threat in 2013, it appears from reading the newspapers, is not ExxonMobil and the like, but the Ku Klux Klan.
You might almost think that ExxonMobil and friends like it that way, but that would be a Conspiracy Theory, so forget I ever mentioned it.
I do think the guys at the top prefer when people fret about sexism, racism and homophobia rather than the ownership of the means of production. For the very rich, a political Left that fritters away its energy on such feelings-based concerns is much easier to work with than people interested in who's getting rich and how they're doing it.
How about the consolidation in the media markets? In the late 70's/80's many newspapers, local TV and radio stations were locally and often family owned. Now there has been a great consolidation, today even local radio and TV stations are owned by conglomerates.
MSL:
I'm not a media personality, but I'm pro gay marriage and anti abortion, for whatever ir's worth. In general, it's pretty much impossible to believe that you will carefully think through the issues of the day on your own and just happen to cnverge on the exact same set of positions as one of the two big parties or one of the half dozen big ideological movements with paid shills and publications. But that's okay, because for most people, politics is a lot more like rooting for your team than like knowing anything about the policies your team supports.
Maybe I'm being naive, but what harm has come of the these consolidating oil companies?
They don't set oil prices, Exxon Mobil make money from their refining expertise, they don't make much from owning oil, although they do benefit somewhat from rising oil costs because of the inventory they hold. Increasing cost of oil is primarily driven by international demand vs. purported future supply.
Exxon Mobil is one of the worlds largest companies because of the sheer amount of oil they refine.
We have an infrastructure that has rarely stumbled in the past decade. Have you ever feared being unable to fill your gas tank in the last decade because of restricted oil supplies?
Regardless, this is all very much industry based. You'll see industries with more government intervention tend to suck more for consumers.
Telecom industry is probably the biggest one, a company that was subsidized heavily by the government should not be able to just swallow media companies whole. ATT, Verizon, Comcast, these guys are really regressive.. But even I'm unsure how much they're gouging us by. In comparison to European/East Asian nations our cell phone plans might seem ridiculously high. But I've never heard of a European plan that allows you good 4g lte service throughout a bunch of neighboring European countries. The higher tier providers only have plans that cover all of America, a really huge country as you know.
And Microsoft was beaten down by good competition quite steadily, though their dominance in the professional sphere is quite healthy, especially their enterprise excel suite..
'But interest in the whole topic of corporate collusion has waned significantly over the last generation'
Also, in what social circles do you walk in that focus so heavily on white racism over economics? The general populace will rarely care about economics, no matter what age or generation you're a part of. Only because you've largely left the professional world, doesn't mean people have stopped caring about collusion or whatever.
The media has always been nuts though, that's just their thing. The advent of the internet should chip away at their power quite nicely.
Edo:
Yes, this. Most kinds of market consolidation don't seem all that disturbing--maybe someone ends up with a big share of the potato chip market or something. But media consolidation and monoculture is disturbing, because it represents a concentration of power. If there are half a dozen companies that can quietly decide what news won't be reported (and there are, and they do, though I think this, too, is more like an ecosystem than like an overt conspiracy), this gives them a huge amount of power--not just political power, but also power over societal change and widespread ideas and markets. We see the consequences of that every day.)
Your economics professors were closer to being right about private monopolies than Democrats believed, your business experience appeared to indicate or pseudosophisticated theories teach. Most private firms are eternally struggling to establish a competitive advantage, the supra-normal profits of which motivate them to beat their rivals on price or quality. This advantage, once achieved, usually lasts just until some other firm comes along and does it better.
Democrats lost interest in monopoly power when it became obvious that almost all the really effective, substantial and enduring pricing power in U.S. industries sprang from union power, e.g., Detroit auto workers, airline pilots and public school teachers.
Oil prices did not exceed $100 per barrel for a while because Exxon and Mobil got together. Price shot up because a few Arab and other states control so much low-cost reserves and because environmental concerns or political chaos blocked development in other countries.
If y'all object to the ExxonMobil example, what about GlaxoSmithKline? I mean, hey, how many giant pharma companies do we need, anyway? Quick extract from the wik:
(Glaxo) was established in 2000 by the merger of Glaxo Wellcome plc (formed from the acquisition of Wellcome plc by Glaxo plc) and SmithKline Beecham plc (formed from the merger of Beecham plc and SmithKline Beckman Corporation, which was formed by combining the Smith Kline French and Beckman companies).
It isn't a question of what big companies want to do, it's what they can do. You cite the historical record of big shots getting together at a resort and planning to stifle competiton. If trusts were that easy to form and enforce they wouldn't have to get together to do it or to get up and complain about how competiton is ruining their bottom lines. The fact that all these little would be monopolists gripe about competition shows how pervasive it is and how hard it is to eliminate it.
The conventional cartels usually never last for long, anti-trust should focus on big companies merging which is a more effective threat to competition. On the level of mergers and acquisitions I agree, why allow 7 firms to become 3 or 4, the Reagan Administration killed the Pepsi/7up and Coke/Dr. Pepper mergers in it's second term, but Clinton didn't stop Chevron/Texaco, Exxon/Mobil, BP/Amoco, and Conoco/Phillips as well as the Big 7 accounting firms from merging as well. As long as companies are not free to merge and acquire, competition will predominate in most cases, because cheaters will always have an incentive to break the cartel.
100 years ago, ideology dominant among the populace sprang not from education but from the local church and the local grange hall. Centralized institutions are inherently dominated by those who have power and money or people who went to college and who young minds were molded by elite-friendly ideology.
Centralized institutions will be dominated by cohesive groups.
There's no reason it should be any different for people than for insects: E.O. Wilson tells us that "social insects control the center of the land environment, while solitary insects predominate in the margins."
For thousands of years the center of the land environment was the area where Africa, Asia, and Europe came together. Theory tells us we should expect cohesive (ethnocentric) groups to come from this region, and this is in fact the case. The same qualities that allowed such people to control the center of the land environment equip them to control the central institutions of our societies.
ben tillman said...
quoting me:
"100 years ago, ideology dominant among the populace sprang not from education but from the local church and the local grange hall. Centralized institutions are inherently dominated by those who have power and money or people who went to college and who young minds were molded by elite-friendly ideology."
.................
Centralized institutions will be dominated by cohesive groups.
================
my reply:
Cohesiveness is indirectly proportional to the size of the group and the heterogeneity of the group. In general, the larger the group, the less cohesive. The small, the more cohesive. Also, the more homogeneous, the more cohesive. Compare the cohesiveness of these groups: 1) the american populace and 2) the group of americans with net worth greater than 100 million dollars. Which is larger? Which is more heterogeneous? The answer is that smaller groups are more cohesive and therefore more able to organize into goal-directed activity. Likewise, they more homogeneous with respect to the most important shared characteristic: wealth.
Also, cohesive is only ONE factor in efficacy (the ability to act and carry our a plan). Another factor in efficacy is wealth. The more wealth, the more power. Shocking, eh?
you wrote:
==============
There's no reason it should be any different for people than for insects: E.O. Wilson tells us that "social insects control the center of the land environment, while solitary insects predominate in the margins."
For thousands of years the center of the land environment was the area where Africa, Asia, and Europe came together. Theory tells us we should expect cohesive (ethnocentric) groups to come from this region, and this is in fact the case. The same qualities that allowed such people to control the center of the land environment equip them to control the central institutions of our societies.
============
my reply:
my analysis above explains why the rich are the predator-parasite that we must control. Your mind, of course, is owned by them.
>Price shot up because a few Arab and other states control so much low-cost reserves<
In other words, because of monopolies. Monopolies are government-business partnerships. Aka "corporations."
>almost all the really effective, substantial and enduring pricing power in U.S. industries sprang from union power, e.g., Detroit auto workers, airline pilots and public school teachers<
Is this an odd use of tu quoque? You seem to be implying that the people actually doing the work, whose surplus created most of the "supra-normal" profits, are just as bad as (or worse than) corporate boards of directors. And why? Because they organized to counter those boards, who prefer them to be slaves or worse.
In the minds of modern court advisers (aka "economists"), the ideal situation, which their recommended polices tend to realize, is a world of mongrelized, artificially insecure masses functioning as interchangeable cogs (slaves, even serfs of the classical kind, actually involve too much upkeep), plus, controlling them, a business-government junta of tiny elites (i.e., modern corporations) that makes trillions off them. The euphemism for this system is "efficient markets," and it produces, among others, such collateral benefits as Walmart* et al., engineered coups and wars, regular bouts of massive unemployment, global-scale ecological destruction, and multi-trillion-dollar bank bailouts to be paid for out of the hides of depositors and taxpayers. If this sounds crazy, it's not my fault.
It's the fault of people who don't look at what has been going on in the world for the past 50+ years.
* In Germany, which has the healthiest economy in Europe, the Supreme Court essentially kicked Walmart out of the country a decade ago. Well, after all, they're Germans...and you know what that means.
Aren't Asians, Africans, and Muslims bigoted against their own people by taking flight from their own countrymen to go live with whites in the West? If they can't stand their own kind, why would whites take a particular liking to them?
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