Monopoly World: Oligarchy and Authoritarianism

Monopoly World

Directed by Louis Waller (2024)

Film Review

The present world economy is dominated by monopolies

Apple owns a 70%  share of the smartphone market.Luxothca owns an 80% share of the eyewear market (they own both the Rayban and Prada brand, among many others), resulting in a 5,000% margin on sunglasses.Expedia has huge monopoly on travel booking sites.Four companies produce 80% of US meat.Comcast own 70% of the broadcast industry.Nestle has a monopoly on candy brands and baby foods.A monopoly in hospital chain ownership was used to suppress union wage.Two companies own 82% of coffin companies.The vast majority of Internet visitors use Google’s search engine and make a Meta network (Facebook, Instagram or Whatsap) their primary social media platform.Only 10 companies control almost every large food and beverage brand in the world. PepsiCo, Coca-Cola, Unilever, Danone, General Mills, Kellogg’s, Mars, Associated British Foods, and Mondelez.

Historically granting monopolies used to be a prerogative of the British crown, a trend  Elizabeth I began in the 17th century. The latter created monopolies over virtually every aspect of life. Adam Smith warned against monopolies in the Wealth of Nations, concerned it enabled corporations to conspire against the public interest by raising prices.

The Massachusetts Bay colony banned monopolies in their 1641 Massachusetts Body of Liberties. The Maryland and North Carolina legislatures banned them in 1776. Anger against the East India Company monopoly on tea was one trigger of the US War of Independence. Thomas Jefferson wanted to include a clause in the US Constitution banning monopolies.

By the end of the 19th century, the US was dominated by a new kind of monopolies. Instead of being granted by government, these new monopolies came about when more efficient businesses bought out their less successful competitors. At the start of the 20th century, monopolies controlled the oil, meat packing, rail road, tobacco, coal, lead and steel industries.

There are two types of monopolistic integration: horizontal in which you take over companies similar to yours and vertical companies you rely on for supplies and services.

In the late 19th century, a number of populist grassroots movements formed to fight the worst abuses of US monopolies:

Price fixing (gouging consumers with higher price after wiping out your competition)Lobbying and bribing government officials for special privilegesExcessive autocracy – many monopolists (like William Rockefeller) became monarch-like dictatorsBans on union organizing

The first populist movement was the Grangers. Formed in the 1860s and 1870s, it ultimately boasted 700,000 members and 21,000 lodges across the US. It was formed when price gouging by Cornelius Vanderbilt, the railroad czar, caused a number of farmers to lose their farms.

A series of severe economic crashes (caused when private banks deliberately shrank the money supply*) in 1873, 1890 and 1907 gave rise to first anti-monopoly legislation. In 1888 Iowa passed the first antitrust law, making it illegal for monopolies to collude to fix the price or quantity of goods they produced. In 1890 Congress passed the Sherman Antitrust Act.

In 1895 the Supreme Court used the Act to block a sugar company from acquiring four competitors to control 80% of the sugar supply. Teddy Roosevelt used the law in 1911 to break up 40 monopolies, including Standard Oil.

In 1914 congress passed the Clayton Antitrust Act, which was far more explicit in targeting monopolistic behavior. This included price fixing, exclusivity bans against retailers stocking a competitor’s product (eg Microsoft’s requirement for all computer manufacturers to load  Windows software and the Microsoft browsers) and a requirement for corporations to notify the federal government of all mergers.

AT&T was broken up into many smaller companies in the 1980s, reducing phone rates

Since the 1980s, antitrust laws have been less robustly enforced.

The landmark 2001 case (which led Bill Gates to resign as Microsoft CEO) was an exception. After an appeal to the Supreme Court, the Department of Justice reached a settlement in which Microsoft agreed to abandon some of its worst anti-competitive practice (allowing manufacturers to install competitors’ software) on new computers.

The FTC has an ongoing case against Meta for buying Instagram (which was on track to surpass Facebook in user numbers) and Whatsup to eliminate competition.

The Department of Justice currently has antitrust case against Google. It claims their exclusivity contracts with retailers prevents Apple (which has sufficient capacity to do so) of creating their own search engine.

*Vastly increasing their holdings by triggering massive farm foreclosures.