In the News June 10
Consequences of Concentration of Wealth and Power in Fewer Hands
Behind Moves to Strengthen the Competition Act
The concurrent surge of price inflation and profits for big corporations has brought forward calls to curb the power of the monopolies. The demand has come from all quarters but significantly from a section of the business class.
To placate their friends and at least appear to be taking some action on the issue, the Liberal/NDP cartel party government proposes “to strengthen the Competition Act.” Many are not impressed. An item in Reuters entitled “Canada’s move to bulk up antitrust muscle may miss root of problem” features a critical letter from the Canadian Bar Association (CBA). The letter directed at the federal Minister of Innovation, Science and Industry, François-Philippe Champagne challenges the government’s proposals.
Speaking to the contents of the letter, Omar Wakil the CBA’s chair and president and partner at law firm Torys LLP said in a Reuters‘ interview, “Whether and why there are monopolies in markets are factually, legally and economically complex questions. So I don’t think one can simply state that there are monopolies and that is because of a problem with the competition laws.”
Wakil’s criticism is significant not for its content, which contains nothing new, but from the fact it comes from a particularly well-connected and powerful group within the ruling elite. Torys LLP is prominent in Canada as one of the original “Seven Sisters” — a group of Canadian business law firms that fashioned a monopoly presence in the field of business law and politics. Torys LLP alumni include the founder’s grandson John Tory, the current Mayor of Toronto and former leader of the Progressive Conservative Party of Ontario; Robert Prichard, current Chairman of the Bank of Montreal; Anita Anand, Canada’s Minister of National Defence; Frank Iacobucci, former Justice of the Supreme Court of Canada; John B. Laskin, Justice of the Federal Court of Appeal; Robert P. Armstrong, former Justice of the Court of Appeal for Ontario, and Bill Davis, former Premier of Ontario. The original Seven Sisters have themselves been affected by the spontaneous imperialist forces of concentration. They have shrunk to five and are currently being overwhelmed with the size and power of a handful of U.S. global law firms.
They are advocating on behalf of the many businesses that want more from the government than posturing on the issue of prices as they feel the sting of monopoly prices and price-setting. The Reuters‘ article says others have picked up on the issue and want action: “Nearly a dozen consumer advocates, academicians and policy experts contacted by Reuters said the government’s efforts to break monopolies in Canada were much needed, but they argue the proposed rule changes would fail to undo the damage to consumers from years of big mergers, as the new rules are unlikely to lead to the breakup of large corporations.”
The concern arises from the harm monopoly prices and profits exact not only on the overall economy but to specific private interests of owners of enterprises for they are consumers as well as producers. For example, every enterprise in the course of doing business must deal with the big banks and telecommunication companies.
Reuters writes, “Waves of industry consolidation over the decades have resulted in fewer choices for customers from telecoms to banking, with Canadians paying the world’s most expensive mobile phone bills and forking out more for everyday banking, consumer advocates say. In Canada, six big banks including Royal Bank of Canada and Toronto-Dominion Bank control 80 per cent of the total assets in that industry. In the Canadian telecom field, the top three companies — Rogers Communications Inc, BCE Inc and Telus Corp — account for almost 90 per cent of the revenue.”
All enterprises must pay to “digitize” their businesses and this leaves them at the mercy of the three telecom monopolies mentioned in the Reuters‘ article. One of those, Rogers, is poised to seize the last major telecom company standing in western Canada, Shaw Communications.
Reuters continues, “The top two grocers, Loblaw Co Ltd and Sobeys Inc have a 50 per cent market share as measured in number of stores. Sobeys is owned by Empire Company Ltd. Consumer advocates have argued that the growth of big businesses in Canada is stifling new entrants.
“As Canada embarks on digitizing its economy, new antitrust laws are needed to avoid the old economic model that created monopolies, according to Denise Hearn, a senior fellow at the nonprofit American Economic Liberties Project. ‘Canada’s economy has become heavily concentrated in the last decade,’ said Hearn.”
The Economy Needs a New Direction Based on a Modern Aim
“To avoid the old economic model” requires a new economic model, not a rehash or reordering of the old that in the end changes nothing. The old economic model of monopolies was identified as moribund more than a hundred and twenty years ago when Lenin wrote his seminal work Imperialism, the Highest Stage of Capitalism. It is totally parasitic. A new economic model came into being with the successful socialist revolution in Russia in 1917. The new economic model in conformity with the new socialized productive forces bases itself on cooperation for the benefit of all, not competition for the benefit of a few to become rich. The powerful forces of the old economic model saw their demise in the new economic model and mobilized their global resources, including the Nazi/militarist forces of Germany and Japan, to crush the new militarily and ideologically.
The Old Mobilizes the State to Crush its Competitors and Others With Legal Means and War
Political power reflects economic power. The already existing monopoly power of the big telecoms enlisted their political representatives in the cartel parties, governments and mass media to orchestrate an anti-China hate campaign to “stifle a new entrant” in their sector from doing business in Canada — the Chinese telecom Huawei. Going beyond stifling to eliminating Huawei in Canada consolidates the control of the big three telecoms giving them the power of monopoly pricing and profits. This is how oligopolies work to set prices and keep power in their hands.
The decisive aim within the imperialist economy is to become richer and richer by all means possible. Once an enterprise has achieved a certain dominance in a sector, the power becomes a weapon to control prices to enhance profits, buy political representation and favourable mass media coverage and eliminate any emerging competition.
Monopoly power knows no political boundaries and moves its social wealth throughout the globe in a relentless search to become richer and more powerful. It wipes out competitors globally in similar ways to within its home base leading to anarchy, violence and endless wars. Wherever it cannot control or force some country, it destroys them such as Afghanistan, Iraq and Libya or puts them under relentless pressure from sanctions and boycotts such as Cuba, the DPRK, Iran, Venezuela, Nicaragua and now even Russia.
The Impotence of Regulations in the Neo-Liberal World
On the political front of taking on the power of the monopolies Reuters writes, “In the past, regulatory battles waged by the (Canadian Competition) bureau have met with only limited success. Of the more than 1,500 mergers the bureau has reviewed since 2009, only eight were challenged. Of those eight cases, six were lost or settled, according to a Reuters‘ analysis of official data. The two other cases are pending. Canadians paid the highest mobile bills in the world in 2021, according to a report by Rewheel, a Finnish telecom research firm. A 4G and 5G mobile plan for 100 gigabytes was 13 times more costly than it is in France, it said.”
Despite the dismal record, Canada’s Commissioner of Competition Matthew Boswell remains undaunted that his agency can be effective. He says his bureau can play a significant role in battling price inflation that has raced to a three-decade high. “Open, competitive markets are critical to keeping prices in check,” he said in a speech at the Centre for International Governance Innovation in late May.
But “open competitive markets” are not what exist and have not existed for decades in almost all sectors of the economy. With new productive forces and industries such as the Internet, the spontaneous power of concentration and the vast accumulated wealth of the global investment cartels soon result in the dominance of monopolies such as Microsoft and Apple. With their power established, the monopolies devour any emerging competition or simply wipe it out. The imperialist elite do not revere competition in practice but use its so-called power of innovation and to keep prices in check as propaganda against moving to a new economic model based on cooperation for the benefit of all.
The contradiction in Commissioner Boswell’s words with the reality of the economy and politics is apparent. The economy itself is interconnected and socialized and thrives on cooperation not competition. The problem lies with what social forces control the economy and for what aim. The control of the rich and their singular aim to become richer and richer at the expense of and in competition with others lies at the heart of the problem. The rich cry out that they cannot cooperate with others unless they serve their private interests. Besides, they say, “most are working people who have claims that deprive me of the wealth I crave.”
The rich do not look to cooperate with others but seek to control, use or eliminate. Any cooperation they may want is of the nature of a U.S. imperialist “coalition of the willing” — oligopolies comprised of two or more monopolies which dominate a field, form cartels and coalitions to get laws and regulations changed, fix prices, get involved in trade wars, crush a competitor or someone who will not go down on their knees. This causes tensions, crises, destruction and endless wars.
New thinking, a new aim and new direction are needed in conformity with the modern socialized productive forces. The aim cannot be to become richer at the expense of others but to develop and make progress to lift up everyone and society for the benefit of all and Mother Earth herself. For this to happen the people themselves have to see the necessity to become political in a manner which favours their interests. They have to confront the forces of the old by settling scores with the old conscience of society — the old way of doings things. The narrow private interests that today dominate economic and political affairs have to be replaced by working out a new way of doing things in all sectors of the economy, in political affairs and on every front of human endeavour.
TML Daily, posted June 10, 2022.
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