Re­turn­ing to a Gilded age does not bode well for so­ci­ety and its democ­racy

The Woolwich Observer - - COMMENT - ED­I­TOR'S NOTES

THERE WAS A TIME when we wor­ried about the detri­ments of on­line shop­ping. To­day, we’re wor­ried that labour un­rest at Canada Post will de­lay de­liv­ery of our Ama­zon pur­chases.

Brick-and-mor­tar re­tail has in­deed taken a beat­ing, but just like the stream of cheap crap from China, we’re more con­cerned with price and con­ve­nience than with the loss of jobs and lo­cal rev­enues.

Some of that is a nat­u­ral evo­lu­tion – if any­thing to do with the march of cor­po­ratism can be called nat­u­ral – that saw the rise and fall of down­town main streets at the hands of malls, which were in turn sup­planted by big-box stores. All forms of tra­di­tional re­tail are now prey to on­line shop­ping, most no­tably Ama­zon, which has about half of the on­line mar­ket.

That shop­pers are search­ing for bet­ter deals – es­pe­cially in the face of crap­pier jobs, stag­nant pay and ex­plod­ing hous­ing costs – isn’t sur­pris­ing. It’s an­other symp­tom of preda­tory, mo­nop­oly cap­i­tal­ism. Ama­zon and its so­cial me­dia coun­ter­part Face­book are ex­am­ples of the worst kind of rob­ber-baron cap­i­tal­ism that emerged in the Gilded Age that led to the Great De­pres­sion and, even­tu­ally, tougher laws to tem­per the worst ef­fects of an unchecked eco­nomic sys­tem.

The dereg­u­la­tion and cor­rupt pol­i­tics that took off in the 1980s cour­tesy of cor­po­rate lob­by­ists and an un­par­al­leled pro­pa­ganda ef­fort that con­tin­ues to this very minute have cul­mi­nated in a mir­ror of the late 19th and early 20th cen­turies.

“Amer­ica’s Gilded Age of the late 19th cen­tury be­gan with a raft of in­no­va­tions – rail­roads, steel pro­duc­tion, oil ex­trac­tion – but cul­mi­nated in mam­moth trusts owned by ‘rob­ber barons’ who used their wealth and power to drive out com­peti­tors and cor­rupt Amer­i­can pol­i­tics,” ar­gues econ­o­mist Robert Re­ich, a for­mer Sec­re­tary of La­bor in the Clin­ton ad­min­is­tra­tion and now an out­spo­ken ad­vo­cate for change.

“We’re now in a sec­ond Gilded Age – ush­ered in by semi­con­duc­tors, soft­ware and the in­ter­net – that has spawned a hand­ful of gi­ant high-tech com­pa­nies.”

He main­tains the ma­jor cul­prit is big tech firms and their sweep­ing patents, data, grow­ing net­works, and dom­i­nant plat­forms that are bar­ri­ers to new en­trants.

The so­lu­tion is the res­ur­rec­tion of an­titrust laws.

“It is time to use an­titrust again. We should break up the high-tech be­he­moths, or at least re­quire that they make their pro­pri­etary tech­nol­ogy and data pub­licly avail­able and share their plat­forms with smaller com­peti­tors.”

While the cor­po­ratism and re­sul­tant fas­cist ten­den­cies aren’t as pro­nounced on this side of the bor­der, we’re on the same path. We need both the eco­nomic and demo­cratic re­form Re­ich and a host of oth­ers ad­vo­cate.

Those who ar­gue that reg­u­la­tion only hin­ders cap­i­tal­ism – of­ten the same peo­ple who wrongly equate cap­i­tal­ism with democ­racy – miss the point of a so-called free mar­ket. The idea of a free-mar­ket econ­omy is to let the mar­ket de­cide what will be made and in what quan­tity, rather than the cen­tral plan­ning of the com­mu­nist sys­tem, for in­stance. It doesn’t, how­ever, mean free from reg­u­la­tion. How many peo­ple would ar­gue that busi­ness should be “free” to use slaves or child labour? That was once the case in the West, but has been reg­u­lated out of the mix.

Once we’ve es­tab­lished that the mar­ket is an ar­ti­fi­cial con­struct that we’ve de­vised, we’re free to shape it in such a way that it pro­vides only ben­e­fits to so­ci­ety, not harms. The dereg­u­la­tion that fu­elled the cor­po­ratism of the last few decades – think of the rise of glob­al­iza­tion, mo­nop­o­lies and oli­garchies and the re­sul­tant de­cline in our qual­ity of life – fol­lowed a post­war boom that was shaped by a mar­ket sys­tem that was de­vised with the broad pub­lic in mind. It wasn’t per­fect by any means, but far more eq­ui­table than is the case to­day. Dereg­u­la­tion killed that. New reg­u­la­tions con­trol­ling the ex­cesses of the fi­nan­cial sec­tor are needed to put us back on track. The same goes for re­mov­ing cor­po­rate in­flu­ence in the po­lit­i­cal sys­tem.

The De­pres­sion-era safe­guards have been steadily rolled back un­der an avalanche of po­lit­i­cal dona­tions, pay­offs and pro­pa­ganda. The as­sault on the pub­lic good re­ally picked up steam un­der Rea­gan, Thatcher and, here, Mul­roney. Govern­ments have largely aban­doned pub­lic pro­tec­tions against mo­nop­o­lies.

Just how bad things have got can be seen in new data re­leased this week by the the Open Mar­kets In­sti­tute — a U.S. anti-mo­nop­oly think tank — that shows a shrink­ing num­ber of com­pa­nies in­volved in the mar­ket share of a num­ber of sec­tors. Google, for in­stance, con­trols 91 per cent of the $60-bil­lion search en­gine in­dus­try; four firms con­trol 53 per cent of the $218-bil­lion meat pro­cess­ing busi­ness; three com­pa­nies con­trol two-thirds of car rentals, a $40-bil­lion busi­ness; two play­ers – Google and Ap­ple – con­trol 99 per cent of the smart­phone op­er­at­ing sys­tems; and the list goes on, sec­tor by sec­tor.

“Due to ex­treme con­cen­tra­tions of wealth and po­lit­i­cal power, our coun­try is ex­pe­ri­enc­ing se­vere eco­nomic in­equal­ity, stag­nant house­hold in­come, the col­lapse of busi­ness for­ma­tion and in­no­va­tion, and his­toric lev­els of po­lit­i­cal po­lar­iza­tion. This re­port shows that such con­cen­tra­tion is not unique to one or two eco­nomic sec­tors. It is per­sis­tent across a di­verse range of in­dus­tries,” the or­ga­ni­za­tion notes in re­leas­ing the first set of data this week.

“[M]onop­o­lis­tic cor­po­ra­tions of­ten present them­selves as cham­pi­ons of con­sumer choice. But while it may ap­pear as though there are end­less brands to choose from on­line and on the shelf, most are owned by a few large par­ent com­pa­nies, the ar­ray of la­bels a mere façade cre­at­ing the

il­lu­sion of abun­dant op­tions.”

The U.S. is lead­ing the charge on dereg­u­la­tion and a lack of over­sight of bad busi­ness prac­tices, in­clud­ing merg­ers, ac­qui­si­tions and mo­nop­o­lis­tic prac­tices, which are pur­sued as ea­gerly as deficit­caus­ing tax cuts un­der the cur­rent regime. Join­ing in that race to the bot­tom, the Trudeau govern­ment is mak­ing moves to re­duce cor­po­rate taxes fol­low­ing Trump’s lead, a tit-for-tat call that be­gan be­fore the ink was even dry south of the bor­der.

“The econ­o­mist Karl Polanyi un­der­stood that there are two kinds of free­doms. There are the bad free­doms to ex­ploit those around us and ex­tract huge prof­its with­out re­gard to the com­mon good, in­clud­ing what is done to the ecosys­tem and demo­cratic in­sti­tu­tions. These bad free­doms see cor­po­ra­tions mo­nop­o­lize tech­nolo­gies and sci­en­tific ad­vances to make huge prof­its, even when, as with the phar­ma­ceu­ti­cal in­dus­try, a mo­nop­oly means lives of those who can­not pay ex­or­bi­tant prices are put in jeop­ardy,” Chris Hedges writes in a col­umn this week. “The good free­doms – free­dom of con­science, free­dom of speech, free­dom of meet­ing, free­dom of as­so­ci­a­tion, free­dom to choose one’s job – are even­tu­ally snuffed out by the pri­macy of the bad free­doms.”

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