The mo­nop­oly men­ace

THE CON­CEN­TRA­TION OF CAP­I­TAL IN THE HANDS OF A FEW BIG MEN IS MORE OF A THREAT TO BUSI­NESS AND THE FREE MAR­KET SYS­TEM THAN ANY COM­MU­NIST MAN­I­FESTO

Destiny Man - - POLITICS -

The free mar­ket sys­tem is pred­i­cated on the prin­ci­ple of the free move­ment of goods and ser­vices in the mar­ket­place, un­con­strained by any su­per­struc­ture. How­ever, the en­trench­ment of mo­nop­oly cap­i­tal – par­tic­u­larly white cap­i­tal – in the South African con­text has barred the gates of in­dus­try and eco­nomic op­por­tu­nity to many en­trepreneurs and pre­cluded them from com­pet­ing fairly in the mar­ket­place.

To il­lus­trate this point, I re­mind read­ers of the de­struc­tion to en­trepreneur­ship that was caused by the ar­rival of big mo­nop­oly re­tail­ers in the South African town­ship mar­ket. Prior to that, re­tail in the town­ships was char­ac­terised by a mul­ti­tude of small butcheries, su­per­mar­kets and spaza shops that pro­vided a liveli­hood to thou­sands of fam­i­lies. Such en­trepreneur­ship had al­lowed many fam­i­lies to es­cape the cy­cle of poverty.

The ar­rival of re­tail be­he­moths led to the clo­sure of busi­nesses on a scale and at a pace that com­mu­nists and so­cial­ists could never ri­val. Town­ship su­per­mar­kets didn’t close down be­cause those re­tail­ing giants were un­will­ing to com­pete; they closed

“MULTI-BILLIONRAND MINES EX­IST­ING LIT­ER­ALLY NEXT DOOR TO COM­MU­NI­TIES BAT­TLING ABJECT POVERTY ARE A BE­TRAYAL OF THE PROM­ISES OF A FREE MAR­KET SYS­TEM.”

be­cause the power of mo­nop­oly makes com­pe­ti­tion in­her­ently un­fair and un­sus­tain­able for the small guy. They had no choice but to shut their doors.

The crush­ing of en­trepreneur­ship is an­ti­thet­i­cal to the con­cept of the free mar­ket sys­tem, but it’s the in­evitable re­sult of mo­nop­oly cap­i­tal. All the­o­rists – from Karl Marx to Adam Smith and any hon­est thinker – agree that cap­i­tal­ism, by its very na­ture, leads to the even­tual mo­nop­o­li­sa­tion of any in­dus­try.

Marx ar­gues that the cap­i­tal­ist class will be­come ever-smaller, with wealth be­com­ing con­cen­trated in the hands of fewer and fewer men, re­sult­ing in mo­nop­oly cap­i­tal ei­ther tak­ing over its com­peti­tors or elim­i­nat­ing them com­pletely. Mo­nop­oly cap­i­tal de­stroys the premises of com­pe­ti­tion, con­sumer choice and en­trepreneur­ship – the very foun­da­tions on which a free mar­ket sys­tem is built.

THE TRUE WEALTH OF OUR NA­TION

There are sec­tions of our so­ci­ety who’d like us to be­lieve that mo­nop­oly cap­i­tal in Stel­len­bosch and Sand­ton cre­ates wealth for our coun­try and is there­fore de­serv­ing of our pro­tec­tion, but that’s fal­la­cious. The true wealth of SA lies in in­dus­try: in the platinum mines of Marikana, the coal­fields of Mid­del­burg, the au­to­mo­tive fac­to­ries of Port El­iz­a­beth, etc.

It’s in­con­gru­ent with the fun­da­men­tal ideals of a free mar­ket sys­tem that the ar­eas in which pro­duc­tive eco­nomic out­put takes place should re­main poor, while ar­eas with no dis­cernible pro­duc­tive eco­nomic out­put should ex­pro­pri­ate the lion’s share of the prof­its. The phe­nom­e­non of multi-bil­lion-rand mines ex­ist­ing lit­er­ally next door to com­mu­ni­ties bat­tling abject poverty is a be­trayal of the prom­ises of that sys­tem.

Adam Smith him­self ad­vo­cated for gov­ern­ment in­ter­ven­tion to pre­vent the ruth­less greed and ra­pa­cious­ness of mo­nop­oly cap­i­tal­ists. When these cap­i­tal­ists seek to cir­cum­nav­i­gate the free mar­ket in the ser­vice of them­selves, a re­spon­si­ble gov­ern­ment needs to in­ter­vene through ag­gres­sive com­pe­ti­tion laws, pro­gres­sive tax laws and other mea­sures.

Lukhanyo Vangqa is a writer and an­a­lyst. He’s also the founder and con­venor of the Tech­ni­cal & Vo­ca­tional Ed­u­ca­tion & Train­ing (TVET) De­bate Cham­pi­onships.

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