Sometimes the evidence of economic disaster is right in front of your eyes, but you can't see how all the pieces fit together. Then a book comes along to explain things, and suddenly everything meshes.
Cornered: The New Monopoly Capitalism and the Economics of Destruction is that kind of a book.
Barry Lynn from the New America Foundation has searched out all of the hidden monopolies in the world economic system - the economic accumulations of power that allow the holders of such power to control events. Once you've seen how it all works, you can't forget it. As Barbara Ehreneich says on the cover, "Cornered has changed my view of what's going wrong with American capitalism."
Those of us in the book business have witnessed a systematic weakening of the anti-trust laws over the last thirty years. Independent booksellers have been repeatedly rebuffed by the Federal Trade Commission and the Justice Department whenever they tried to get those agencies to prevent monopolization at the retail level. With the government on the sidelines, different groups have taken a run at trying to concentrate power in their own hands. First, it was the major publishers gobbling up their competitors in an orgy of consolidation during the 90s. Then, it was Barnes & Noble trying to acquire the biggest book wholesaler and using its expansion plans to target its most vulnerable competitors. The latest to take to take a run at dominant power is Amazon.com with its effort to lock-in an exclusive role in the e-book business with its Kindle.
Barry Lynn's description of monopolization in the wider economy is like a game of three-dimensional chess with shifting power centers and hidden strategies. But the overall direction of the game is clear. While we may be giving lip-service to open markets and free trade, in fact we're witnessing the consolidation of economic power around the world into fewer and fewer hands. With that power, inevitably, comes an out-sized political power.
The picture Lynn paints includes many examples of what we ordinarily think of as a monopoly - one company's control over a single business. Procter & Gamble, for example, controls about 60% of the detergent market and 75% of men's razors. Luxottica exercises almost total control over the eyeglass market. Anheuser-Busch InBev controls enough of the beer market to force prices up across the board.
But what sets Lynn's description apart is his analysis of the relationship between those horizontal monopolies and the vertical monopolization imposed by Walmart and the other mass merchandisers. What looks like a wide selection in such stores is really a carefully constructed illusion of choice. Using a technique called "category management," the mass market giants assign shelf space to the near-monopolists and use their power to discipline the way everyone does business. If you're not part of one of these big combines, you won't get your merchandise on the shelf. One of the most pernicious effects of this type of monopoly is the relentless push downward on wages and the continual pressure on the smaller firms to send their manufacturing business off-shore in order to stay in the game.
Cornered is rich in these kinds of stories, describing the relentless drive towards consolidation in almost every business and the almost inevitable transfer of power to a few financial giants.