Showing posts with label monopoly. Show all posts
Showing posts with label monopoly. Show all posts

Saturday, August 29, 2026

How Grass Breaks Concrete

In my last few posts, I have discussed the evil foundations of the wealth of the world's richest people.  The loudest-mouthed man among these is of course Elon Musk.  A few months ago, Musk's fanboys (a.k.a. "flying monkeys") proclaimed him the world's first trillionaire, although a more recent valuation shrank the value of his holdings to "only" $684 billion.  Nonetheless, most pundits rank him as the world's richest man.  But Musk is a typical example of all of the world's richest people, in that the wealth of them all is built on similar foundations.  In particular, I wish to point out wealth obtained by exploiting defenseless human beings as well as monopolistic and monopoly-building practices as key elements of those foundations.  Let's zoom in on monopolistic and monopoly-building practices in today's post.

First, let's quickly define a monopoly as a market in which most of the goods or services sold in that market come from a single provider.  In the limit, all of the goods or services come from only one provider.  If this provider is a true saint, then he or she will provide the goods or services at high quality and at a price which can easily be borne by those who need these goods and services.  But monopolists usually are not saints.  Nor do saints usually create monopolies.  So monopolists naturally tend to charge the highest price they can get away with in order to provide the trashiest goods and services they can get away with, so that these monopolists can reap the highest profits they can get away with - even if the combination of high price and trashy quality eventually bankrupts most buyers in the market.  

Monopolies can arise seemingly naturally under certain circumstances.  For instance, in the North American West in the 19th century, executives of powerful railroad companies argued that their monopoly control of certain transportation markets was a natural outcome of the railroad business and therefore should not be opposed or interfered with.  This argument seems to have a certain validity in that sometimes the introduction of a transformative new technology like rail transportation requires so many resources that only a few players can enter the market for this new technology.  Thus a hundred-acre dirt farmer in 19th-century Iowa would not have been able to afford building his own railroad.  To consider space travel as another example, it is certainly true that for a long time, the only entities that were capable of sending rockets (and eventually humans) into orbit were the governments of large and wealthy nations.  Thus a 1960's geeky kid in a working-class family would not have been able to build her own rocket to fly to the moon.  However, it is also true that those players who were able to dominate capital-intensive new markets frequently did so not only because these markets required a potential player to have lots of resources, but also because some of these players relied on dirty tricks.  To see how this played out in the 19th-century North American railroad market, please read "For tech giants, a cautionary tale from 19th century railroads on the limits of competition", The Conversation, March 2018.

I would argue that it is these dirty tricks that are the dominant factor in the creation of the most recent monopolies and oligopolies which have dominated both the American and global economies over the last five or six decades.  One particular dirty trick is the use of "predatory pricing", which is the practice of a player entering a market in order to destroy competitors by selling the goods offered in that market at a price below the price at which other players can offer those same goods.  What is interesting is that the wanna-be monopolist player need not be a very big business at first - just as long as he or she has a huge cash reserve backing him or her up.  That way, he or she can stay afloat even while selling at a loss for a long time, while driving his or her competitors out of business due to the fact that these competitors cannot afford to stay in business if they don't sell at or above a certain price point.  

The harm caused by predatory pricing and the role of this pricing practice in the building of monopolies has been well-documented.  In December 2024, the U.S. Federal Trade Commission (under the outgoing presidency of Joe Biden) hosted a virtual workshop titled, "Competition Snuffed Out: How Predatory Pricing Harms Competition, Consumers, and Innovation."  The topics discussed in this workshop are also captured in a January 2025 article written by Stacy Mitchell of the Institute for Local Self-Reliance titled, "Competition Snuffed Out: Stacy Mitchell Testifies at FTC Workshop on Predatory Pricing."  Mitchell starts out by describing the predatory pricing practicing of the Amazon businesses of Jeff Bezos over the last 30 years.  But Amazon is by no means the only near-monopoly which has been built over the last several decades in the U.S.  There are also Wal-Mart and other large retail chains which wiped out many locally-owned mom-and-pop small convenience stores, as well as the Whole Foods "health food" store chain which wiped out many locally-owned smaller countercultural health food stores.  There is Uber with its predatory pricing and exploitation of so-called "independent contractor" drivers which wiped out many local taxi companies.  (By the way, at last count, there was a rape or attempted rape in an Uber vehicle every eight minutes in the United States.)  I would also argue that this may be true of the iFixit national electronics repair store chain, although I don't have concrete proof.  Yet all of the businesses I have named in this paragraph are examples either of monopoly or of oligopoly in the making.

I would therefore also argue (as I have in a recent post) that Elon Musk's SpaceX company is an example of attempted monopoly-building via predatory pricing.  Based on a link I provided in that recent post, Musk is selling access to low earth orbit (LEO) at a price per kilogram of payload that is significantly lower than the price at which other launch providers are able to send satellites into LEO.  However, we also know that SpaceX is a money-losing business which has most likely not paid U.S. taxes since it was founded in 2002.  (See also "The Final Frontier of Tax Avoidance: Elon Musk’s SpaceX Has $1.9 Billion to Gain from Defunding the IRS", Matthew Gardner, Institute on Taxation and Economic Policy, June 2026.)  Thus Musk has a number of ways to cushion the pain (which I'm sure he hopes will be temporary) of selling high-value goods and services at a loss!

Now we can certainly decry and condemn the desires and goals of those businesses which engage in predatory pricing in attempting to create monopolies.  And we can also decry and condemn the effects which these monopolies have on the rest of us once these monopolies are firmly established.  But we must also ask what kind of people we ourselves are that we allow such predatory arrangements to arise in the first place.  To quote Gene Sharp once again,
"Under the dictatorship the population and civil institutions of the society have been too weak, and the government too strong. Without a change in this imbalance, a new set of rulers can, if they wish, be just as dictatorial as the old ones."  
And,
"Dictatorships usually exist primarily because of the internal power distribution in the home country. The population and society are too weak to cause the dictatorship serious problems, wealth and power are concentrated in too few hands. [Emphasis added.]  Although dictatorships may benefit from or be somewhat weakened by international actions, their continuation is dependent primarily on internal factors."
Dictatorships can be entirely governmental, or they can start out as economic hegemonies that morph into political hegemonies.  And note that what Gene Sharp says about governments that are too strong applies just as firmly to businesses whose owners become too rich, even if the governments in the nations where these rich people reside are weak.  Thus do greedy piece-of-garbage heads of business like Mark Zuckerberg, Travis Kalanick, Elon Musk, or Jeff Bezos become the backers of piece-of-garbage heads of state like Donald Bump and political parties like the Rethuglicans.  But these people can become powerful only if we give them that power.  We too frequently give these people such power by being lured by the store-on-every-street corner convenience, the glitzy gizmo features, and the too-good-to-be-true low prices of their wares.  This convenience, functionality and cheapness act as a sort of bait - rather like the sugar water in certain commercially available ant baits.  However, the poor witless ants who chow down on that sugar water fail to notice that it's laced with borax.  And it's the borax that kills them.

I have mentioned the Institute for Local Self-Reliance, which is an organization which seeks to use advocacy and political action to eliminate monopolistic and predatory practices in the American economy.  I am all in favor of their aims and goals.  Yet it seems to me that trying to use policy recommendations, advocacy and political action to achieve such goals in these days is about as hard as trying to build my own transcontinental railroad or to build my own rocket to fly to Mars.  To me it's much better and more direct to figure out on a personal and local level how to decouple from a predatory economy.  What can I do at a grassroots level to achieve this?  My answer to this question is as follows: Become frugal and learn to be content with what I have.  Learn to be personally self-sufficient.  Learn not to need or want certain things or to buy things from certain people.  (For instance, I haven't bought anything from Target or Amazon in a long time!)  And find other like-minded people in my local community and in my circle of acquaintances with whom I can form small localized collectives of communal self-reliance.  If enough of us follow this path, we will be to the monopolists what grass eventually is to concrete - namely, a soft, subtle, yet eventually shattering force - an ineluctable, silent, bottom-up change that does not become noticed until it's too late for those at the top.

Saturday, August 8, 2026

Humpty Dumpty Part 2: Musk's Further Fallacies

I hinted (not so subtly) in my last post that Elon Musk likes to brag about solving the impossible problem of achieving cheap space flight because he wants to boast of being a totally awesome dude who is smarter than all the rest of us.  I also mentioned that Elon Musk's company SpaceX developed fully reusable orbital launch vehicles in the 2010's.  

However, on further examination I found that this is not true.  SpaceX has not, I repeat, has not developed the world's first fully reusable orbital launch rocket.  In fact, no one has.  It turns out that Musk has merely promised that SpaceX is on the verge of developing the world's first fully reusable rocket.  In an article by Stephen Kuper published in SpaceConnect Magazine in November 2025 titled "‘Next year’ Musk predicts ‘full reusability’ rocket imminent", Musk himself admits that his company has not achieved full reusability yet.  At best, his rockets are only partially reusable.  Also, there is an interesting piece also published in 2025 in Intereconomics Review of European Economic Policy titled, "The Missing Rocket: An Economic and Engineering Analysis of the Reusability Dilemma in the European Space Sector".  This article provides a further examination of the economic viability of reusable orbital launch systems like the SpaceX rockets, and discovers that these rockets have certain unaddressed economic liabilities.  

Lastly, it must be mentioned once again that SpaceX is a money-losing business despite its frequent rocket launches.  It may be that at least part of SpaceX's losses are due to a company policy of predatory pricing in an attempt to drive competitors out of business.

Sunday, March 26, 2023

Precarity, American-Style: Causative Factors

Today's post is a continuation of my series of posts on the subject of precarity.  Today's post will be rather short, since I don't have much time.  However, when considering the state of precarity in which an increasing number of people in the United States now live, it is helpful to study the occupational and economic factors which have led to our present troubles.  As we study economic precarity in the United States, we should therefore consider the following factors:
  • The decline of small businesses in the U.S.  This has been due to "the tilting of the playing field to favor massive companies over small businesses," as reported in a 2020 article by Business Insider.  (See also "Monopoly Power And The Decline of Small Business" for a 2016 snapshot of the problem.)  Note that the laws passed by the U.S. Congress and the executive orders issued under the Trump administration only made this worse.  However, the Biden administration has begun taking steps to reverse small business decline by helping small businesses compete for Federal work, as reported by the Federal News Network in a 2023 article.

  • The shifting of tax burdens from the rich to the poor.  A striking case in point is the number of states (red states, particularly) whose legislatures and governors have turned them into tax havens for the rich.  (See also, "How the Ultrawealthy Devise Ways to Not Pay Their Share of Taxes," NPR, August 2022.)  Thus these states have come to resemble enclaves of dirty money that are found in the Cayman Islands.  Note that the U.S has recently surpassed the Caymans to become the "world's biggest enabler of financial secrecy" as reported by the international Consortium of Investigative Journalists in May 2022.  But these are merely one part of the overall shift of tax burdens away from the rich which began in the 1980's under Ronald Reagan.

  • The use of monopoly and oligopoly power to create monopsony and oligopsony labor markets.  We all know that a monopoly is a state in which there is only one supplier of a particular good or service which is needed by many buyers.  The monopolist can therefore charge whatever price he wants, even if the price is horribly unfair.  Oligopoly is the condition in which there is more than one supplier, yet the total number of suppliers is very small.  Examples of oligopoly include Airbus and Boeing among aircraft manufacturers, or Microsoft and Brave and Alphabet (owner of Google) among Internet search providers, or CVS and Walgreens and Rite-Aid among drugstores and pharmacies.  A monopsony, by contrast, is a situation in which there is only one buyer of a good or service which is offered by many suppliers.  An example of this is a situation in which there is only one employer who can offer jobs to people in a large geographical area.  Thus the many people in this area become horribly dependent on the one large employer, and if that employer uses his power maliciously or suddenly goes out of business or decides suddenly to cut costs, many people will be devastated.  Oligopsony works the same way.  Monopsony and oligopsony are the natural outcome of monopoly and oligopoly.

  • The shifting of regulatory burdens from large businesses to small businesses.  A prime example of this is the case of trying to use your own personal car to earn money by giving people rides.  Most cities and states have laws that prevent you from doing this as a private individual.  In this case, there are only two legal ways you can earn money by giving people rides: go to work for a taxi company, or become an "independent contractor" for a multibillion-dollar ride-hailing service such as Uber or Lyft.  The regulatory burden on these ride-hailing services is very small, as seen in the cases of ride-hailing drivers who are injured on the job, or passengers who are sometimes assaulted by the ride-hailing drivers.  Regulatory burdens are now crafted by state and local legislators for the purpose of expanding opportunities for big businesses by smothering small businesses who can't afford the costs of regulatory compliance.

  • The innovation-depressing strategies of big businesses.  It can be argued that once a monopoly or oligopoly economy is established, the big players in such an economy will tend to fear innovation, since innovations can be disruptive and can even destroy the pre-existing monopoly or oligopoly arrangement.  Thus it is no surprise that large businesses (and wanna-be large business owners) have evolved egregious strategies to stifle any potential innovations that might threaten their interests.  One such strategy is the misuse of the "non-compete agreement."  These are agreements which employees force new hires to sign, in which the new hire typically agrees not to work for any other business or start their own business within a certain time frame and within a certain geographical area.  Certain versions of these non-compete agreements also force the employee to give up all rights to any invention or intellectual product which the employee may devise while employed by his employer and for a certain time period after the employee stops working for the employer.  (If you work for such an employer, I can understand why you would not be motivated to think very much while on the job!)  The abuse of non-compete clauses in employment contracts has moved the Biden administration to start taking steps to ban them (see this also), which should provide immediate relief from employers who want to try to turn their employees into personal property.
Future posts in this series will examine these factors in more detail, along with other factors such as the absence of single-payer health care coverage in the U.S.  But for now, consider these factors as the means by which the wealthy in this country seek to prevent the American precariat from building individual and collective self-reliance.