orb@whuxl.UUCP (SEVENER) (04/29/85)
For some time Danny Mck. has asked me to substantiate my claim
that monopoly power poses a very real detriment to the supposed
benefits of the "market" and often leads to contradictions
of the theoretical efficiencies of the "market". (lower prices,etc.)
I have cited historical examples of monopolies like Standard Oil.
The fact that our country has had antitrust legislation since then
to break up such pure monopolies distorts attempts to measure
their stability.
But the problem of monopoly power is not simply the problem of
one company which totally controls a given market 100%. It is
the problem of oligopoly power as well, which is the truly modal
means of production for the top 500 corporations in the U.S.
There is substantial and repeated documentation of the extent
of oligopoly power in the U.S. I have finally sorted through my
books and found some hard facts for Danny Mck and other Libertarians
to chew on regarding monopoly power in todays economy.
From "Monopoly Power and Economic Performance" by Edwin Mansfield:
Percent of Total Sales made by Four Largest U.S. firms in
each Industry, 1962
-------------------------------------------------------------------
80.8 Motor Vehicles 27.3 Primary nonferrous metals
47.3 Aircraft 14.7 Other fabricated metal products
30.3 Other transport equipment 18.1 Stone, clay and glass products
34.4 Electrical machinery 5.2 Furniture and fixtures
14.5 Metalworking machinery 21.2 Lumber and wood products
20.6 Other machinery 37.9 Instruments
40.2 Primary iron and steel 16.3 Miscellaneous manufacturing
42.9 Dairy products 31.0 Drugs and medicines
33.6 Bakery products 28.5 Other chemicals
12.5 Other food 50.2 Petroleum refining
22.0 Textile mill products 48.1 Rubber products
4.9 Apparel 26.7 Leather
20.7 Paper 41.4 Alcoholic beverages
42.0 Basic industrial chemicals 70.9 Tobacco
This is very old data. I suspect that updating it would reveal two
major differences between 1962 and today. One is that market concentrations
in general would have increased. The second is that to the extent market
concentrations have not increased (for example, notably autos) it is
not necessarily due to any development of new competition within the U.S.
but the movement of markets from the national to the global level.
This has not necessarily meant the victory for "free competition" or
free markets however. Many of the international firms which have invaded
U.S. markets from abroad, for example the auto companies from Japan,
have done so with massive government help and intervention.
I think it is rather foolish to shrug off this market concentration and
say it has no effects on economic performance, some bad and some good.
To blindly continue in the "lasseiz-faire" approach is to continue
to believe blindly in a fantasy opposed to reality.
tim sevener whuxl!orbgarys@bunker.UUCP (Gary M. Samuelson) (05/01/85)
> From "Monopoly Power and Economic Performance" by Edwin Mansfield: > Percent of Total Sales made by Four Largest U.S. firms in > each Industry, 1962 > ------------------------------------------------------------------- > 80.8 Motor Vehicles 27.3 Primary nonferrous metals > 47.3 Aircraft 14.7 Other fabricated metal products > 30.3 Other transport equipment 18.1 Stone, clay and glass products > 34.4 Electrical machinery 5.2 Furniture and fixtures > 14.5 Metalworking machinery 21.2 Lumber and wood products > 20.6 Other machinery 37.9 Instruments > 40.2 Primary iron and steel 16.3 Miscellaneous manufacturing > 42.9 Dairy products 31.0 Drugs and medicines > 33.6 Bakery products 28.5 Other chemicals > 12.5 Other food 50.2 Petroleum refining > 22.0 Textile mill products 48.1 Rubber products > 4.9 Apparel 26.7 Leather > 20.7 Paper 41.4 Alcoholic beverages > 42.0 Basic industrial chemicals 70.9 Tobacco I give up; what are these figures supposed to prove? Gary Samuelson