Results tagged “capitalism” from PlanetGreen.org

My Conscious Commitment to a Free Market

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thosedays.jpgCapitalism.

The word conjures up mental images of vast fields of low-lying factories turning out various commodities at unprecedented speeds. A board of directors, assembled on the fourteenth floor of some glass-and-steel temple of merchandising, discussing annual returns. A network of spidery railroads and ship routes and interstate highways, spun first around the continent and then the globe. A 3D model of the "next big thing," revolving slowly in circles on brightly lit screens. Firm handshakes, locked vaults, and indecipherable numbers and abbreviations whizzing by in a procession of green and red lights. An entire culture built around the acquisition of assets and influence alike, a fast-paced game with few rules and a universally coveted prize of market dominance.

However, this conception - of industries dominated by billion-dollar enterprises - cannot rightly be called by the term "capitalism." That word, in its pure and original context, denotes a free market, an economic environment requiring only ingenuity, efficiency, and hard work for success. That was conceived in a time of greater opportunity and untapped resources, when competition and the human drive to improve products, methods and ideas were essential to continued national expansion. That was reality before the age of consolidation, prior to the protracted decline of interpersonal commerce.

The national struggle to preserve capitalism as it was initially envisioned began in earnest in 1890, with the passage of the landmark Sherman Anti-Trust Act. This officially criminalized "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations" (15 U.S.C. §1), and was the first significant recognition of the right to a free economy. Corporate actions such as price-fixing, collaborating to eliminate competitors, and merging to dominate an entire field were thereafter prosecuted as infringements of this right. In the years following the law's enactment, it was used against railroad titans, banking institutions, manufacturers of overpriced necessities, and those seeking to further augment their inherently unequal bargaining power in the making of employment contracts. In 1914, it was buttressed by the Clayton Act, which protected labor unions from the threat of antitrust suits while strengthening the provisions targeted at corporate offenders and their powerful executives. Since then, the government's vigilance in ensuing compliance has fluctuated based on a number of factors, primarily the political climate and the courts' ideological tendencies.

Even though antitrust has dropped out of the national spotlight in the past decades, fair but uncompromising enforcement remains vital to the collective prosperity of both citizens and businesses, spreading wealth across an industry and its workers that would otherwise be concentrated in the coffers of a solitary company.

I. Monopoly Eliminates Jobs

In twenty-first century America, unemployment and low wages are major obstacles in the effort to restore the economy. Deleterious deals such as NAFTA and the proposed TPP shrink the domestic market by exporting jobs, but they are only part of the problem. Consolidation is another major factor in the stagnation of salaries and the dearth of available employment. 

Monopolization is a relatively simple phenomenon: two separate companies, each engaged in the manufacture of the same materials, separately employ approximately five hundred workers each. Then a merger is agreed on, and the number of workers necessary to operate one process, even if it turns out more products than one of the original two lines at a faster rate, will still be significantly lower than the combined total of the existing two companies' workforce. This reduction in the number of open jobs affects a living wage in two ways. Firstly, it lowers the wage outright by increasing the number of willing candidates for extant positions and denying dissatisfied applicants the opportunity to work for a nonexistent competitor. Secondly, it gives the new conglomerate increased power over the prices of its products, decreasing the purchasing power of the already substandard rate.

Though the political promises of the 2016 campaign have largely revolved around statutory increases in the minimum wage and the expansion of welfare benefits, these measures only serve to shift the costs of unlawful corporate practices onto the government. The monopolies have grown secure in their own dominance and lost all incentive to develop or maintain quality products, fair prices and wages, and accountability for any defects in their services, and these surface symptoms of a fundamentally blighted economic system cannot be remedied by relieving corporations of their core social functions and responsibilities.

II. Competition as a Civil Right

The relation between a free society and a free economy has been trivialized in recent years by the classification of antitrust enforcement as a regulatory matter. Violations of the Sherman Act are treated as mala prohibita - acts which are made illegal by statute, but which are not inherently immoral - and corporate convicts can officially expiate their wrongdoing with insignificant fines, suspended or nonexistent sentences, lenient civil settlements, and a complete lack of censure from their peers. The quiet and comparatively painless resolution of cases in an administrative and private, rather than adversary and public, venue fails to discourage recidivism and prevent similar transgressions by other companies. Therefore, though the streamlining of the process has facilitated secretive and speedy settlement, it has led to grave mistakes in the way monopolization is perceived and prosecuted.

The Due Process Clause of the Fifth and Fourteenth Amendments explicitly safeguards "life, liberty, and property," unequivocally prohibiting unreasonable encroachment on the right to acquire and maintain private assets. This is a double-edged statement, however, and its meaning has varied with the vicissitudes of over two hundred years of social changes. In the past it has been interpreted to preclude any regulation interfering with absolute "liberty of contract," even such essential measures as the minimum wage, the eight-hour day, and the Sherman Act (see Lochner v. New York, 198 U.S. 45 (1905), Morehead v. New York ex rel. Tipaldo (298 U.S. 587 (1936)). After the ensuing corporate lawlessness and rampant monopoly led to the Great Depression, this dogma was re-examined, and it was conclusively established that "the Constitution does not make conspiracy a civil right." Dennis v. United States, 341 U.S. 494 (1952). In its modern meaning, the Due Process Clause simply preserves the right to economic as well as political pluralism.

The liberty to conduct business without interference or intimidation from larger and more powerful private entities remains a vital constitutional right, however. See Vietnamese Fishermen's Ass'n v. Knights, 543 F.Supp. 198 (S.D. Tex 1982). Title 42 U.S.C. §1983, part of the Civil Rights Act of 1964, conclusively provides:  "Every person who... subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress."  The elimination of racial discrimination, the Act's main purpose, has largely been achieved - but its broader objective, the protection of equality on all fronts, requires a freedom of enterprise incompatible with the industrial oligarchy that defines our current economic landscape. The fight for our fundamental civil rights has resulted in monumental progress on multiple fronts, but it is far from over; our country cannot be truly free as long as this neglected element of due process is violated openly and daily.

Conclusion

To meet the burden of proof in antitrust cases, plaintiffs must "present direct or circumstantial evidence which reasonably tends to prove that the [defendants] and others had a conscious commitment to a common scheme, designed to achieve an unlawful objective." Monsanto Corp. v. Spray-Rite Serv. Corp, 465 U.S. 752 (1984). To honor the provisions of the Sherman Act by showing an equal level of "conscious commitment" towards a lawful and progressive objective, I am hereby launching a series to expose monopoly, explore the statutes that govern it, and examine the enforcement process in this country.

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