Image: J. Greville

The Final Form of Capitalism

I recently read Holly Wood’s article, The Kids are Socialists because Capitalism is Dickslapping the Planet (and, of course, the crazy conflicting flux of comments) and it brought to mind an old thought I’ve had about the end goal of capitalism — or rather corporate capitalism.

One company to rule them all.

The biggest fans of capitalism always point the idea of competition in a free market, and seem to place all their hopes and dreams in that basket. Free market competition is a good idea (sometimes!) and basically means that as long as competition exists for consumer attention and dollars, companies will inevitably work toward consumer interest. In other words, whoever offers the best deal to the consumer gets their business. But here’s the dirty little secret about free market corporate capitalism: it doesn’t work when companies collude and merge.

Before we go any further, there’s something that needs to be stressed. When we talk about the free market working, what we mean is the free market benefiting the consumer. Many people think that a free market works when it benefits corporate profits, but those should (ideally) be a by-product of consumer benefit. The free market, as an idea, is all about the consumer. And if the consumer isn’t seeing any benefit, than the free market isn’t working.

Competition, of course, is the key to the free market working at all. There has to be a resource companies are competing to get (consumer cash), and there has to be an effort to outdo each other to get that resource. But that isn’t how several markets have worked for many years now. The telecommunications industry in Canada, for example, has consistently engaged in price signalling, offering the exact same plans to customers with no obvious effort to outdo each other or offer a better deal. Canadians, subsequently, pay some of the highest telecom fees in the western world. Instead of the free market working in favour of the consumer, companies are using it in a race to the bottom to see how little they can offer, compared to the other guy.

More often than not, this means an increase in price, not a decrease. When a competitor raises their prices on a product, companies see it as an opportunity to raise their own. If the free market was working, the opposite would be true. Obviously, there are always other factors at play, but at the end of the day this notion runs counter to the idea of the free market.

A lack of competition between companies ultimately culminates in one of two things: either an illusion of choice that doesn’t benefit the consumer, or a single corporation that emerges when several non-competing companies decide it’s more profitable to merge. Why fight for consumer dollars when you can team up and take them?

Here’s the truth: corporations hate the free market. Free market competition runs counter to the idea of corporate profits.

They don’t want to compete for your dollars. They want to set a price, and they want you to pay it. Working together to undermine the free market, or to find the highest possible price they can charge for the lowest amount of service, is how they make money. This isn’t a nefarious scheme or Machiavellian secret. Corporate interests run counter to free market interests by definition. And it’s time we started acknowledging that.

And this brings me to the old idea about the end goal of capitalism: one company to rule them all. The idea that different corporations can and will eventually merge and combine to a point where there exists only one company — one mega-corporation with a monopoly over all markets.

This is a common idea in dystopian fiction — let me stress that again, dystopian fiction — because of how horrifying it is when you think about it. What power would a single corporation that massive wield over governments that already succumb to the whims of lobbyists? What value would human life have outside of corporate interest?

Holly Wood’s article condemns capitalism in favour of socialism, and her strong condemnation keeps bringing me back to this idea about a single monolithic company.

Because if you support capitalism over socialism — and specifically, capitalism without social safety nets or government regulation — than this seems to be the place it will end up. Whether or not a western government can even function in such a world is another question entirely, and I think there’s plenty to support the idea that it might not.

One world, one company. One terrifying future.

If there’s no dollar amount attached to your life, then what good is it?

If a company has no competition — if the free market doesn’t exist — then what good is capitalism?

One world, one company.

Ironically, the end result of capitalism is the end of capitalism.

Who woulda thunk it?

See, the larger point I guess I’m trying to get at, and the reason the idea of this single, mega-corporation keeps eating at me, is that so many people seem to argue in favour of capitalism and the free market without ever addressing the problems we see arising within those systems.

You can’t argue for free market capitalism if you aren’t also doing everything in your power to insure proper competition. You can’t argue for reduced regulation when that regulation is the only thing keeping the free markets active. You can’t define the health of the free market by the health of corporate entities, not consumers. You can’t defend capitalism by working toward a goal that ultimately destroys it.

In the end, this rant is a lot like my last one about small government. The idea of a single worldwide corporation worries me because of the steps I see us already taking to get there. This where government regulation is needed. Capitalism can be a terrifying, soul-crushing mess, but when properly regulated by a government in the interests of the people (i.e. consumers), it can work and has worked.

While I ultimately favour socialism over capitalism, something akin to Bernie Sanders’ democratic socialism is a good example of the two working well together. Big business and small business can still exist and thrive. The rich can still be rich — you can still accumulate wealth. But the free market can and should be regulated in the interest of the people.

Because corporations will never, ever truly support the free market. It runs counter to every principle they operate on.

And until capitalists and pro-capitalist politicians admit that their pro-corporate leanings conflict with their admitted free-market ideologies, the dystopian corporate monolith is a danger we’ll always face. And even if we never get there, even if we never truly reach the logical conclusion of capitalism, my larger point still stands — the closer we get there, without proper regulation, the worse things will be. Holly Wood’s article is a great example of how bad things already are.

The final form of capitalism without free market support in the interests of the consumer is terrifying. But with consumer-focused regulation, capitalism can exist without being the boogeyman.

Whatever form capitalism takes in the future, government regulation will define whether its a social good or not.

Until then, my only hope is that capitalists will be honest about the problems their system is facing.

Because if the final form of capitalism is an ouroboros, choking on its own tail until it dies, then maybe the issue is capitalism in the first place.