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THE DEMISE OF THE SHERMAN ANTI-TRUST ACT (PART I)

October 24, 2017

THE DEMISE OF THE SHERMAN ANTI-TRUST ACT (PART I)

These days we are involved in petty argument and discussion of how to somehow make our democracy and its economy work for all of us with a petulant and grossly ignorant head of state and his party in control of our government. While arguing about such ultimately trivial matters, we continue to be politically blindsided by secretive means of the rich and corporate class in their now open and blatant rush to monopoly. It’s almost as though the financial sector and their handmaiden corporate structure encourage our discussion of such arcane and irrelevant matter so that our attention is diverted from their continuing purchase of power to monopolize via hordes of lawyers and lobbyists, truckloads of cash, and promises of future jobs to pliant regulators and members of Congress.

Modern-day economists from my all-time favorite, the now-deceased John Maynard Keynes (the British representative at the Bretton Woods Conference in New Hampshire in 1944 where post-WW world economies were discussed and the American dollar was chosen as the reserve world currency) to and through the now deceased John Kenneth Galbraith and to today’s Joseph E. Stiglitz (Nobel Prize Winner), the French economist Thomas Piketty and the insightful Robert B. Reich, have all sounded the alarm of a second Gilded Age that is descending on us by a corporate and banking America engaging in anti-trust activities at breakneck speed. We know that the Sherman Act is not being enforced and we know why. Our representatives in Congress and our regulators have in large part been bought or politically neutered by Big Money, and, after all, anti-trust matters are not nearly so glamorous in the public eye as abortion, tax cuts, terrorism etc., hence public inattention.

Let’s take a quick look at Monsanto as a study in monopoly, only one of many examples (see Apple, Amazon, Comcast et al.) of how monopolists do their dirty work out of sight of ordinary Americans. Monsanto, for example, operating under the grotesquely misnamed “free market” system per Reich, owns the key genetic traits in more than 90 percent of the soybeans and 80 percent of the corn planted in the United States. It patented its own genetically modified seeds with an herbicide that would kill weeds but not soy and corn grown from its seeds and it was initially a boon to farmers – but there’s a catch > the soy and corn that grow from these seeds do not produce seeds of their own, so the farmers have to buy new seeds for every planting season.

Monsanto also requires farmers who have seeds left over that could reproduce not to replant them in the future so that the farmer is effectively hooked more or less permanently into using Monsanto’s soy and corn seeds each and every season. A further monopolizing tactic of Monsanto is to prohibit seed dealers from stocking competitor’s seeds and buying up smaller competing seed companies, thus affording Monsanto the opportunity to raise prices what with little to no competition in the seed business.

So what, the reader may reasonably ask? I’m not a farmer, so I have no skin in this game. Wrong. You have lots of skin in this game, and here’s why. Monsanto’s monopoly status has allowed them to charge far higher prices than the rise in cost-of-living. Reich in his book “Saving Capitalism” reports that since 2001 Monsanto has more than doubled the price of corn and soybean seeds, citing a study which shows that the average cost of planting one acre of soybeans increased 325 percent between 1994 and 2011 while the price of corn seed rose 259 percent.

The reader is as an ultimate consumer paying far more for corn and soybean products found in cereals, salad dressings and other such ordinary groceries and fed to livestock (which raises the price of meat) than he or she would be paying but for the monopolizing tactics of Monsanto. Monopoly status gained by lack of competition invariably raises the price of goods and services to the general public, and why not? The consumer has no choice in a so-called “free market” ruled by monopolists, just as farmers, once hooked, have no choice but to buy Monsanto’s seeds.

The Sherman Anti-Trust Act of 1890 was designed to foster competition and prevent monopolistic practices, among other things. When there is little if any competition, the monopolizing entities can charge any price the market will bear, and they do. Monsanto thus increases the farmers’ costs which they in turn pass on to you and me, and when we pay more for such increased commodities it results in our having less money to pay for other goods and services in the marketplace, thus further negating an already tepid demand in our general economy caused by decades of wage inequality.

How can all this happen when we have an anti-trust act on the books? It happens because the act is not enforced due to armies of lobbyists and lawyers hired by the monopolists to see that it is not in fact enforced, and this includes rules and regulations adopted under the terms of the act. Historically, the act was passed in response to the  unbelievably corrupt tactics of the “robber barons” of the Gilded Age, whose abuse of our economy and our consuming citizens was legendary, which I will discuss in Part II of this essay. Stay tuned.      GERALD       E

 

 

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