Forum Post: Abuse of Monopoly Power - Proposals

There is something called “abuse of monopoly power”. One very famous example is the Microsoft Explorer trial in 1998. How about Monstanto position in the agricultural industry? What happened to the Department of Justice? Compared to the Explorer case, the Monsanto gravity and enormity seems to be so obvious that the antitrust could have a free lunch (corn based). So, what happened between 1998 and today?

Globalization. Corporations have grown so much wide that they are more powerful and have more leverage than the government or many countries worldwide put together.

No doubt globalization changed world economy, and to keep the pace of this change the regulatory tools need to be updated as well. While in 1998 someone may have argued that regulation can be detrimental to industry, now things have clearly changed.

Corporations are taking billions of dollars out of the economy. The economy of 99% of people. A good comparison to economy is fishing. In fishing industry regulation is used to prevent trawlers to fish at a rate that the fish population get destroyed making fishing un-sustainable in the long term.

Corporations are doing the same with economy. They are trawling money out of the economy substrate. They are squeezing it at the point that it cannot be sustained. And economy is the people. Is the 99% of the people in their everyday life. They can do that because they have grown power and influence at the point that a manifold of corporations have a decision power on economy comparable to or higher than the congress.

And this is not what the constitution foresees for government.

That’s way regulation is now needed and would not be detrimental in this globalized environment. One example is the recent revived proposed bill (Senate, October 3rd) for duties over foreign countries whose currency is “fundamentally misaligned” to the market (China to say). We don’t know if the bill will ever make it, but that’s an example as far as foreign affairs of how bad regulation is needed. But how about domestic affairs?

A wealth economy exists if the tendency is to increase the wealth of the nation not to increase the incomes for a few monstrously rich people. Economists know very well how bad is this mechanism, but a simple-words explanation could be: common people would spend locally mostly, distributing richness and keeping economy going, while billionaires have specific channels in which most of the money flows, and most of it does not come back into domestic real economy. Wall street.

That’s why the proposal for regulation should be something like:

• Strengthen the “abuse of monopoly power” legislation and enforce it, in the effort to reinvigorate the economic substrate. This should be enforced in the whole supply chain verifying the control over prices and leverages to exclude competition, including companies acquisition. • As already pointed out, constraint back as t was before the speculation. Finance has become pure gambling. Return to a prudent banking act, Glass–Steagall Act, or other similar. It is so clear that it does not need much explanation. • This may sound too forward but read it. Companies net revenues should be ceiled to an amount linked to the lower paid salary. This would mean that if company A makes 10 billions by underpaying their employees it can be investigated by antitrust. In a bad economy, job offer can be a position of “abuse of monopoly power”. Think again of the food industry and the conditions of low-paid workers. Applying this regulation would mean that in a very good year with revenues over that ceiling, would see the employees receiving a temporary salary increase for that year in order not to incur in antitrust. And the lowest salaries would be the reference, not the top-manager salaries. • This is already regulated in some countries. Rebuild the broken link between salary and responsibility. And similar to the previous point, ceil the higher salary to a multiple of the minimum paid salary. One thing everybody seems to have forgotten: bigger salary is for bigger responsibilities. So, if a CEO messes up or act in its own interest at expenses of the company interest, he is responsible in fist person with his/her personal belongings. If the company does not provide means to enforce that, it is an “abuse of monopoly power” of the person over the company, abuse of the top-manager over the salaries of the 99%, over the whole economy, and it is a matter of antitrust to investigate why the company did not pursued its interests.

Companies have been invented by man and woman to improve living. They are made to create wealth for families. They were not meant to be a tool for trawling money out of society into closed channels. This is no longer sustainable, and regulation is now needed to return to a wealth economy. The power of a few billionaires should overwhelm the whole country democracy. This kind of government was not foreseen by the constitution.