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July 11, 2020

Robber barons

Opinion

July 11, 2020

Why do big corporations continue to win while workers get shafted? It all comes down to power: who has it, and who doesn’t.

Big corporations have become so dominant that workers and consumers have fewer options and have to accept the wages and prices these giant corporations offer. This has become even worse now that thousands of small businesses have had to close as a result of the pandemic, while mammoth corporations are being bailed out.

At the same time, worker bargaining power has declined as fewer workers are unionized and technologies have made outsourcing easy, allowing corporations to get the labor they need for cheap.

These two changes in bargaining power didn’t happen by accident. As corporations have gained power, they’ve been able to gut anti-monopoly laws, allowing them to grow even more dominant. At the same time, fewer workers have joined unions because corporations have undermined the nation’s labor laws, and many state legislatures – under intense corporate lobbying – have enacted laws making it harder to form unions.

Because of these deliberate power shifts, even before the pandemic, a steadily larger portion of corporate revenues have been siphoned off to profits, and a shrinking portion allocated to wages.

Once the economy tanked, the stock market retained much of its value while millions of workers lost jobs and the unemployment rate soared to Great Depression-era levels.

To understand the current concentration of corporate power we need to go back in time.

In the late nineteenth century, corporate power was a central concern. 'Robber barons', like John D Rockefeller and Cornelius Vanderbilt, amassed unprecedented wealth for themselves by crushing labor unions, driving competitors out of business, and making their employees work long hours in dangerous conditions for low wages.

As wealth accumulated at the top, so too did power: Politicians of the era put corporate interests ahead of workers, even sending state militias to violently suppress striking workers. By 1890, public anger at the unchecked greed of the robber barons culminated in the creation of America’s first anti-monopoly law, the Sherman Antitrust Act.

In the following years, antitrust enforcement waxed or waned depending on the administration in office; but after 1980, it virtually disappeared. The new view was that large corporations produced economies of scale, which were good for consumers, and anything that was good for consumers was good for America. Power, the argument went, was no longer at issue. America’s emerging corporate oligarchy used this faulty academic analysis to justify killing off antitrust.

As the federal government all but abandoned antitrust enforcement in the 1980s, American industry grew more and more concentrated.

Excerpted from: 'Beware the 21st Century Robber Barons'.

Commondreams.org