dispatchesfromtheclasswar:Let me take a moment to talk about Rober Michels’ theory of the Iron
dispatchesfromtheclasswar:Let me take a moment to talk about Rober Michels’ theory of the Iron Law of Oligarchy & how it applies to capitalist economies.Capitalism = companies competing in the same market, which is supposed to “drive innovation” and “incentivize providing the best quality products at the lowest cost to consumers.” Yet in 2022, consumers & their hungry babies can’t get any baby formula, regardless of quality or price. What up?Well, as companies compete, some fail and go under. Successful ones eat up that market share & get bigger, or sometimes buy up their less-successful competitors. The process continues over and over until you wind up with 3-6 megacorporations that control an entire industry. They’re too big to be driven out of business or be bought by their competitors. Market share freezes between the megacorps. They’re each as big as they’re gonna get and their equally-big competitors are too big to be taken out.Once any industry reaches this point of complete oligarchic control (and in 2022 that would be most industries), you can kiss innovation goodbye - there’s no motive for it. Improved product quality/lower prices now get traded off for open collusion & price-fixing between the megacorps.This is the inevitable end result of capitalism! The system is set up to produce this result - of bloated oligarchies stifling competition & innovation and distorting the market to serve their own interests - in virtually every industry.Case in point: now that just three companies produce infant formula, they’ve decided there’s no profit in it, so there is no formula to be had. Sure, someone could start a competing baby formula company by setting up a factory to make baby formula + establishing a distribution system to get that formula on store shelves, but how much would that cost, how long would it take, and how would the Big Three baby formula makers react? They’re big enough to freeze any upstart completely out of the market. Capitalism + the Iron Law of Oligarchies = babies going hungry. -- source link
#oligarchies#baby formula#economics