One of the main justifications for capitalism is that it provides the consumer with competition which by its very nature drives up quality and thereby improves the world.
This may be true, but I think this tendency is less to do with the virtues of the private ownership of capital (which is what it normally comes down to) but the fact that competition is permitted: the fact that for every product or service there is more than one choice.
However, amongst other things, capitalism is now failing to provide the very thing that it is supposed to do and instead we have a world dominated by monopolies. We have one leading search engine (Google), one major PC operating system (Windows), one major database (Oracle), one major online auction company (eBay), one major social network (Facebook) and, to top it all, one major online shop (Amazon).
Most people will now object that for all the things I’ve mentioned there are alternatives. There is Bing, Linux, Android, SQL Server and so on. However, the truth is that most of the alternatives are supplied by one or other of the same half dozen large companies that dominate the world whose proprietors own stocks and shares in one another and who dominate a frightening proportion of the world’s online business (and increasingly gobble up everything that isn’t online). And not to be coy about it, these companies are Apple, Google, Facebook, Microsoft, eBay, Oracle and, heading the list, Amazon.
Before I continue, I would urge readers to follow these links which give what I think is a pretty damning account of Amazon’s dominance in the world:
These steamrollers, driven by a peculiar mixture of Ayn Rand objectivism and West Coast slackness, dominate our age in ways that could scarcely be imagined when thirty years ago Steve Jobs and Bill Gates initiated the Age of the Nerd. Now, the idealism has almost all vanished (bar some vague company slogans and a relaxed clothing style). It’s all about naked capitalism. Taxes are avoided (or paid in tax havens like the Cayman Isles, the Canton of Zog and the Duchy of Luxembourg). Capital is accumulated to be spent on yachts, private planes and seats on future space ships. And worst of all any competition is being crushed as ruthlessly as a beast red in tooth and claw is able to do.
We’ve seen bookshops and record shops eviscerated by Apple’s iTunes and Amazon’s 1-Click. We see supermarkets and clothes shops out-competed by companies that pay no tax and bully suppliers to cut costs (i.e. employees) to the bone. And now we see in the UK that the once proud Post Office is being trampled beneath Amazon’s own delivery services.
There are two responses to all this. One is to say, well, that’s capitalism for you, but at least it means I can buy the latest One Direction album for virtually nothing and I’ve saved a shitload of cash on my wardrobe. And in a world where in wealthy countries like the UK and the US, the majority of the population are still worse off than before the economy tanked (and has now recovered all its previous wealth but distributed it even more unequally). Or we can wonder just where this unfettered monopolism will lead.
I suspect that in the nature of these things that the apparent destination where all of us are nothing but serfs to the hereditary successors of Bezos, Gates, Ellison and Zuckerburg will not actually happen however much that might seem the most likely outcome of the present trends.
The worry is that we may enter a world order of increasing inequality where capital wealth is no longer reinvested into the economies of the world (because tax is not being collected) and where efficient part-capitalist/part-command economies like China, India and Russia may well trample over Anglo-Saxon economies which have allowed themselves to be fleeced by a handful of fabulously wealthy and similarly ruthless entrepreneurs and lost all their public services and safety nets in an orgy of tax-cutting and government efficiencies.
And history suggests that the worse it gets the greater the twang of the elastic band as it snaps back into place. And where there is revolution, there is usually blood, chaos and a wide-open door to a new age of tyranny.