During the Industrial Revolution, business exploded in a country that was taking its first steps to becoming modern America. It was during this time that super large corporations began to develop and control the entire market on certain products and industries.
Recognizing the danger these companies could present to a theoretically open market, antitrust laws were passed that decreed that no single corporation could exist without some form of competition. Monopolies were broken up, and the playing field was leveled so that newcomers would have a fighting chance at getting off the ground.
Today, monopolies are still illegal but I think people will agree that when it comes to entry-level competition, the playing field is far from level. Even though the huge chain companies out there don’t technically own the entire market, they dominate so much of it they pretty much eliminate any hope of ever successfully competing with them.
In order for any semblance of competition to survive, I think the government needs to step in again. Limits should be set so that a company cannot grow so incredibly large that it snuffs out all hope of another, smaller company coming into existence. As it is, the larger company can simply afford to slash prices and boost advertising until the fledgling company can’t afford to stay in business any more.
How many corner stores or small outlets do we see that aren’t part of a major chain nowadays? Not many, and the ones that do exist have to cater to a more limited market in order to compete with industry titans. After all, how could a small, independent grocery store survive when there are huge, established industries like Safeway or Trader Joe’s to compete with?
I can hear you saying to yourselves that there are, in fact, examples of this sort of thing happening (I have excellent hearing). And yes, you’re right. But are these really competitors in the true sense of the word? Is Costco worried that the Dollar Tree is going to steal all of its customers? I’d be shocked if they were.
And these are examples of relatively accessible industries too. What if we look at something more exclusive making cars or designing electronics? Can you imagine a small business in those fields that would have any hope of competing with an established company like Ford or Sony?
Even if these huge corporations aren’t monopolies, they are still stagnant. They have their share of the market and they know that’s not going fluctuate wildly like it might if there was a lot of serious competition.
For example, a car company doesn’t need to worry about developing significantly better running technology or fuel economy because they know that nobody else is doing it so why should they bother? They just come up with a flashier, sleeker design every few years that runs on the same old technology. They know people are going to flock to buy it because it looks new and seems to run off air and wishful thinking, but the reality is that it’s the same old polluting engine.Even though these larger companies aren’t monopolies in the true sense of the word, I think we need to take another look at what the law was intended to do and whether we are still accomplishing that goal. Do we have a fair and equal market? Could small businesses survive in an ocean of big fish, or would they be eaten alive?
I think we need to look at ways to ensure that if someone wants to get into these seemingly inaccessible industries, they can do so without being driven out of business. Maybe we need to look at taking these monstrous corporations and splitting them up into smaller or regional branches that have to compete with each other. Maybe there needs to be better ways for new businesses to get going. I don’t claim to have the solution, but I do know that we need to find one.