Anatomy of an Oligopoly: the Beer Industry

Why has the standard of living across most of the Western world fallen by more than half over the past 40+ years? Why is Western unemployment near/at an all-time high, with more than 100 million permanently unemployed people, who are not allowed to work? Why does most brand-name beer taste like swill?

Most readers will see no connection at all between these questions. Some will see a connection between the first and second questions. Very few will see a common link between all three questions. In fact, we can answer all these questions (at least in part) the same way, and the answer is spelled O-L-I-G-O-P-O-L-Y.

For the many people reading this who are unfamiliar with this concept, first a moment for definition of terms. An oligopoly is where a handful of corporations (or corporate fronts) effectively have total control over a particular industry or sector. Once they have such control, such corporations inevitably engage in predatory behavior, such as price-gouging consumers, and bribing public officials in order to obtain preferential treatment.

Such behavior is so common in the corporate world that Western (“capitalist”) societies have some of their strongest laws in place, to prevent any group of corporations from ever acquiring such a choke-hold – our “anti-trust” laws. Unfortunately, our governments have ceased to enforce those laws (except in very rare circumstances), for now more than an entire generation.

Why have Western governments collectively ceased to enforce some of our most-important laws? How have these governments been so corrupted? Again, we can reply to these questions with a single answer: because the largest corporations have (systematically) bribed our public officials, in order to obtain preferential treatment.

We see endless examples of this political corruption, in the service of the mega-corporations, such as in the headline below.

Obama Seeks Trade Deals Sought by Biggest U.S. Companies

Want more evidence? Just look at all of the corporate welfare handed out to these corporate welfare-bums: $trillions every year, in direct and indirect hand-outs. The larger the corporation, the more they mooch.

Our governments slash-and-burn our social programs, renege on pension obligations, and do nothing about extreme unemployment, extreme poverty and the (even more-despicable) epidemic of homeless people, all the while claiming that “we” don’t have the money to continue to properly fund necessary programs. Meanwhile, these same Traitor Politicians can always find a few $billion more (of our money) to stuff into the pockets of their corporate masters.

What is the direct connection between oligopolies, which now infest virtually every sector of our economies, and record unemployment? It’s very simple: large corporations don’t create jobs. Large corporations destroy employment. This was the subject of a detailed, three-part commentary. Those readers who want to read/see the complete explanation of how our large corporations create (massive) unemployment should refer to that previous series.

What is the direct connection between oligopolies, and the collapse in our standard of living? Simple. The collapse in our standard of living has two components: massive unemployment, and the staggering plunge in our wages (in real dollars).

The link between oligopolies and unemployment has already been noted. In addition, oligopolies = low wages (for everyone not in management). Why? It is because, by definition, oligopolies destroy competition, and it is competition which leads to higher wages for employees.