Barry C. Lynn, 2010. John Wiley & Sons, Inc.

Reviewed by Doris Lee

‘Too big to fail.’ This is the succinct reason given for the US government to bail out the US auto industry in 2008 with taxpayers’ money, when it was clear that the whole industry was suffering from reduced sales and was at the point of bankruptcy. It was a huge injustice to workers as well as taxpayers, yet citizens were otherwise faced with a real threat of nation-wide crisis, and effectively held hostage by it.

This is just one of the examples that Barry Lynn uses to illustrate the harmful effects of allowing monopolies in a society to develop – in this case, the US. This book thus builds on the thesis of his previous book End of the Line, that restructuring of a key industry ends up jeopardizing the entire production itself, of goods that our whole society relies on – but he links up this phenomenon with that of monopolies, which have grown rapidly and to enormous scale.

Further, he illustrates the omnipresence of monopolies with a number of other more ordinary examples in our everyday life, such as the markets for beer, toothpastes, and baby food. In a matter of years, repeated series of mergers have led to concentration in markets, sometimes ending up with as much as 80 or 90% of a market. Such mergers get followed by a process of ‘rationalization’ – eliminating ‘excess’ and ‘redundancies’, which means slashing jobs and, in the case of retailers, slashing products – i.e., reducing our real choice and range of available products. It can even impact consumer and citizen safety and health, where a corporation’s monopoly power prevents a safer and cheaper alternative from coming to the market. One of the most chilling examples of how monopolies take away freedoms we take for granted, is that of a worker who quits his job in an advertising agency. Because that agency is owned by a huge corporation with other agencies under it, and that corporation has a unified policy across all its subsidiaries of not hiring workers from other affiliates, that worker in fact has no real freedom to change jobs!

For many critics of neoliberal capitalism, none of this is much news or surprise; they would say the system of capitalism inherently tends towards centralization and monopoly. As Marx pointed out, ‘Centralization in a certain line of industry would have reached its extreme limit, if all the individual capitals invested in it would have been amalgamated into one single capital. This limit would not be reached in any particular society until the entire social capital would be united, either in the hands of one single capitalist, or in those of one single corporation,’ (Vol. I, Capital, Kerr Edition, p. 689). Many of the recent (and not so recent) years’ issues of the Monthly Review describe and analyze the manner in which capitalism, particularly monopoly capitalism, wreaks havoc on the ecosystem, on workers’ working conditions, on human relations.

According to Lynn, however, at least for the US he believes this is a new stage of capitalism, a stage of unprecedented dominance of monopolies in society, which began basically in 1981, with relaxation of anti-monopoly laws, and contributed quickly to whole sectors of the US economy. Compounding the harm of simply market concentration is the integration and overspecialization, leading to the situation, such as has been seen in the US auto industry, Japanese auto industry and the Taiwanese semiconductor industry – the same point made in his earlier book.

Part of the value of the book is in Lynn’s observation of just how the US went from being the land of free market capitalism to the land of monopoly. He points out that early laws in the US were founded on principles of maintaining the freedom and independence of small landowners and producers, against the increase of power of middlemen and monopolists that would work against the rest of society. But the very idea of what antitrust law was intended for, went through a change of interpretation. One of the most interesting points raised by Lynn is the way that discourse regarding such regulation of corporations has in a short time been changed from being a protection for citizens against overaccumulation of political power in the hands of a few – as was intended in the Declaration of Independence and the Constitution, and in the Sherman Antitrust Act of 1890 – to being a means to promote efficiency for not citizens, but consumers. This change in the language and concept of anti-trust law began with the term of Ronald Reagan as president. It was quicky propelled forward by Robert Bork, who wrote the Antitrust Paradox in 1978, which asserted that the only legitimate goal of American antitrust law is to protect consumers by delivering lower prices. He insisted that any proposed enforcement by regulators of antitrust law should be measured by its likely effect on ‘consumer welfare.’ The concept of consumer rights ironically was strengthened by the activism of Ralph Nader in the 1960s. Such trends, Lynn shows, have ended up only adding to the power of large capitals and reducing the real democracy in US society.

The author also breaks down the myth of prices being set by ‘the market’ as if it were a neutral, scientific force – i.e. the concept that a market is ‘free’. The successful establishment of the myth of the free market and the priority placed on efficiency for consumers in the form of the ‘always lower price’ are major factors in deadening the public to the risk and concerns about monopolies which society once recognized.

What are the lessons for the labour movement?  Basically, Lynn strongly argues for the restoration of anti-monopoly laws and restoration of anti-monopoly discourse, to protect the craftsmen, entrepreneurs and innovators, the farmer, and all who actually engage in producing goods and services – in other words, to protect workers, but also all others. Lynn does not prescribe worker organization per se and labour activists may be disappointed with his prescriptions. He does imply that ‘we’ need to organize to get back regulation, or enforcement of regulation, which can always chop down power that threatens to merge and accumulate and end up controlling us. Throughout Asia, workers in the garment, auto, electronics and other industries are totally held captive to the dictates of enormous multilateral corporations whose power has been allowed to accumulate as never before; Wal-mart is a prime example, but Samsung in South Korea, which accounts for 40% of the GDP, is another example of a company allowed to grow so large that it is also ‘too big to fail’, and by its huge power, distorts many of the functions of government including protection of labour and health rights. Huge companies like these are opposed by social activists of many colours – environment, democracy, farmers – as well as those concerned with ‘corporate governance’ and ‘regulation’; the labour movement needs to be aware of these and selectively ally with them to change the discourse which allows the unfettered growth of monopolies.

Price: US$26.95 (hardcover)

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