[Plura-list] The super-rich got that way through monopolies

[Cory Doctorow]

Read today's issue online at: https://pluralistic.net/2024/01/17/monopolies-produce-billionaires/

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Catch me in Miami! I'll be at Books and Books in Coral Gables on Jan 22 at 8PM:

https://www.booksandbooks.com/event/in-person-an-evening-with-cory-doctorow/

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I'm Kickstarting the audiobook for *The Bezzle*, the sequel to *Red Team Blues*, narrated by Wil Wheaton! You can pre-order the audiobook and ebook, DRM free, as well as the hardcover, signed or unsigned. There's also bundles with *Red Team Blues* in ebook, audio or paperback:

http://thebezzle.org

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Today's links

* The super-rich got that way through monopolies: A report in honor of Davos.

* Hey look at this: Delights to delectate.

* This day in history: 2009, 2014, 2019, 2023

* Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading

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👩🏽‍💻 The super-rich got that way through monopolies

Just in time for Davos, here's 'Taken, not earned: How monopolists drive the world’s power and wealth divide," a report from a coalition of international tax justice and anti-corporate activist groups:

https://www.balancedeconomy.net/wp-content/uploads/2024/01/Davos-Taken-not-Earned-full-Report-2024-FINAL.pdf

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/01/17/monopolies-produce-billionaires/#inequality-corruption-climate-poverty-sweatshops

Everyone - even the World Economic Forum - says that wealth inequality is a serious problem, corroding our politics and our social cohesion. What this report does is link that inequality to monopolies, which produce the billionaires who are wrecking the world.

The rise of monopolies over the past 40 years came about as the result of specific, deliberate policy choices. As the report documents, the wealthiest people in America funneled a fortune into neutering antitrust enforcement, through the "consumer welfare" doctrine.

This is an economic theory that equates monopolies with efficiency: "If everyone is buying the same things from the same store, that tells you the store is doing something right, not something criminal." 40 years ago, and ever since, the wealthy have funded think-tanks, university programs and even "continuing education" programs for federal judges to push this line:

https://pluralistic.net/2021/08/13/post-bork-era/#manne-down

They didn't do this for ideological reasons - they were chasing *material* goals. Monopolies produce vast profits, and those profits produce vast wealth. The rise and rise of the super rich cannot be decoupled from the rise and rise of monopolies.

If you're new to this, you might think that "monopoly" only refers to a sector in which there is only one seller. But that's not what economists mean when they talk about monopolies and monopolization: for them, a monopoly is a company with *power*. Economists who talk about monopolies mean companies that "can act independently without needing to consider the responses of competitors, customers, workers, or even governments."

One way to measure that power is through markups ("the difference between the selling price of goods or services and their cost"). Very large companies in concentrated industries have *very* high markups, and they're getting higher. From 2017-22, the 20 largest companies in the world had average markups of 50%. The 100 largest companies average 43%. The smallest half of companies get average markups of 25%.

Those markups rose steeply during the covid lockdowns - and so did the wealth of the billionaires who own them. Tech billionaires - Bezos, Brin and Page, Gates and Ballmer - all made their fortunes from monopolies. Warren Buffet is a *proud* monopolist who says "the single most important decision in evaluating a business is pricing power… if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business."

We are living in the age of the monopoly. In the 1930s, the top 0.1% of US companies accounted for less than half of America's GDP. Today, it's *90%*. And it's accelerating, with global mergers climbing from 2,676 in 1985 to *62,000* in 2021.

Monopoly's cheerleaders claim that these numbers vindicate them. Monopolies are so efficient that everyone wants to create them. Those efficiencies can be seen in the markups monopolies can charge, and the profits they can make. If a monopoly has a 50% markup, that's just the "efficiency of scale."

But what is the actual shape of this "efficiency?" How is it manifest? The report's authors answer this with one word: *power*.

Monopolists have the power "to extract wealth from, to restrict the freedoms of, and to manipulate or steer the vastly larger numbers of losers." They establish themselves as gatekeepers and create chokepoints that they can use to raise prices paid by their customers and lower the payout to their suppliers:

https://chokepointcapitalism.com/

These chokepoints let monopolies usurp "one of the ultimate prerogatives of state power: taxation." Amazon sellers pay a 51% tax to sell on the platform. App Store suppliers pay a 30% tax on every dollar they make with their apps. That translates into higher costs. Consider a good that costs $10 to make: the bottom 50% of companies (by size) would charge $12.50 for that product on average. The largest companies would charge $15. Thus monopolies don't just make their owners richer - they make everyone else poorer, too.

This power to set prices is behind the greedflation (or, more politely, "seller's inflation"). The CEOs of the largest companies in the world keep getting on investor calls and bragging about this:

https://pluralistic.net/2023/03/11/price-over-volume/#pepsi-pricing-power

The food system is incredibly monopolistic. The Cargill family own the largest commodity trader in the world, which is how they built up a family fortune worth $43b. Cargill is one of the "ABCD" companies ("Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus") that control the world's food supply, and they tripled their profits during the lockdown.

Monopolies gouge everyone - even governments. Pfizer charged the NHS £18-22/shot for vaccines that cost £5/shot to make. They took the British government for £2bn - that's enough to pay last year's pay hike for NHS nurses, *six times over*,

But monopolies also abuse their suppliers, especially their employees. All over the world, competition authorities are uncovering "wage fixing" and "no poaching" agreements among large firms, who collude to put a cap on what workers in their sector can earn. Unions report workers having their pay determined by algorithms. Bosses lock employees in with noncompetes and huge repayment bills for "training":

https://pluralistic.net/2022/08/04/its-a-trap/#a-little-on-the-nose

Monopolies corrupt our governments. Companies with huge markups can spend some of that money on lobbying. The 20 largest companies in the world spend more than €155m/year lobbying in the US and alone, not counting the money they spend on industry associations and other cutouts that lobby on their behalf. Big Tech leads the pack on lobbying, accounting for 82% of EU lobbying spending and 58% of US lobbying.

One key monopoly lobbying priority is blocking climate action, from Apple lobbying against right-to-repair, which creates vast mountains of e-waste, to energy monopolist lobbying against renewables. And energy companies are getting *more* monopolistic, with Exxonmobil spending $65b to buy Pioneer and Chevron spending $60b to buy Hess. Many of the world's richest people are fossil fuel monopolists, like Charles and Julia Koch, the 18th and 19th richest people on the Forbes list. They spend fortunes on climate denial.

When people talk about the climate impact of billionaires, they tend to focus on the carbon footprints of their mansions and private jets, but the true environmental cost of the ultra rich comes from the anti-renewables, pro-emissions lobbying they buy with their monopoly winnings.

The good news is that the tide is turning on monopolies. A coalition of "businesses, workers, farmers, consumers and other civil society groups" have created a "remarkably successful anti-monopoly movement." The past three years saw more regulatory action on corporate mergers, price-gouging, predatory pricing, labor abuses and other evils of monopoly than we got in the past *40* years.

The business press - cheerleaders for monopoly - keep running editorials claiming that enforcers like Lina Khan are getting nothing done. Sure, *WSJ*, Khan's getting nothing done - that's why you ran 80 editorial about her:

https://pluralistic.net/2023/07/14/making-good-trouble/#the-peoples-champion

(Khan's winning like crazy. Just last month she killed *four* megamergers:)

https://www.thesling.org/the-ftc-just-blocked-four-mergers-in-a-month-heres-how-its-latest-win-fits-into-the-broader-campaign-to-revive-antitrust/

The EU and UK are taking actions that would have been unimaginable just a few years ago. Canada is *finally* set to get a real competition law, with the Trudeau government promising to add an "abuse of dominance" rule to Canada's antitrust system.

Even more exciting are the moves in the global south. In South Africa, "competition law contains some of the most progressive ideas of all":

> It actively seeks to create greater economic participation, particularly for ‘historically disadvantaged persons’ as part of its public interest considerations in merger decisions.

Balzac wrote, "Behind every great fortune there is a crime." Chances are, the rapsheet includes an antitrust violation. Getting rid of monopolies won't get rid of *all* the billionaires, but it'll certainly get rid of a hell of a lot of them.

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👩🏽‍💻 Hey look at this

* The coming storm https://www.antipope.org/charlie/blog-static/2024/01/the-coming-storm.html

* Retrocomputer miniatures https://store.transmutable.com/

* Google Search Really Has Gotten Worse, Researchers Find https://www.404media.co/google-search-really-has-gotten-worse-researchers-find/

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👩🏽‍💻 This day in history

#15yrsago Veeps: Profiles in Insignificance, a look at the bumbling, murdering, drunken idiots (and others) who’ve served as vice-president of the USA https://memex.craphound.com/2009/01/18/veeps-profiles-in-insignificance-a-look-at-the-bumbling-murdering-drunken-idiots-and-others-whove-served-as-vice-president-of-the-usa/

#10yrsago Tim Wu on FCC’s net neutrality disaster https://www.washingtonpost.com/news/the-switch/wp/2014/01/14/a-fema-level-fail-the-law-professor-who-coined-net-neutrality-lashes-out-at-the-fccs-legal-strategy/

#10yrsago Random NSA program generator, with denials https://divergentdave.github.io/nsa-o-matic/

#10yrsago Parfaitzilla: the dessert that ate Japan https://mochihead.tumblr.com/post/31243751745

#10yrsago Scoring Obama’s NSA reforms (spoiler: it’s not good) https://www.eff.org/deeplinks/2014/01/rating-obamas-nsa-reform-plan-eff-scorecard-explained

#15yrsago Mr Chicken: the genius who paints London’s fried-chicken signs https://web.archive.org/web/20101208073826/https://www.creativereview.co.uk/cr-blog/2009/march/meet-mr-chicken

#10yrsago Congress requires publicly funded research to be publicly available https://www.eff.org/deeplinks/2014/01/newly-passed-appropriations-bill-makes-even-more-publicly-funded-research-available-online

#10yrsago Android malware uses accelerometer readings to figure out if it was running on a real phone or in emulation https://arstechnica.com/information-technology/2019/01/google-play-malware-used-phones-motion-sensors-to-conceal-itself/

#5yrsago An archive of Freedom, Paul Robeson and Louis Burnham’s radical Harlem newspaper https://web.archive.org/web/20190123223255/http://dlib.nyu.edu/freedom/

#5yrsago Unsealed court documents reveal that Facebook knew kids were being tricked into spending thousands of dollars on their parents’ credit cards https://revealnews.org/blog/a-judge-unsealed-a-trove-of-internal-facebook-documents-following-our-legal-action/

#5yrsago Why charter schools are the flashpoint for the LA teachers’ strike https://www.nakedcapitalism.com/2019/01/rising-tide-teacher-strikes-finally-exposing-corrupt-charter-school-agenda.html

#5yrsago Now EVERYBODY hates the new EU Copyright Directive https://www.eff.org/deeplinks/2019/01/now-everybody-hates-new-eu-copyright-directive

#1yrago Care Inflation: The inflation no one wants to talk about https://pluralistic.net/2023/01/18/wages-for-housework/#low-wage-workers-vs-poor-consumers

#1yrago Eleanor Janega's "Once and Future Sex": The true, weird, horny history of medieval gender and sex https://pluralistic.net/2023/01/17/ren-faire/#going-medieval

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👩🏽‍💻 Colophon

Today's top sources:

Currently writing:

* A Little Brother short story about DIY insulin PLANNING

* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS JAN 2025

* The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. FORTHCOMING TOR BOOKS FEB 2024

* Vigilant, Little Brother short story about remote invigilation. FORTHCOMING ON TOR.COM

* Spill, a Little Brother short story about pipeline protests. FORTHCOMING ON TOR.COM

Latest podcast: The Bezzle, read by Wil Wheaton (excerpt) https://craphound.com/news/2024/01/14/the-bezzle-read-by-wil-wheaton-excerpt/

Upcoming appearances:

* Enshittification: The Rise and Fall of Big Tech (Crash Course Economics)
https://us06web.zoom.us/webinar/register/WN_YsKONp5zRgeF6SVuIOb6hQ#/registration

* Books & Books (Coral Gables, Florida), Jan 22
https://www.booksandbooks.com/event/in-person-an-evening-with-cory-doctorow/

* Marshall McLuhan Lecture 2024 (Berlin), Jan 29
https://transmediale.de/en/2024/event/mcluhan-2024

* The Lost Cause at Otherland (Berlin), Jan 30
https://www.otherland-berlin.de/de/event-details/autor-innenabend-mit-cory-doctorow.html

Recent appearances:

* The Lost Cause (The Writer's Voice)
https://www.writersvoice.net/2024/01/cory-doctorow-the-lost-cause/

* What the Future will Bring (Homeless Romantic)
https://www.youtube.com/watch?v=6_Vq8qW2A8I

* Talking "The Lost Cause" with Warren Mosler (MMT Podcast)
https://www.patreon.com/posts/episode-182-cory-95211955

Latest books:

* "The Lost Cause:" a solarpunk novel of hope in the climate emergency, Tor Books (US), Head of Zeus (UK), November 2023 (http://lost-cause.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3007/Pre-Order_Signed_Copies%3A_The_Lost_Cause_HB.html#/)

* "The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (http://seizethemeansofcomputation.org). Signed copies at Book Soup (https://www.booksoup.com/book/9781804291245).

* "Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.

* "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com

* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html

* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59?sk=f6cd10e54e20a07d4c6d0f3ac011af6b) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)

* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html

* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.

Upcoming books:

* The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books, February 2024

* Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025

* Unauthorized Bread: a graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025

This work - excluding any serialized fiction - is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

https://creativecommons.org/licenses/by/4.0/

Quotations and images are not included in this license; they are included either under a limitation or exception to copyright, or on the basis of a separate license. Please exercise caution.

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