U.S. economy: As in the days of the robber barons

has Actually been happy John Pierpont Morgan in a sociable round. Comfortably the most powerful bankers of America, sits on this winter evening in February 1902 with business friends in his swanky dining room with red walls and expensive oak paneling. Then the phone call comes. As Morgan returns to the Board, he can hide his shock. Puzzled, he tells the guests that his railroad trust, the Northern Securities is of the government as an illegal monopoly and sued – and the without warning of President Theodore Roosevelt, with whom he is since the youth is well known. All of his contacts in Washington use him this Time, nothing. Northern Securities is smash, which in the United States, a wide campaign against cartels and corruption begins.

Graphically the trend in many industries is similar to the tournament tree of a Grand Slam in Tennis.

More than a century later, ask yourself whether it needs a new rigorous measures. In the critique, especially giants such as Amazon, Google and Facebook, which have enormous market power, world's data from billions of users gather and our private life to spy on. The Problem, however, goes far beyond the IT sector. Since the eighties, a merger wave after the other on Corporate America. In the US economy, it is due to excessive concentration. Graphically, the development is similar to shown in many industries, the tournament tree of a Grand Slam in Tennis: A wide field of competitors is cut in half with each round, until only a few players.

Convenient authorities

A similar agglomerations of economic Power confronted America at the turn of the 20th century. Century. In the manner of the robber barons of industry accumulated magnates such as J. P. Morgan, John Rockefeller and Andrew Carnegie unimaginable wealth by placing all sectors in Trust companies. Of tobacco and cotton to coal, Oil, and steel to the Railways, and telecommunications Big Business-dominated "to" almost every industry. Often, the gigantic conglomerates handles to unethical business practices, exploit workers, and cared neither to customers nor its competitors. The Sherman Antitrust Act of 1890 was intended to prohibit anti-competitive behaviour, but up to Roosevelt's strike against Northern Securities, the authorities had come to no Trust in the way.

As at the time of the robber barons, cartels have little to fear today in the United States. Neither the justice Department nor the Federal Trade Commission take their responsibilities seriously as cartel guard properly. Not infrequently, they support Acquisitions. Your failure with the Figures. Scientific studies show that the market concentration in 75 percent of all industries during the past two decades has increased. Nearly 90 percent of the announced mergers are implemented. Transactions are blown into, as a rule, only if it is superior to the fusion partner is different. How helpless the competition authorities, has highlighted the futile lawsuit against the 85-billion Dollar major acquisition of Time Warner by AT&T last summer. The last major engagement of the antitrust guardians of the Microsoft case twenty years ago.

pictures: The WEF 2019

The consequences of this merger boom are devastating, because fair competition is a fundamental requirement of the capitalist economic system. Like it is argued in the case of acquisitions with synergies, from which consumers would benefit. The reality of excessive prices, a lack of Innovation and lousy customer service. In fact, economies of scale in some industries, the economic Benefits, especially in network-based sectors such as Telecom and electricity. When it comes to infrastructure, cutting off the USA, but desolate. In terms of broadband availability, for example, you are at the rear end of the developed countries. Other studies show that US cellular would pay customers annually up to $ 65 billion less, if the framework would be designed in such a way as it is in Germany or Denmark, where the market is at best comparable.

improvement is not in sight. Through the Acquisition of Sprint by T-Mobile, only three operators to share soon the mobile market. Not less problematic is the Situation in the health sector, where larger and larger hospital chains such as HCA, CHS, or Tenet cripple the competition. Far the consolidation has progressed as well under health insurance companies like UnitedHealth, Humana and Cigna. That explains, sometimes, why the health costs are exorbitantly higher than in any other Western country. Another example is the air traffic. With United, Delta, American and Southwest four airline companies control in a comfortable oligopoly of the air space. Accordingly, it can afford a company like United, a number of customers to pull violently from his seat from the aircraft. Such a PR fiasco, not be charged once the share price, as the investment adviser and author Johnathan Tepper holds in his excellent book, "The Myth of Capitalism".

"If we have done anything wrong, send your man to my man and they can fix it up."J. P. Morgan to Theodore Roosevelt

Similar scandals caused during the domination of the Trusts for headlines. Meat factories, for example, were so infested with vermin that, not infrequently, rats were processed to sausages. In order to protect consumers, put Roosevelt in 1907, the Pure Food and Drug Act into force, which laid the Basis for the health authority FDA. In the fight against cartels, he did not happen to J. P. Morgan as its first objective. The New York Financier, was closely involved in the creation of industrial giants such as General Electric, US Steel and AT&T, which today are icons of the American economy. To do this, he took advantage of close relationships in the policy. "If we have done anything wrong, send your man to my man and they can fix it up if we have done something wrong, send your man over to my so that you can clean up the thing," he is said to have Roosevelt proposed. Of collusion of this wanted to know but nothing.

Hidden links

nepotism and nontransparent influence of corporate associations trust in capitalism on soft today. Donald Trump on the Right and Bernie Sanders on the Left of the mobile 2016 mobilized the masses with the Slogan that the System is corrupted. The growing dissatisfaction in the population has a lot to do with human relations, with which companies can influence policy. Clearly, this is reflected in the financial reform Dodd-Frank. Ten years after major banks brought the world economy almost to Collapse, around 30 per cent of lawyers and 40 percent of the high-ranking officials who have drafted the Dodd-Frank act, for or in financial institutions, searches of the "Washington Post".

No wonder, then, populist currents of the inlet. Under President Roosevelt, the US government went at the time, with over forty lawsuits against cartels, which earned him the reputation as a "trust Buster," but the Republicans, rush proposed the Establishment. Rather, he was committed to a social consensus that large corporations in check, keeps, protects consumers and guarantees equal opportunities. Property rights and competition formed the basis on which the United States became in the following decades, the leading economic power. Historically, this capitalist principles in the United States are deeply rooted. Already, the Boston Tea Party, which marked the end of 1773 the prelude to the American Revolution, was a revolt against the British East India Company, the greatest monopoly of all time.

(financial and economic)

Created: 06.02.2019, 21:47 PM