I wrote previously about how "government service agencies" like Serco run many aspects of government service provision in The UK and elsewhere. But it is only when you take a step back and look at different aspects of how the world works, that you realise that much of the world is effectively ran by various types of cartels.
Cartels are most famous in crime, such as the drugs cartels that exist in Columbia, and more recently in Mexico.
But they exist in almost every major aspect of the private sector; drugs is simply a more infamous example.
An article here provides a chart that explains how ten (multinational) companies produce almost everything that we buy.
Pharmaceuticals are produced by a small number (i.e cartel) of "Big Pharma" companies, the results of which have been examined in a book of the same name.
"Big Oil" has become amalgamated into an ever decreasing number of mega-corporations: ExxonMobil (as the result of a merger in the late nineties), BP, Chevron, Conoco Phillips and Shell are the main ones in the West. The mergers that happened in the nineties and earlier were partially a result of the entrenchment of nationalised oil companies that previously were in the clutches of Western multinationals. Since that time, Western oil companies have entrenched themselves by expanding into previously uncharted territory; exploring shale gas and oil sands due to advances in technology.
Before the oil crisis of the early seventies, the so called "Seven Sisters" produced the vast majority of the world's oil. The advances of "Big Oil" into new forms of oil and gas exploration are also a result of the rise of the "New Seven Sisters", which are effectively nationalised industries of various developing and non-Western nations. In other words, while in the West oil is concentrated into the hands of a handful of private corporations, in the "East", it is consolidated into the hands of government through government-ran oil companies.
And over all this is OPEC, which itself is a cartel (or oligarchy) of nations that has huge influence over the price of oil.
Technology is another area dominated by a small number of companies. Computer software is dominated by Microsoft and Apple. Other domestic technology (TVs, stereos) is dominated by Far Eastern companies; "White Goods", to a lesser extent also.
Multinationals are everywhere. A telling story is when the former head of ExxonMobil in the nineties quickly put down another colleague for calling them an "American" company. ExxonMobil wasn't an "American" company as far as the CEO was concerned; it was a global one , and as such, owed no loyalty to any one nation.
The nature of the market
But the creation of an oligarchy/cartel is even more frighteningly evident in finance. In the Victorian era, there were hundreds of banks across every major developed nation in the world. The USA and The UK are the best examples of this. But since that time, and from every major economic downturn or depression, banks have either gone under or been bought out.
Each time this has happened, the power to control finance has fell into a smaller and smaller number of private banks; so that by the time of financial crisis of 2008, there are only a bare handful of banks that control much of the world's finance, Goldman Sachs being perhaps the biggest. BearStearns' sale to JP MorganChase in March 2008 was the precursor to the panic following the bankruptcy of Lehman Brothers in September. Following from this, other banks merged to consolidate assets, and the creation of the concept of them being "too big to fail", necessitating the infamous bailout out of the public purse.
The acceptance of the "too big to fail" cartel (TBTF) effectively legitimized the concept of "Corporate Socialism": one rule for the rich, another for the poor. It meant that national governments effectively accepted control of the world economy was no longer in their hands, but in that of the cartel of international investment banks.
In the five years since that event, the cartels of finance, of oil, and of foodstuffs have presided over a collapse of living standards in the West, especially in the economies of Southern Europe, and parts of The USA and The UK. Costs of living have increased year after year, while governments freeze wages and spending in order to repair the damage done by the banks from the financial crisis.
Cartels are the enemy of freedom; they are as dangerous now as they were when the ancient Greeks talked of an "oligarchy" in the time of Plato and Socrates. But cartels are a natural result of neo-liberal economics. While Ayn Rand and the Chicago School of economics argued that free market Capitalism would naturally result in more choice for the consumer and therefore lower prices, the result has been the opposite in the long-run.
In the dog-eat-dog world of free market liberalism, when applied on a global scale (creating "Globalisation") the result is that this creates larger and larger companies that literally eat up their rivals (through mergers), while killing off the competition. Because small companies cannot possibly hope to compete fairly in such an environment, the result is a lack of choice for the consumer, or price-fixing. The Libor rate scandal in the financial industry, the role of OPEC in the oil industry, and the various tariffs and subsidies set up against the interests of the developing world, are a testament to that.
Only a handful of huge companies can most efficiently operate as pan-national entities in order to find the cheapest methods of production for the greatest profit. This therefore has the effect of depressing wages overall, while increasing the share value of the companies themselves, and massively boosting the incomes of the fractional percentile at the top. This may sound quite a lot like Marxist theory, but it is the reality today.
In this way, cartels are a natural result of free market Capitalism. When applied on a global scale, you simply get a global cartel, independent of government control: independent of accountability, and in control of the global supply chain.
How to blackmail the government
The history of the last hundred years or so has seen a gradual breaking down of the power of the nation-state, and a transfer of power to ever-larger multinational cartels of private companies. In effect, this is a transfer of accountability from governments ultimately accountable to their electorate, to private companies only accountable to their shareholders.
Because modern-day multinationals are trans-national entities, laws from individual governments hold less and less authority. In the end, the multinational can always up sticks and transfer operations to nation with a more amenable government; this is how globalisation works.
In this way, "government" in the 21st century has become less and less relevant to everyday life, as private multinationals (often working as part of an informal cartel or oligarchy) dictate much of what happens. Governments have become beholden to the interests of "big business" because they hold fewer and fewer means to hold these private oligarchies to account. In the end, a powerful private corporation can always threaten a dissatisfied government with economic blackmail: "what are you going to do if we leave the country?", the multinational can say. "Where will you get your revenue and jobs from?".
This is what happens around the world, and has happened as recently as the financial crisis when then banks were asking for help from government. In the end, such as in The UK, there was always the threat to take their business elsewhere. After the financial sector had encouraged the political class to think that manufacturing and traditional industries were secondary compared to finance in the modern world, they made The UK government their "bitch": with the financial sector the main thing propping up The UK, there is little else left to keep the country running - it runs mainly on deluded self-confidence, and reliance on the wisdom (and mercy) of the financial oligarchy.
This is how the world works in the 21st century: governments worldwide effectively blackmailed by a group of differing cartels, whose only loyalty is to themselves and the increase in their share price.
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