Workers World, Vol. 13, No. 12
At a time when the fortunes of American capitalism are rapidly reaching an all-time low, liberals are hard put to the task of presenting solutions to the ever graver problems which besiege the ruling class.
By focusing public attention on some of the more onerous features of the oppressive social system, they hope to goad, if not persuade, the ruling class into reforming itself.
No one has made a more dramatic and conscientious effort in recent times at public exposure than Ralph Nader. His latest endeavor is a massive work entitled “The Closed Enterprise System.” Nader’s study concludes that the “cost of monopoly to the consumer” may be as high as $60 billion a year. The political power of the monopolies, he says, is so formidable that they are able to block anti-trust suits against themselves. Furthermore, the anti-trust officials rarely prosecute them.
Of the 200 trial attorneys who are charged with conducting suits against the trusts, only about 13 trials ever take place in any one year. The study doesn’t say how many are lost or won or what the ultimate effect really is. In addition, the people who are relied upon to fight the big monopolies are the very ones who give a helping hand to them. Such luminaries as Senator Eugene McCarthy did his bit “to help a client bank” in Minnesota, says Nader.
The approach of bourgeois economists of the liberal variety toward so-called trust-busting has varied in the past decades since monopoly became firmly established as a definite and permanent feature of capitalism. At the turn of the century their cry (both in Europe and America) was “back to free completion,” “cut the monopolies down to size,” “reestablish free trade,” etc., etc. But as monopoly took firm hold as a world system of capitalist imperialism, it became obvious that this was merely a call to bring back yesterday.
A later variety of radical bourgeois thinkers took a different tack. They maintained that as monopolies grew larger and larger, they would encompass the entire world and would be succeeded by a new phase, a phase of capitalism in which the trusts combine on a world scale, purge the anarchy and chaos resulting from the cut-throat, violent struggle and completion among the trusts, and organize world capitalist production on a more rational basis, one “less costly” to society as a whole.
World Wars I and II shattered this illusion. Today it is almost impossible to find anyone who entertains even a semblance of this theory. The epoch which came after the second world war has produced in bourgeois economic theory nothing but cynicism and the crudest apologetics.
So-called liberal economists like John Kenneth Galbraith are completely resigned to the domination of finance capital and offer only a prayer that the giant monopolies will at least lend themselves to regulation by the state, forgetting in passing that it is the monopolies that control the state.
Nader’s report is a serious study of the concentration of economic power in the hands of a tiny minority. It shows the marauding, devastating effects of the giant corporations on all phases of social life.
Illuminating as the report is from the point of view of factual material, it has a fundamental and absolutely fatal flaw. Nader is caught in the same contradictory position as all the other bourgeois liberals. He has suggested no real solution to the problem that he raises. Indeed, the solution that he does offer – if one were to take him seriously – is positively ludicrous.
Serious conservative bourgeois economists – most of whom are in the pay of the banks, giant industrial corporations and university endowments – are fully familiar with the processes of corporate finance and industry. And as such, they confine their “solutions” to that particular concrete aspect of capitalist economy which aids the particular bankers and industrialists in this or that problem of profit-making or cost reduction, management devices or public relations, which puts a pretty face on Standard Oil, IBM, Coca Cola and the rest.
Nader, however, proposes to break up the monopolies – at least “where a few companies control half or more of the production of an industry ... or where four firms supply more than 50 percent or eight firms more than 70 percent of the relevant market.”
Can the process of monopoly be reversed and if so who will do it? His own report shows that the very people charged with the responsibility of carrying out the present laws have failed to do so. And where trusts have been broken up, so to speak, in the past, it has been, in reality, in cases where one ruling faction of the bourgeoisie has been able to enforce a division on another faction, and has not at all been due to seeming “public interest” or the efforts of the anti-trust busters.
Nader proposes that some of the monopolies must be broken up so as to revive competition, which he assumes will bring benefits to the “consumers,” to use his favorite word. Nader is thus in effect asking to restore the bygone era of free competition, the competitive state of capitalism. The difficulty with Nader’s suggestion lies in the fact that he views monopoly and competition as “happenings” and not as inevitable stages in the development of capitalist society.
Nader sees such categories as pollution, lack of safety devices in autos, mercury in fish and other social phenomena, not as the result of a process of social development in contemporary class society, but as more or less arbitrary entities which grow out of either selfishness, mismanagement, irrationality – or plain stupidity.
Instead of examining the objective laws governing the social system, he resorts to a moralistic approach and offers solutions which are utopian and impractical, and only serve as a cover for further monopolistic robbery.
Nader suggests that monopoly be either curbed or abolished. Fine. But does he ask himself what is the fundamental cause of monopoly? Is it greed, ill will, stupidity or selfishness – or is the very cause of monopoly the remedy which he proposes as a cure? Competition!
It is competition which has inexorably and irresistibly led to monopoly. The experience of the last 70 years all over the entire capitalist world is irrefutable testimony. Wherever capitalist competition develops, there, sooner or later, monopoly follows. Not in all industries, not in every nook and cranny of capitalist society, but the overall fundamental process of capitalist competition has inevitably led to monopoly.
Can Nader point to even a single exception? The breaking up of a few monopolies does not lead back to free competition but sets the stage for murderous wars of competition which lead to new monopolies. That too is irrefutably demonstrated by experience.
Furthermore, the monopoly stage of capitalism is characterized by the fusion of industrial and banking capital and is so inextricably interwoven with the capitalist state – in fact so totally controls it – as to make it well-nigh impossible for the state to even regulate monopolies through state organs, let alone restore free competition.
The course of the development of capitalist competition into its opposite – capitalist monopoly – has not necessarily abolished all competition. Competition and monopoly exist side by side. But it is the competition of the epoch of imperialism, not the competition of the bygone epoch of free trade.
Nader’s solutions are not only utopian but also lack progressiveness. In his classic on imperialism, Lenin quotes the then Marxist Hilferding as saying:
“The aim of proletarian policy cannot now be the ideal of restoring free competition, which has now become a reactionary ideal, but the complete abolition of competition by the abolition of capitalism.”
Nader, as we said, wants to curb, if not abolish monopoly, and favors competition, which he thinks will be a lesser evil if not a real benefit.
The fundamental reason behind Nader’s failure to deal with the dialectical evolution of competition into monopoly lies in his middle class aversion to recognizing that the basis of capitalist competition, as well as monopoly, lies in the private ownership of the means of production.
The fundamental solution to monopoly is not to bring back competition, which cannot really be done anyway, but to abolish capitalism which is the source of all the evils of both competition and monopoly.
Last updated: 11 May 2026