In an article entitled “The problem with profits” The Economist of March 23rd virtually agrees with American protestors who say that the whole American political and economic system, once so vibrant and competitive, is broken (amazing, but refreshing, coming from the rather right- wing Economist).

The article does, however, add something which gets little comment (except on this blog, which has frequently protested the monopoly power of corporations and the spinelessness of the anti-trust department of the US Government).

The Economist article says that in former times a very profitable company would eventually have its profits competed away. Now there are monopolies everywhere you look. Ten trillion dollars worth of mergers since 2008 have increased concentration. The attendant promises of savings seldom, if ever, materialise.  As a result the excess cash being generated domestically by corporations is running at $800 billion a year, over and above investment budgets. This represents 4% of GDP, and it is not being re-invested but is either hidden away in other countries, something the tax system encourages, or it is paid to the bosses. Monopoly means artificially high prices, which, were they at normal levels, would reduce consumers’ bills by 2% or more.

And then you have regulation. The Economist hates regulation, but regulation of companies and banks prevents fraud and cheating and theft from consumers. Unfortunately, regulations are a big cost to companies and are complex. This means that only the big companies have the resources to handle them, and this blocks the entry of smaller competitors. Neat, isn’t it? They complain, but actually the rules  help the big corporations to stay monopolies.

TTP or TTIP had little to do with trade and everything to do with extending patents and copyrights overseas, plus other dubious benefits and boondoggles, in order to further entrench the big rent-extracting monopolies. The lobbyists have seen to that.

The system is a self-perpetuating fraud. We need more small companies and more competition.

Why does this blog repeatedly focus on these economic and political boondoggles? Well, there may have been other issues that reduced the opportunities for ataraxia and a pleasant life in ancient Greece, such as famine and disease that simply had to be put up with. In modern life we don’t have famines (in the West,snyway). And we have prolonged and protected lives with modern medicine. Our modern problems are mostly man-made and with determination could be corrected. It is hard to have peace of mind under our corrupted system. All we can do is highlight the unjustnesses of the system so that we can dwell peacably in the Epicurean Garden of the mind, assured of social fairness and pleasant lives for both the rich and the poor.