Cooking The Books 1: State Monopoly Capitalism

David Cameron is on record as attacking ‘markets without morality’ and ‘capitalism without a conscience’. It’s all part of his attempt to rebrand the Tory party from the openly nasty party it was under Thatcher to a caring party, in the hope that this will bring in a enough votes to win the next election. One of those he has called in to help do this is a former theology lecturer, Phillip Blond, who the media have dubbed a ‘Red Tory’ for his critique of ‘unfettered capitalism’.

According to the Times (25 November), Blond “argues that successive governments sought to deregulate for the sake of market competition, but ended up creating monopolies that dominate Britain’s high streets, arguing that this created ‘state-sanctioned monopoly capitalism’.”

‘State monopoly capitalism’ was a term employed, indeed coined, by the old Communist Party. For instance, in the 1968 edition of their programme The British Road to Socialism they stated that “Stage by stage British capitalism has developed into monopoly capitalism . . . Monopoly capitalism, the basis of imperialism, has now developed to state monopoly capitalism where the capitalist state is intertwined with the great banks and monopolies” and called for “a broad popular alliance drawing on all those whose interests are threatened by state monopoly capitalism”.

Although this ‘broad alliance’ was envisaged as including non-monopoly capitalists, it has to be admitted that there was a difference between this and what Blond has in mind. They wanted to go on to ‘state-monopoly capitalism’ such as then existed in Russia, whereas he wants to go back to a non-monopoly capitalism with lots of small and medium-sized businesses competing against each other.

Actually, ‘monopoly capitalism’ is not an accurate description of present-day capitalism. Certainly, most sectors of production and distribution are dominated by a small number of large companies, but this is not a monopoly situation where there is only a single seller. It is rather what economists call an oligopoly situation, domination by a few big companies (from oligos, the Greek word for ‘few’).

So, a more accurate description of modern capitalism would be ‘oligopoly capitalism’, even though the term sounds barbarous and is not likely to catch on (but ‘oligarch’ did).

Marx identified a built-in tendency under capitalism towards ‘oligopoly’, though he called it the concentration and centralisation of capital, a trend which has been amply borne out as, through mergers and take-overs, the number of firms in all sectors of industry has become fewer and fewer. It is this trend that Blond wants to reverse. As do the Green Party and the former editor of the Ecologist, Zac Goldsmith, who will be standing as a Tory candidate in the coming general election.

They won’t succeed of course because the concentration and centralisation of industry corresponds to the logic of capitalism and cannot be overcome by government action. If the Tories win, the most that would happen is that steps would be taken – or rather would be continued – to stop any one oligopolistic firm becoming too powerful. Other capitalists don’t like this as it allows the firm in question to hold them to ransom and make them pay over the odds for some product or service. Which is why there is trust-busting legislation in the US and a Competition (formerly Monopolies) Commission in Britain. But no government is going to try to break up the oligopolies into smaller, more competitive firms, whatever the small business element within the Tory party might dream about. State-sanctioned oligopoly capitalism will survive.