Monopoly capital is a feature of later stage capitalism, which drives imperialism. This was proven by the great drive for imperialism, first theorized by Vladimir Lenin. But can we say that monopoly capital is the same today as it was in Lenin’s time of the First World War? Capitalism, like many things, evolves over time.
There’s an interesting post by Marxist economist Michael Roberts explains the phenomenon of Monopsony that we’re facing right now. He talks about some content from Ashok Kumar’s book, “Monopsony Capitalism Power and Production in the Twilight of the Sweatshop Age”. It’s worth a look if you’re interested in monopoly capital, doubly so if you’re a third wordlist.
A monopsony is a market condition in which there is only one buyer, the monopsonist. Like a monopoly, a monopsony also has imperfect market conditions. The difference between a monopoly and monopsony is primarily in the difference between the controlling entities. A single buyer dominates a monopsonized market while an individual seller controls a monopolized market. Monosonists are common to areas where they supply most or all of the region’s jobs.” – Investopedia
We have retailers like Amazon and Walmart. Manufacturers like Nike or Apple. Food producers like Nescafe or Del Mar. They wield monopolistic power over hundreds if not thousands of small producers that must supply them. It’s the domination of multi-nationals over the sweatshops of the third world, and to a small degree, the first world as well.
Roberts notes that the basis of monopsony is an unequal power dynamic of few buyers and many sellers. Because there is such a low level of surplus value collected by the third world capitalist in production, it produces “chronically low capital investment” in that production. “Cheap labour and many suppliers are preserved, as opposed to the use of machinery and fewer, larger companies.”
There isn’t enough money to spend on machines, etc. because the rate of profitability isn’t sufficient. Meaning, variable capital (human labour-power) takes priority over constant capital (means of production). Why? Because variable capital is what creates value. You can get out of it more than you put into it. As opposed to constant capital which produces a fixed amount that you put into it. It continues to prove Marx’s theory of labour being the source of value.
1. The current capitalist economic situation of monopsony deliberately creates a situation of chromic underdevelopment in the third world where the production is carried out.
2. This “fragmentation and low capital investment” means low barriers to labour entry. Many supplier firms have the advantage when offering employment, keeping wages down – because they all have to bid against each other in trying to be the supplier for the monopsony retailers. This is the primary driver of sweatshops today.
Situations change when radical and necessary action takes place. Following the Rana Plaza disaster in 2013 where over a hundred Bangladeshi workers died in a building collapse – demands were made for safety regulations, shorter working hours, better working conditions etc. New labour unions appeared all across the garment industry, workers battling the capitalist. It made it more capital-intensive to do business. As a result, small garment firms began to fail, or be bought up by the competition because they were unable to compete.
The balance of power between retailer-supplier began to change. The suppliers started going oligopolistic “driven by their workforces to demand better prices and terms.” Now, those few remaining suppliers have some bargaining power with the retailers.
While some workers got better conditions, many more were put out of work. This, the capitalist would say, “is why we need less regulation, so that more people can have jobs!” Such a statement misses the point: it’s an obvious contradiction in capitalism: mass unemployment, or livable working conditions. Rather than acknowledge the flaw and critique capitalism, they celebrate the flaw as the market in action to justify the inhumanity of it.
Marx detailed how the very act of competition creates monopoly. This is just another manifestation of it. One that deliberately harms the third world and its proletariat to produce the cheap and abundant commodities that we take for granted.