Richard Wolff on How Competition Leads to Monopolies

Richard Wolff on How Competition Leads to Monopolies


Company A produces (however it manages it)
a better quality and/or a lower price than Company B. So we all go to company A.
Company B can’t find any buyers because it’s not competitive. Or, to say the same
thing in other words, Company A outcompetes
Company B. Here’s what happens. Company B collapses because it can’t sell its
goods. We’re all going to company A. So Company B, sooner or later, declares
bankruptcy. It can’t continue. It lays off its employees. It stops buying inputs,
because it can’t compete. Now what happens in Company A? Company A says “Hey,
there’s a whole bunch of workers that have just lost their job at Company B.
They’re trained in producing what we produce.
Let’s go hire some of them.” And likewise, Company A says “They’re not using their
computers, or their trucks, or their other inputs. They’re gonna have to sell them
on the second-hand market. We can get some important inputs we need at a lower
price than we would have to pay if we bought them new.” So what begins to happen
is where before there were two companies (A and B), there’s now one larger A and B
has disappeared. Or, to say the same thing in simple English, A (the winner in the
competitive struggle) eats, absorbs into itself, what’s left of Company B. And this
process is repeated over and over until 30 or 300 companies have become one, or
two, or three. That’s the result of competition. That’s how competition is
supposed to work. That’s how competition does work. It’s important to understand
monopoly is where competition leads. And there’s
if that weren’t enough (let me make sure you understand this from the business
point of view) it is the great dream of every entrepreneur to become the last
one standing in the competition, to win the competition. Not just because it
makes you feel good, you outmaneuvered your competitors, but because if you’re
the last one standing you’re the monopolist. The reward for
having out competed the others is that you’re now in a position to jack up the
profits and the prices way beyond what you could have done before. So we have a
system that produces monopoly, and all the incentives for every entrepreneur in
competition to work as hard as possible to become the monopolist. So why is
anyone surprised that monopolies keep happening? Because they’re the whole
point and purpose of capitalist competition.

24 Comments on "Richard Wolff on How Competition Leads to Monopolies"


  1. Humans are naturally competitive creatures
    Turn the world as socialist as you want, we’ll just go right back to our competitive nature.

    Reply

  2. Here's a question: Under Richard Wolff's proposed social organization, what would keep the worker owned companies from being monopolies?

    Reply

  3. In my experience successful smaller companies also simply sell out to larger companies who want to eliminate competitors. Sometimes they keep the employees; sometimes they don't.

    Reply

  4. Are you saying big fish eat little fish. Given enough time there is only one very big starving fish?

    Reply

  5. Without competition, you have a monopoly.

    If you don't have monopolies, it means there's competition.

    It seems like Wolff is angry with reality.

    Reply

  6. Monopolies do NOT "keep happening". Monopolies are truly very rare, almost non-existent. Amazon is not even close to being a monopoly. Wolff must have never heard of Walmart.

    Reply

  7. This stuff isn’t rocket science. But it’s America’s religion unfortunately. Good luck trying to convert people

    Reply

  8. Boogie Woogie Bugle Boy – The Andrews Sisters (lyrics in description)
    https://www.youtube.com/watch?v=OfWc52smNs8

    Reply

  9. you should be going one step further to generalize: there is no possibility of "free market" its only temporary dynamic stable point of market system. But only final stable point of market competition system is monopoly.
    Thats why we must support loosers, not winners in competition -thats what we (governments clowns, in their eternal wisdom) are doing today, just quickeing the porcess of market and economy collapse into disfunctional system which is called monopoly.

    Reply

  10. Why hasn't competition in the automobile market lead to monopoly? Last year I bought a new Toyota. I looked at Toyota, Honda, Hyundai, Kia, Ford, and GM products before I made my decision. If I wanted to go upscale I could have bought a BMW, Audi, Tesla, or Mercedes. There are many brands and models to choose from in a competitive market. Not as much to choose from in state controlled economies.

    I also think of Robin Williams in the movie "Moscow on the Hudson". He defects from the Soviet Union and finds himself living with a family in New York. On a trip to the grocery store he approaches the manager and asks: "coffee line?" The manager responds, "Coffee is on aisle nine."

    The next scene shows Williams prostrate, passed out on the floor in aisle nine. After all, aisle nine was filled with multiple assortments of makes and brands of coffee. No coffee lines. No coffee monopoly.

    Reply

  11. A Couple things to think about:
    There are about 209 million adult (18+) American citizens. That $778 billion military budget for 2020 equates to about $3500 from each and every adult in America. I most definitely do not consent to my $3500 being spent for US led genocides, imperialism, war crimes, and crimes against humanity. Stop this madness now!

    Also, the US GDP is about $18.6 trillion. If we became a purely equal society tomorrow that would mean that each and every US adult would be making $89,000 per year. Think about that when some idiot right-winger says that we can't all have nice things.

    Reply

  12. Competition is needed to drive down prices that’s why the central planners in the Soviet Union rationed the goods because they didn’t have competition just state enterprise, but Richard Wolff is right competition leads to monopolies so the answer is worker self management because then your have competition but without the motive to drive businesses to the ground.

    Reply

  13. Competition also forces company A and B to remain efficient & responsive to their customers. Absent competition, there is little incentive for companies to be dynamic.

    Reply

  14. Competition refers to the barriers of entry in an industry go down such that high costs can go down because no one has a monopoly on the arts of production.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *