Richard Wolff on the Concentration of Corporate Power

Richard Wolff on the Concentration of Corporate Power


20 years ago there were approximately
seven or eight thousand corporations, public companies, in the United States.
Today there’s half that number. Why? Because they have concentrated. Many have
become fewer. The typical corporation is therefore much larger. The Board of
Directors hasn’t changed, that’s still 15 to 20 people, and the major shareholders
haven’t changed much in number either. What has changed is the size of the
employees; more and more of them relative to the Board of Directors that runs the
business. Let me drive home what this means in economic language. Companies
merge. Many become fewer. Bigger companies buy smaller ones. They get together. They
do that in two ways. Sometimes a company buys other companies like itself, so many
cigarette companies become three or four, many car companies become three or four.
That’s called “horizontal integration.” The same company doing the same kind of
thing, instead of competing with one another they become parts of one another.
The other kind of concentration is called
“vertical integration.” That’s when a company doesn’t buy another one like
itself, instead it buys either a company from whom it used to buy inputs. For
example, a car company buys a steel company. That’s a company buying
something that is different from itself, something that provides an input to
itself. Sometimes companies buy the thing they sell to.
For example, car companies selling to an independent dealer can decide
instead to buy that dealer. Then they own both the producer of the car and the
seller of the car. We’ve had both horizontal and vertical integration. Let
me give you an idea of what that has meant in terms of size. Back in 1975
the 109 biggest corporations
out of the seven, eight thousand there were got half of the profits.
109 out of thousands accounted for half the profits. In 2016 this had been
reduced to the following stunning number: the 30 largest corporations together
in this country out of 3.5 thousand have half the profits.
That’s called a highly concentrated system. Very few corporations have
enormous wealth and enormous power that derives from that wealth at their
disposal. And we all know how they use it, which makes sense once you understand
this structure. If you’re super concentrated and super rich there’s
always a danger that the mass of your employees and even the mass of other
smaller companies will resent your power and your wealth, will feel abused by it,
we’ll know that in any dealings with you you have the upper hand because you’ve
got the enormous wealth. And so there is danger that your situation will be
attacked. One of the things these big corporations can do and do do is try to
control all that. They set up associations with other companies so
that they have an ongoing relationship and can stave off criticism and attack.
They spend a lot of money on public relations so if I gave you the names of
these companies you’re already familiar with them. You know those names because
you’ve dealt with them in your life and there’s a lot of advertising out there
to make sure you never forget them. And they also buy the politicians. They
provided experts that give the politicians their information. They buy
the lobbyists who spend time taking the politicians out to fancy dinners and to
explain what is wanted of them. They give the big bucks donations to the political
campaigns to keep those politicians in office. And they have all the wealth and
all the connections needed to do that. They will pay for publicity
makes the politician look good or, if the politician doesn’t cooperate, they’ll pay
for the publicity that makes him or her look bad. You get the picture. The power
of these corporations cannot be exaggerated. When I looked into my own
understanding of the world to give you a metaphor, a parallel, the largest
corporations in America (the top two three hundred is really all we need to
talk about) are like the kings of old and the court: a handful of people, very small,
gather around the big one at the top, together make all the decisions formally
and informally (on the golf course, at the restaurant, at the resort or in the
boardroom, it doesn’t really matter). They run the economic system because
they have the dominant wealth and power to do so.

20 Comments on "Richard Wolff on the Concentration of Corporate Power"


  1. The Idea that voting in a system that was designed to secure and expand the power of the already powerful would change any of that seems rather naive. These groups depend on the system working like it does to make trillions by waging wars, taking everything you have when you fall ill or want an education, they cheat lie and brainwash you with never ending propaganda and advertisement and make you believe it's for your own good. It seems highly unlike making a cross next to a name on a ballot would make any significant difference. (Whoever they let you "vote"for)

    Reply

  2. The powers that be are a dark force to all of humanity. We wrestle not against flesh and blood but against evil and spiritual wickedness in high places.

    Reply

  3. Is it just me, or does it feel like a breeze of Fascism drifting across the globe?

    When the corporations, military and government fuse into a nameless and faceless hydra of inverted totalitarianism, it will be a new kind of fascism.

    I'm kind of excited.

    Reply

  4. The best way to decentralice corporate power is to abolish capitalism and have the entire country starve to death.

    Reply

  5. could we please get your thoughts on whats been happening with the Fed and the repo market, it seems like there are some crazy things happening the past 4 weeks or so and nobody is mentioning it anywhere

    Reply

  6. Many a Capitalist may proffer the end of Socialism but when I suggest that ALL THE ROADS be auctioned off, they become mute. Road are the Ultimate manifestation of Socialism. Too big to fail is the Capitalists want and is Corporate Socialism, nee, privatize the profits and socialize the losses. Quantitative Easing has now happened 4 times, and the bankers want more levity to screw your pension. Pension funds have Trillions of dollars at their breast, and the banks want to negatively gear that money, for they cannot make money at 1% or 0%, but they can make profits for themselves at MINUS 1%.

    Reply

  7. You can’t have a democracy in politics without democracy in the work place.

    A half measure of democracy is what we pretend to have. In reality there is zero democracy because the insane concentration of wealth has captured political power.

    Reply

  8. Think of a pool tournament where individuals and teams compete in a process of elimination and where only one winner will prevail. This is how corporate power is consolidated and is the fundamental driver of capitalism. Without this mechanism capitalists claim freedom is lost. In other words, we are free to compete where only one wins while all others get "owned" or "destroyed". Theoretically in capitalism, one entity can own the entire world and from Wolff's data looks to be headed that way. In essence, he who owns the world will indeed own "you". Just think of this as slavery 2.0. The question then remains. What are you going to do about this? Just because you are "owned" doesn't mean your boss doesn't take proper care of you or at least give you crumbs to live off of. For those that want to go down the rabbit hole, is this a form of Stockholm Syndrome or a negative-pole Munchhausen disease?

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  9. The down-voters of this video are corporate bootlickers…so sad they even exist-

    Reply

  10. Corporations is a product of a one take all capitalism economy model,
    Capitalism was created to accumulate wealth for a specie plan B and it's conquest of space,
    Yet with nations fragmented sovereignty, Capitalism die,…hmmm, my beautiful capitalism, my fews that benefits from my model, can't you understand?.

    Reply

  11. You know inequality is at the tipping point of revolution when capital distribution resembles Pareto distribution with large α. Some places, like Brazil, America and Saudi Arabia scream revolution.

    Reply

  12. well in the best of times of usa when corporate was at it`s peak the muricans where living their BEST days , today since the State started the wealth confiscation in order to supply an overgrown oversized parasitic state apparatus (as in it`s employees and milions of actives useless builldings that cost the tax payer ) working people have it hard because of taxes and corporations have it hard also because of taxes TAXATION IS THEFT PERIOD .

    Reply

  13. They run the system do to the structure of Capitalism. We need to remove Capitalism if we wish to end inequality, poverty, crime, war and environmental destruction.

    Reply

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