A 40 year campaign to make you believe that monopolies are just an aspect of nature has led us to believe that you can’t do anything about them. This is total nonsense and all we have to do is remember.
I was in Egypt on holiday in the summer and as usual I took a book by an author from the country I was visiting. I'm very glad I did; Naguib Mahfouz's Children of the Alley is quite simply one of the greatest novels of the 20th century that I have read. It is about many things but at its heart is revolution – five different revolutions in the same alley in fact.
Each revolution somehow changes the alley for the better, each in different ways. Then we reach the next book of the novel and we have jumped forward in time, the lessons of the last revolution have been forgotten and things are as bad as ever. “Forgetfulness is the curse of our alley” becomes its main, repeated refrain.
Which brings me to Scotland's city centres and the global equity industry. I have written about this relentlessly to the degree that I'm not sure what to recommend, so instead here is a pretty good summary of the problem by Neil McKay, here is the 'source document' for me, by the excellent Aditya Chackrabotty from years ago that explained in detail how Boots was destroyed, and then perhaps this from me on how equity controls commercial rents and is bleeding hospitality dry.
If you don't know this stuff then start with McKay, but the one-paragraph version is that private equity buys businesses not to run businesses but to extract all the money they can from the business before selling it on as a shell, and where assets can't be stripped, consumers can be via monopoly control of key industry sectors. It is all out and out exploitative.
As my colleague Craig points out, the logical extension of the current business model is that four equity firms and a couple of Silicon Valley tech companies will own absolutely everything in the world. As in even the things in your house. Once they crack the leasing market they will own your goods and force you to rent them back from them.
These guys are evil and this above all is exactly what Adam Smith warned us about. It is in effect neo-rentier behaviour, and Smith absolutely hated rentiers. He saw them as the antithesis of capitalism and he was right. Capitalism for Smith was a system of productivity, combining labour and captial assets to increase the value and utility of both.
Rent is rather 'kidnapping' assets and then putting a gun to the head of the people who need those assets and saying 'give me your money because you have no choice'. It is not productive, it does not improve society. And that is basically the dominant model in global capitalism now.
Amazon is a rentier company, seizing the access to online suppliers and basically extracting wealth from both sides (producers and consumers) to let them get access to each other. Uber is the same. So is AirBnB.
But then so is equity capital, in a different kind of way. It is not investing in the traditional sense of the word. It is not 'spending money now to seek productive gain such that the investment is worth more in the future'. It is buying assets and using those to extract forms of rent-like income. Breaking up a company, selling off its valuable assets and selling on the husk is more like being a landlord than a capitalist.
And when it comes to the high street, it's even worse, because one of the things equity capital went into in a big way was buying up commercial property when the retail boom was reaching its peak. Now it has a lot of assets which need to charge rents like we're still in a boom. Why is hospitality in so much bother? They tell you it is tax, but go and look at rents compared to other counties...
OK, so what is all this to do with an Egyptian Nobel Prize-winning novelist? It's that I often get asked after I do an analysis of how things have got so bad in the economy, 'what do we to sort this out?'. What is weird about this question is that it is usually asked in despair as if the answer is bound to be 'nothing'.
Yet the fact that we're asking the question is the telling thing. There is a whole world of long-established and highly-effective anti-monopoly policy levers. They dominated regulation of the economy in the years when our economy boomed – because back then people still remembered that monopoly was bad.
But have a look at our neo-monopolies. They are dominated by US technology and equity companies. This in itself is notable, because actually the US was the country that took the toughest line on monopoly (so much did the US emphasise the problem with monopoly that it isn't generally referred to as monopoly at all but antitrust, which is the policy package you use to defeat monopoly).
The neoliberal war on the antitrust was immense. If you want to know details there is lots to read (this is a fairly neutral take) but it is exactly what you'd expect – a corporate lobbying and corporate lawyer assault on antitrust laws and practices funded by wealthy corporations and oligarchs. And what they did was notable.
“We don’t fight not because we can’t but because we have forgotten how to fight and we have even forgotten that we can fight at all”
Because they didn't really dismantle antitrust laws (which they may come to regret), they just defanged the agency that pursued antitrust in the US and persuaded and entire generation of judges to ignore the wording of the law and instead come up with a sort of vibey-version of the law. For example, a disgraceful recent ruling in a case against Google concluded that yes, Google is an illegal monopoly that has seriously harmed others – but it might not always be because of AI.
The law doesn't say that at all, any more than the law allows for 'well he might stop beating his wife in the future'. But there is an enormous narrative campaign to make you think that fighting monopolies is (a) stupid because they reduced your costs and (b) impossible because free markets must be free.
But there is a reason the US came to hate monopoly – and it was the Robber Barons of the gilded age who created the Wall Street Crash. That basically happened again but this time the monopolists had the politicians in their pockets. It is only a couple of weeks since California Democrat Governor Gavin Newsom bullied his Attorney General into dropping a case against the clearly-illegal Paramount-Warner merger
And so it is not that we don't know how to fight monopoly because there is a giant history and extensive knowledge of how to do it. It is not that there aren't the tools to do it with because there are. Not much of the fundamental anti-monopoly law has been fully rescinded and it could all be beefed up very quickly.
It isn't that there is no will to do it because a sizeable group of the population are now sick to the back teeth of bullying tech behemoths. It certainly isn't illegal (those clowns the Easdale Brothers are a fucking embarrassment if they genuinely think bus regulation is state communism). And now we're out the EU there is really no legal impediment whatsoever.
Nope, our curse isn't weakness, it's forgetfulness. They've made us forget all of this. We don't fight not because we can't but because we have forgotten how to fight and we have even forgotten that we can fight at all.
So here goes, a ten second primer on anti-monopoly policy levers. First, you set strict rule on mergers. They cannot be allowed to reduce market choice. Then you limit by law the proportion of the economy that any one company can have. This will vary by sectors – you can cope with greater market concentration in supermarkets than you can in media ownership.
You can pass a law to break up a company. I repeat, the US could decide tomorrow that Google must break up its search engine, its advertising revenue, it's mail platform, its mapping facility. Amazon can be taken apart, breaking its supply chain management from its software front end. For example, it would no longer be able to dictate prices to suppliers if the platform and the sourcing were two different companies.
But you don't have to be that brutal – you can place conditions on companies you decide are demonstrating excessive market power. Back to Google – you could tell them that they can be a monopoly search engine but they can't take advertising revenue as well. The whole model of 'vertical integration' (every part of the chain in single ownership) is what anti-monopoly was trying to prevent.
You can force divestment in other ways. A pet policy of mine is to pass a law saying no-one can own more than two whisky distilleries and require management buyouts where someone owns three (this would take Scottish whisky back into Scottish ownership).
You can do all kinds of things on pricing – preventing predatory pricing, demanding consistent prices at all times, preventing cartel collaboration, price caps and so on. You can 100 per cent ban the appaling software which is 'cartel in a box' (this is software that multiple companies can use to say 'what is everyone else doing' and then do precisely the same, which is just a digitally-facilitated cartel).
You can flat out dictate what prices are in the market. That is what we do in our privatised energy market. You can really kick companies around in all sorts of circumstances. Don't forget that you can just nationalise them, or alternatively create nationalised competitors (Amazon is surprisingly easy to replace if you have an effective distribution network).
And then remember, this is all illegal. You can jail them, fine them, ban them from owning companies. And all of this is only a fast summary. There are lots and lots and lots of things you can do – read this and sign up to anti-monopoly newsletter Big.
The point above all is that so much of our weakness is learned weakness. We cannot do things because we choose not to do things or because we forgot we could do things or because we have been tricked into thinking we can't. I am so sick to the back teeth of neoliberals quoting Article One Protocol One of the European Convention on Human Rights at me.
They say 'you can't seize people's property so go away or we'll sue you'. To which I have to reply wearily 'arbitrarily; I can't seize your property arbitrarily, but I can pass a law that allows me to do it and there are already loads of them in statute which is how we compulsorily purchase land for roads...'
We choose not to fight. We are not powerless, we've just been tricked. If you're sick of monopoly you're not alone. But don't howl at the moon shouting 'Fucking Bezos!', email your MP and say 'what are you cowards doing about this awful situation?'. If they say they can't, well, you can copy and paste bits of the above and put them straight.