Friday, 7 February 2014

Bring on the Corporatocracy

The other day I was watching commercial TV and I saw an ad for the new Coles MasterCard. This made me think. Coles and Woolworths seem to be taking over in every commercial sector.

Coles is owned by Wesfarmers which also owns Target, Kmart and Bunnings. Woolworths and Wesfarmers have created a duopoly. They have all the market power and are able to dictate prices to their suppliers. Traditionally, it has always been the seller that has set the price. This is fair. Farmers have to do the work to grow a crop and they should be able to set a price that covers all expenses plus a bit of profit.

These companies are so powerful that there is nobody else that farmers can sell their products to. This duopoly is able to dictate prices that are even lower than the cost of production. Suppliers have no choice, but to continue this arrangement because otherwise they would have no business at all. They are trapped in an unfair system. They can’t complain as Coles or Woolworths will simply stop buying their products - that is the unspoken threat anyway. And people wonder why the suicide rate is so high among farmers.

What worries me is the way these two corporations are extending their duopoly into other commercial sectors. I believe they wish to dominate other sectors in the same way they dominate shopping and groceries. They offer fuel discounts for those people that shop at Coles or Woolworths. This is how they use their market power to leverage themselves into other sectors.

They are doing a very similar thing with the financial sector with the Coles MasterCard. Eventually, every sector will be dominated by these two companies. They will basically own Australia - it will be a Corporatocracy.

I believe these companies need to be broken up into smaller companies similar to what the US government did to Standard Oil in the early 20th century. This will prevent the abuses that come with companies that have too much market power. It will bring back competition and maybe even improve the economy. Business as usual places too much power in the hands of too few. Power concentrated like this is never a good thing.

This duopoly needs to be ended ASAP.

1 comment:

  1. At least we've got Aldi eh? But then it's still just another big player.

    Empowering farmer collectives with newer technologies could be interesting.
    What if local farmers could organise well enough (for their mutual benefit) to have their produce delivered straight to your home with no grocer middle-man, via UAV if nessesary (we actually have the legal UAV framework to do this in Australia, lucky us).

    A great thing we're seeing more and more of in this internet age is new technologies which challenge the old Economies-of-scale. Maybe farms don't need to be huge to be able to make a living, maybe grocers arn't nessesary, maybe trucks arn't nessesary, maybe CEOs (with their predeliction to psychopathy) arn't nessesary.

    ... maybe soon enough, money won't be nessesary.
    HNNNNGGG *post-scarcity yearnings*