The Robber Barons

At the risk of being a ‘grumpy old man’, it is a good time to round up the current state of monopoly capitalism in the UK. Post Marxist capitalism theory suggests that free markets will prevent the exploitation of consumers, as the consumer is sovereign and quality, service and honesty will be protected by the fact that ‘good’ capitalists’ will ultimately drive out the ‘bad’ capitalists. This is clearly not a happening. I don’t want to get into the reasons why. These might include quasi Marxist analyses, or the power elite model of C Wright Mills and Ralph Miliband, but it may be too early to say. What is clear, however, is that there is now a new class of robber barons, in the form of large corporations and their executives, who are using their market power and their conscious or unconscious collusion, to exploit consumers (the issue of worker exploitation is another thing altogether). I have compiled a list of ways in which robber barons operate, with prominent examples to illustrate: • Energy companies exploit and overcharge us by complicating tariffs and by not passing on reductions on wholesale prices. We all know very clearly that wholesale price increases are passed on in full, but reductions are not. They argue that large profits are needed for the purposes of investment, but there are no signs that investment is benefiting consumers in any significant way. • We all know about executive pay and bonuses. This is now clearly a conspiracy, with excessive remuneration packages being passed by remuneration committees that contain members who receive similarly excessive pay. The argument that, ‘to get the best you have to pay the best’ is palpably nonsense in view of the incompetence we have seen lately. Look at Barclays and G4S for perfect examples. • Aggressive tax avoidance schemes. Remember – if large corporations or wealthy individuals avoid tax, we – you and I – pay the tax on their behalf. This is not a ‘victimless crime’. We are the victims. • Budget airlines seek to deceive us on hidden charges. In particular they `lump on extra charges such as for travel insurance and place obstacles in our way if we want to tell them that we do not need these service. Try avoiding paying travel insurance with Ryanair. • Credit card companies add disgraceful charges and interest rates for those who do not pay off their balances regularly. The charges, fines and interest charges are way in excess of the real cost to them. • The behaviour of banks is very well documented. No need to elaborate. These are just a few examples of hos free market capitalism has become corrupted. It’s not all bad, of course. The Internet does seem to be serving the interests of consumers in terms of good service, choice and prices. I also think the jury is still out on the supermarket chains. They may be exploiting their suppliers, of course, but I’m not convinced that we customers get that bad a deal.