Monday, December 06, 2004

More updaty goodness, plus maybe some political stuff

Currently reading much political economy, including Shumpter's "Capitalism, Socialism, And Democracy," And Paul Baran and Sweezy's "Monopoly Capital." I've been working quite alot, though I may take up a secondary job, in some form of commission based sales, to test my mettle in those matters.

Beyond that not too much is up with me. I have been contemplating the role of partial monopolistic economies (oliopolic capital), non-price competition, and the nature of transnational corporate power. All anecdotal evidence and deductions I've made seem to reaffirm my notion of the decline of the nation state, and though allready quite dead, the further decline of what Marx referred to as the "petty bourgeoise", or small business owner. Or rather, I believe should I look (which I have yet to have the opportunity to do), I would find that the majority of small businesses are in fact brand-franchises, and thus simply ancillory extensions of big business. (Or, if not allready established in fact, the fastest growing portion of small businesses, however, this fact seems apparent enough on its surface.) While this would on its face, in rhetoric, seem to promote the idea that big business is in fact "sharing the wealth" by extending its functions to decentralized independantly owned franchises. However, the simple economic fact of the matter is anything but, small businesses only make up approximately 5% of the total GNP, despite being many times more numerous than large businesses. However, the franchising aspect has in its systemic design the end effect of further merging the interests of the petty-bourgoise franchise owner, with oliopolistic provider. Thus, this will serve the long term effect of making them an arm of the managerial class, while also merging direct small ownership. This trend is reinforced by the primary mechanism of competition among corporations which are integrated into the state of oliopolistic capitalism: Brand competition. The power of branding to draw demand, often reguardless of relative quality or price, puts a significant power leverage of the branded "independant" franchise, vs. the non-branded petty-bourgoise. Beyond that, the control, especially in reguards to competition with other firms cements power further in the hands of the supplier corporation, rather than the franchise owner. To illustrate, in order to expand his franchise, (which is often a liscense to operate in a specific territory, of a specified range and market share), the owner must meet goals established by the parent corporation, and directed down to him, he must also obey non-competition rules, with reguards to products owned or produced, branded, or liscensed by the parent corporation. This helps control pricing of comparitive substitutional goods, and also controls market prices of the same goods within a relative close area, by preventing providers of the same goods (two franchise owners of the same franchise) from competing with eachother. This structure allows as well for a shifting of costs of operations (and success or failure in a given market, locale, or other classification) to another party, meaning that the parent corporation is mainly responsible for distribution, product branding or creation (often products are not created by the parent corporation, merely rebranded in their image), and national advertising or "brand creation".

Thus it follows that localized non-franchised stores will inevitably lose out, in the long run, (or else be bought out and supplanted), by national and international oliopolistic brand stores. They simply have no relative competitional ability, the branded store is able often to draw in customers without even offering a comparitve price or quality advantage, but merely the perception of higher quality or lower price. Wallmart is a prime example of this, though not a franchise corporation (but rather one composed more along the lines of traditional managerial class structure), it has successfully branded itself as offering lower prices than the competition, while in reality on most household goods (discounting "loss-leaders"), it does not have lower prices (a study found that on 15 different common household items, Wallmart had lower prices on only 1 item). Or, it can substantially lower prices at outset, at or well below cost, and bleed the local competition to death, and simply supplant them. Between however, two or more significantly large competing corporations, this tactic is not used. Firstly, among larger corporations the main competition element would be advertising, and product differentiation (thus creating the perception in the public mind, that equivilent substitution goods are effectively not substitutions), if however there are more than two large competitors, as soon as at least one competitor has a significant market share many times in excess of its least competitor, it will engage in price competition. Otherwise it will not, in order to avoid a price war, in fact, even under conditions of relatively equal market share among large competitors, even brand competition may be kept to more minimal levels to avoid "brand-waring", if it would create openings for smaller competitors to climb up the latter. (A clear example of this, is coke vs. pepsi, which while they compete, keep their competition levels in the U.S. at least, to minimal amounts, and often push different variations of their products at the same time, to keep smaller beverage companies from getting a larger share of the beverage industry.)

Now to relate to my facet about the continuing decline of the nation state, in terms of anything but symbolic power. Firstly its spelled out in the fact that over 2/3's of international trade is now carried out not by nations, but by Trans-National Corporations (hereafter referred to as "TNC's"). Secondly, its spelled out by the actual purchasing and asset power of certain extremely prominent corporations, which utterly dwarfs the GNP of entire nations, and often groups of nations. To put the matter succinctly: The world's richest 16 people have more assets and income than the entire GDP of the continent of Africa. Also the ratio of inequality both among persons within any given economy (as a rising trend), but also the rising rates of inequality of between the richest and poorest nations. During the time of British colonialism, the ratio was only around (depending on what precise period) 3 to 1, or 5 to 1. Now it can be represented in quadrouple digits. This trend is only likely to increase, because the structure of international trade relations is (of course) geared both in quality, quantity, and profitability toward those nations with allready high development standards and high relative GDP. (The most blantant illustration of this oliarchial dollar-voting system is written into the structure of the World Trade Organization, where vote is decided by a country's GDP. Thus ensuring in written fact, the object lesson of bourgoise democracies around the world: That the rich inevitably have more political power and rights than the poor, so in the arena of international trade, which public attention is historically absent minded about, it isn't necissary to dispense many illusions to the contrary.)

On the surface, this last point might seem to support an idea contrary to my premise: that rich nation states will increase in power, given the structure of international trade, rather than corporations. Except this ignores certain political factors: Namely that in democratic countries, electoral candidates largely depend on political investments (euphamistically called "donations") from large corporations, as such that the functioning of large business interests, and the government become relatively indistinguishable. (Consider the fact, that the massive nature of these corporations, and the sophistication and efficiency of their propoganda machines, and their ability to centrally plan their development [and indeed the development and shape of entire sections of economic, political, and social life], would put the former Soviet Union, or the PRC to shame.) And that most auto-cratic countries are (if they have no centrally critical resources: like oil) more or less supplicant to the pressures of international corporations, if they want any significant development. They are also, in either case (meaning: critical resource or not), relatively easy to bribe, (more so than democratic countries, in the naked sense, although in democratic countries the bribing is simply instutionalized in the form of pressure groups, "donations" and policy think-tanks.)

Also, most tellingly, as Marx described one of the most blantant contradictions of early bourgeoise democracy, in specific reference to the French constitution adopted in 1848: "The most comprehensive contradiction of this constitution consisted in the following: the classes whose social slavery the constitution is to perpetuate, the proletariat, peasants, petty bourgeois, it puts in possession of political power through universal suffrage. And from the class whose old social power it sanctions, the bourgeoise, it withdraws the political guarantees of this power. It forces its rule into democratic conditions, which at every point help the hostile classes to victory and jeapordize the very foundations of bourgeoise society." (The Class Struggles in France: 1848-1850" International Publishers Edition, New York, 1934, pp. 69-70) While it can easily be argued that Marx was short sighted in this estimate (underestimating political apathy, and the forces of deception and disenfranchisement, not to mention social disintigration), it provides a telling backdrop for the arena of international trade. Namely, that the structure of international trade which is geared toward providing rich nation-states with increasing power also contains the seeds of the demise of their own power: Namely, it gives even more power to "their" companies (which may at any time, effectively leave "their" country, if the business environment should ever become undesireable, in that a corporation has no specific nationality, and their often international shareholders need not either), which accomplish the tasks it seeks to gain from such wrangling. (the nation-state currently serves the function of being the enforcing arm of violence in these arrangements, although its questionable whether it will retain that title forever.) Secondly: It gives them the right to sue sovereign nations, thus establishing them in legal fact as immortal soverign entities in their own right. To put it bluntly, most nations do not even allow their own citizens to sue the government (and even in those which do, not in this way, nor with as much concieveable chance of success). Thus this, along with their increasing economic performance as entities unto themselves, their nebulous nature, and global reach, spell the seeds of the demise of the nation-state as an effective embodiment of "real" power.



More on all this later

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