The Economist eulogizes Karl Marx (bold emphasis mine)
WRITING in "Das Kapital" in 1867, Karl Marx observed that in the capitalist system competition "ends in the ruin of many small capitalists, whose capitals partly pass into the hands of their conquerors". This way, he posited, capital would become increasingly concentrated in the hands of a few. Out of the 6,000 or so companies whose primary listing is on an American stock exchange, the top 5% accounted for 70% ($10.6 trillion) of the market value and 90% ($765 billion) of the total profit in 2010. In 2000, the profit from the top 5% of companies was greater than 100%, offsetting the huge losses by the bottom 50%. The figures are remarkably similar for listed companies in Western Europe. Confounding the view of the "Occupy" protests taking place across the globe that the world is run by increasingly rapacious corporations, those proportions have declined since 2000 (the earliest year for which robust data are available). At the very top, the largest 1% of listed companies in America and Western Europe accounted for 53% and 48% of market value in 2000. In 2010, those proportions had declined to 40% and 28% respectively.
The Economist, if they are not engaged in a pun, has been guilty of logical sophism.
“Capital would become increasingly concentrated in the hands of a few” represents a post hoc fallacy; capital does not mechanically or automatically gravitate into the hands of a few. The Economist does not elaborate on the process except to irresponsibly and uncritically adhere to the Marxian creed.
Next, it would be a monumental folly to imagine that the world today as operating on a laissez faire ‘capitalist system’ considering the countless regulations, legal proscriptions, market manipulations and other forms of interventionisms in almost every social activity that one is engaged in, everywhere around the world.
Also by also engaging in reductio ad absurdum the article attempts to oversimplify correlations and the causation nexus between corporations and profit concentrations.
Such preposterous assertions assume away the influences, contributions and the effects of specific political policies on affected groups, the periphery and the rest of society, as well as, the impact of the incumbent legal environment and political institutions to the marketplace...which ultimately shapes the variable scale of interrelationships and degree of complicity between corporations and their respective governments (where they operate on).
As earlier pointed out, many of these huge companies has been beneficiaries of government concessions or political privileges as subsidies, cartels, monopolies, licensing, behest loans, tariffs, bailouts, private-public partnerships, tax credits, and sundry regulations that are essentially anti-competition based that has led to their current heft and widespread global reach.
In short, 'rapacious corporations' are the outcome of policies from political leaderships aimed at sustaining welfare-warfare based crony capitalist governance and not of the deceptive and logically bereft Marxist premises.
As Ludwig von Mises wrote of Marxism,
The incomparable success of Marxism is due to the prospect it offers of fulfilling those dream-aspirations and dreams of vengeance which have been so deeply imbedded in the human soul from time immemorial. It promises a Paradise on earth, a Land of Hearts Desire full of happiness and enjoyment, and — sweeter still to the losers in life's game — humiliation of all who are stronger and better than the multitude. Logic and reasoning, which might show the absurdity of such dreams of bliss and revenge, are to be thrust aside
Interesting post, but one statistic is insufficient to properlly conclude what you have included especially given that you only have two variable for comparison (2000 and 2010 figures for percent control of market value for largest 5% of companies on the NYSE). Though there may be no statistics prior to 2000, that does not make your conclusion anymore valid. Examine the fact that where many companies had a small share of the media, now only six major companies own the majority of the media, where once the 5 largest meat producers owned only 25% of the market, now the top 4 own 80%, where there were many "Ma & Pa" stores, now they are scare and being readily replaced by conglomerates like Wal-Mart and Target, etc. etc. You need more statistics to validate your argument, but even then I feel you'll only invalidate your argument is the search is truly unbiased.
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