Multinationals and monopoly power
J K Galbraith on the multinational company
The two parts of the economy - the world of the few hundred technically dynamic, massively capitalised and highly organised corporations on the one hand and of the thousands of small and traditional proprietors on the other - are very different. It is not a difference of degree but a difference which invades every aspect of economic organisation and behaviour, including the motivation to effort itself. It will be convenient ... to have a name for the part of the economy which is characterised by the large corporations ... I shall refer to it as the Industrial System. The Industrial System ... is the dominant feature of the New Industrial State.
Source: John Kenneth Galbraith, The New Industrial State (1967).
This was a hugely influential book in the analysis of capitalism
In a world in which giant corporations control over 70% of the world's trade, carry out the bulk of new research and development (R&D), shape international markets through their advertising and exert a great deal of influence over price, it is difficult to find very much evidence of the perfectly competitive market of the economics textbook. The 19th century revolutionary, Karl Marx, was one of the few economists to correctly predict this growth of big business. While mainstream, orthodox economists mainly focused their attentions on markets with large numbers of buyers and sellers, with none large enough to influence price, Marx centred his attention on the likely growth of huge aggregates of capital having significant control over their markets, and with the ability to eliminate many of their smaller rivals: a process in which the stronger and more profitable 'mop up' the weaker, making for giant monopolies with enormous economic, and even political power.