Argument: Progressives combat anti-competitive concentration of capital
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Mark Pash, CFP with Brad Parker. "Progessive Economic Principles: Creating a quality economy.": "In a free enterprise environment, there is a continual, natural flow of capital to the powerful; the highly educated and already wealthy by various means, both legal and illegal or by shear luck. This natural concentration of wealth continually reduces both the number of businesses and ample individual consumers, eventually hurting commerce and society. All studies, computer models, research and statistics in the past and present validate this scenario.
Concentrated wealth, promoted by this flaw of capitalism, creates a system of, “The Rich get Richer” for both individuals and businesses. This natural bias to the already wealthy reduces competition and the number of adequate consumers. The antitrust laws were established to counter this monopolistic tendency in business enterprises. The fiscal system of taxing the rich and redistribution back to the many was created to solve this problem on an individual basis.
Adam Smith stated: “capitalists left to their own devices would rather collude than compete.” This means the natural goal of a commercial enterprise is to attain monopoly status, control or own all or most of their market. (The healthcare industry, medical insurance and pharmaceutical companies are prime modern day examples) This coincides well with the natural goals of many individuals to become as rich as possible. Both Republicans and Democrats have recognized this flaw. In 1890, the Republican Party passed the Sherman Antitrust Act, which was enforced by Republican President, Theodore “Teddy” Roosevelt. Years later, the Democratic Party started the Keynes fiscal policy of redistribution of income and wealth under Franklin Roosevelt.
This is why it is very important to have an adequate antitrust policy and enforcement. The more competition the better! Competition creates more employment, which creates more customers. It rewards efficiency, with profits and with losses, and makes it more difficult for individuals and businesses to gain monopolistic control of the marketplace. Diffusing power and distributing wealth are essential to creating a healthy business environment. If we cannot have this multi-firm free market competition, then we have to regulate the monopolies and oligopolies, including prices, to stimulate more competition.
Frankly, I think the word “redistribution” is the wrong word to describe this policy. It should be called “recirculation”. The vast majority of government spending including military is allocated domestically. It is not hoarded so that its recipients can live on its return. It is recirculated through the economy. These monies collected by taxes are spread to more individuals creating better consumers. These consumers are able to spend more in private enterprises, which create wealth for certain capitalists and to some extent for their employees. Unfortunately, this system can be thwarted to achieve the aims of the few rather than the many."