The market killers

The Oligarchy needs robot customers.

By Gary Scarrabelotti

There should be a special prize for journos who take up the pen against our corporate monsters – beasts that bestride the country feasting off our family incomes. Call it The Menzies “forgotten people” Award.

Adam Creighton, Economics Editor of The Australian, would surely be shortlisted as among the first to carry off the gong.

Take his piece from the other day: “Telstra’s gouge not a patch on our big four banks” (The Australian, 1 October 2019).

Creighton called out Telstra on its 30 per cent premium on broadband fees; then the “big four” for

“charging ordinary customers between 1000 to 2000 per cent more than other service providers for foreign exchange services.”

Next, he gave a serve to power utilities and super fund managers:

“Go to the website of your superannuation fund and try to work out its fees. Try deciphering your power bill. Prices are deliberating confusing to make it hard to compare them.”

Then, in a wider sweep, Creighton stuck it to the oligopolists:

“The government’s ‘big stick’ policy to break up energy companies that gouge customers should be applied consistently across all sectors. Oligopoly is a problem in many industries, and such ‘sticks’ are standard in Britain and the US, which have a history of breaking up firms that get too big.

“The addition of an ‘effects test’ into competition law in 2017 — which has made it easier to prosecute big firms for acts that hurt smaller competitors — was a help. But without a stick looming as a penalty, big business doesn’t fear the change …”

Big beasts

We Australians are cocksure of ourselves and our country – greatest people, greatest place on earth! There is much – incomparable advantages, indeed – to be grateful for. Self-satisfaction, however, is repellent. What is so great – can we explain it to ourselves – about a country networked for oligopolies: Woolworths, Coles, and Bunnings, to add a few more instances?

What we suffer from is a network of giant, business-breaking, competition-busting parasites on the national corpus. And we, the people – habituated by their ubiquity and cornucopian allure; also reduced, in point of our humanity, to statistically defined consumer entities – we, the conditioned people, jerking and clinking like automatons, queue up to swipe our cards at their checkouts.

This, by the way, is considered to be a great accomplishment: a work not, however, of wisdom but of corporate power and political complacency – and, let’s admit it, of our own sheepish instincts.

 “… reduced, in point of our humanity, to statistically defined consumer entities.”

Creighton is right, then, about the need for a “big stick” option when dealing with excessive market power, especially in the provision of strategic services (or “public goods”) such as gas, water and electricity.  Shock and horror greet this idea at the big end of town: the triumph of “populism” over liberal free-market economics!

“Not the sort of thing you’d expect to hear from the Liberal Party.”

In structurally complex advanced societies, however, the provision of “essential” public goods cannot be left to ‘markets’ in which competition proves inherently limited or non-existent. In such instances, the state (and those who wield power in it) face stark and limited choices: rather than lose political legitimacy, the state must either nationalise or regulate. And, if regulation is the path chosen, then there has to be the ultimate sanction of depriving a private corporation of privileged access to a low-competition market.

Now that’s all heavy going and I sense you’re getting tired. We need an interlude.

Interlude

So, let’s take a trip. I’ll take you to a place I know. It’s quite foreign, I must warn you, and not at all salubrious. In fact, it’s rather ramshackle and broken down. But it’s a market day, so let’s go there. Could be … well, let’s see.

At the market’s centre there’s a concrete building, its interior spacious and sunlit: a Soviet-era ‘agora’. It’s surrounded, almost, by a tangled web of lanes – dusty in summer, slushy in winter – choked with makeshift booths.

We enter the lanes first.

Ah, see here: a chap in his tiny shop selling nails and screws and fixings. And right here, cheek-by-jowl: hubby and the missus, squeezed into a few square metres, deal in plumbing. Over on the right: an astonishingly tall, remarkably thin man trades in wires and cabling. Tucked in beside him: that thick-set menacing bruiser is the go-to man for mechanics’ tools. Nearby, an austere gent, looking like a Rublev icon, disposes of carpentry kit.  In fact, on non-market days, he’ll nip over to your place and do that repair job. Can’t fix the car, you say? Well “bruiser” may be able to help there. In fact, there’s ‘nothing’ that can’t be arranged here, if only you know how.

On and on we go, winding this way and that, through jostling passageways crowded with more tiny shops. One is selling crockery here; another, glassware there. Off to the left, a new lane opens up: ladies dresses on one side; shoes opposite; jackets and handbags up ahead.

Eventually we make it into the ‘agora’ itself, an echo chamber crowning an array of food stalls. Fruit and vegetables of variable quality are piled high. Intimidating women peer over the top of their mounds and shout for orders. In one quadrant of the building lies the butchery: ladies of a more engaging kind, all suitably dressed in red smocks, stand behind cuts of meat laid out on trestle tables. To their rear, a bloke in blood-splattered overalls is wielding an axe over a side of beef. There’s evidence of brutalism in the cuts.

On the way out, we spot a roundish, dark, uninviting chap sipping coffee beside a small hill of pomegranates. Unlike the butcher, this fellow is an artist. His hill is covered by a layer of exquisitely anatomized fruit. Their fleshy nakedness speaks directly to the senses.

“Yeah,” I hear you say, “picturesque … won’t take cards … quaint … no receipts … can’t get my bearings … lot of fun … plastic bags.”

“But, really, why’d you bring us here? Don’t they have malls? What’s your point?”

Cry freedom

Agreed, it’s all terribly inefficient. Primitive, even. And, yes, it’s possible that our purchases today might prove, later on, a matter for inquiry by the local tax police.

I’m not sure, however, that I want to end on an economic (or tax) note. Economics is a lifeless abstraction. Here, instead, we’ve encountered life, in full vigour and variety. And we engaged. Look, you’ve all managed to buy something and your faces are flushed and your smiling – even if, at the same time, some of you look rather perplexed. As for me, I’ve thoroughly enjoyed showing you about.

Still, you’ve asked a question. Let me answer with another. After real life, would we want to switch back to robot-mode? Do we want to clank off again to the daily line-ups at the corporate feeding stations, resigned hereafter to serve their insatiable appetites and to reward, over and over, their already grotesquely salaried execs?

This article was published originally on The Spectator’s Flat White blog.

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