Capitalism's Opportunity Monopoly: Inequality and Power

Introduction: Capitalism and the Promise of Equal Opportunity

The concept of capitalism is often associated with free competition and equal opportunity — a system in which any firm may compete and those with an entrepreneurial spirit may rise to the top of business or politics. In a recent article published by The Atlantic, Liu argues that rather than distributing opportunities equally, the system of capitalism found in the United States constrains and exacerbates existing economic, and therefore social, stratification. The basic argument is that the rich are getting richer while the poor are getting poorer, effectively creating an opportunity monopoly (Liu 1). The issue is not limited to economic power; it extends to the way that economic power shapes social power, including political and commercial influence (Liu 1). By examining this article and its underlying arguments, it is possible to appreciate the way in which ideals can differ from rhetoric when implemented in reality — a tension visible in the political environment reflected in the campaigns of both Trump and Sanders (Liu 1).

Tocquevillian Ecology and the Ideal of American Capitalism

The concept of capitalism and the free market has its basis in the idea of laissez-faire, proposed by Adam Smith as the optimal approach to markets, one characterized by minimal state interference. The idea is that market forces will drive markets to act efficiently, so that suppliers adjust in response to demand. When looking at early America, Alexis de Tocqueville observed a form of capitalism that did not suffer from the same difficulties seen in Europe. He argued that the common man was able to benefit from a culture in which hard work and wealth creation were the dominant pursuits, rather than the aristocratic ethic found on the other side of the Atlantic. Effectively, although capitalism existed, he argued that the process had not resulted in the crass individualism associated with market capitalism elsewhere.

In Book II, Chapter 28, entitled "Why among the Americans All Honest Callings Are Considered Honorable," de Tocqueville stated: "Among a democratic people, where there is no hereditary wealth, every man works to earn a living.... Labor is held in honor; the prejudice is not against but in its favour." Liu implies that this approach to capitalism existed in the United States for a period of time, referring to it as a "Tocquevillian ecology." However, he argues that this model of capitalism is no longer present, as power has become increasingly concentrated.

Market Dominance, Disruptive Technology, and Concentrated Power

The reason for this concentration is laid firmly at the door of capitalism itself. Those who profit from markets may claim to prefer free competition, but in reality they tend to favor monopoly when it works in their interest. Effectively, capitalists support free competition when they are the competitors, not when they are the dominant player. This creates a difficult dynamic as companies seek to establish dominant positions. In the past, antitrust legislation was effectively utilized to prevent organizations from growing too large or too powerful, especially through acquisition or merger.

However, in modern society the problem associated with disruptive technology is its ability to deliver enormous market power to a small number of firms — and therefore a limited number of individuals — without triggering traditional regulatory constraints. For example, the internet search engine Google now dominates web searches worldwide. This dominant position was not gained through the acquisition of rival search engines but through disruptive technology that secured a commanding market position. One may observe the same dynamic with other dominant firms, such as Microsoft with its Windows operating system. When a firm achieves such a dominant position and then leverages it across related markets, it can become entrenched, making genuine competition extremely difficult. That dominant position becomes self-perpetuating, continually deepening the concentration of power. While those involved may speak publicly about the benefits of free competition, one need only look at the Microsoft antitrust case — and the tenacity with which the company defended its position — to appreciate how highly concentrated market power is valued by those who hold it.

Conclusion: Reversing the Opportunity Monopoly

Brandeis is likely to have argued for a more liberal, or leftist, approach to market policy — one that placed significant emphasis on combating anti-competitive behavior in order to increase competition not only in the economic arena but also in politics. Such an approach would help to rebalance the current distribution of power and counter the bias it maintains toward those with economic privilege, who have a vested interest in preserving the status quo.

However, given prevailing attitudes toward individualism and capitalism, and the way political rhetoric is used to justify rising inequality, it appears that unless more decisive action is taken and public attitudes toward social inequality begin to shift, the monopoly of opportunity is likely to remain firmly in place.

Works Cited

Liu, E. "End the Opportunity Monopoly." The Atlantic, 2016. Web.

de Tocqueville, A. "Why among the Americans All Honest Callings Are Considered Honorable." Democracy in America, Book II. Web.