NCJ Number
57894
Journal
Contemporary Crises Volume: 3 Issue: 2 Dated: (APRIL 1979) Pages: 171-186
Date Published
1979
Length
16 pages
Annotation
FOCUSING ON THE EFFECTS OF MONOPOLIES ON THE AMERICAN MARKET SYSTEM, THIS CRITIQUE ARGUES THAT MONOPOLISTIC PRACTICES TOO OFTEN GO UNCHALLENGED AND THAT THEY MAY CONTRIBUTE SUBSTANTIALLY TO TRADITIONAL CRIME.
Abstract
BECAUSE OF THEIR SIZE, MONOPOLISTIC CORPORATIONS ARE ABLE TO CONTROL ECONOMIC EVENTS WITHOUT CONSTRAINTS IMPOSED BY MARKET COMPETITION. FIRMS HAVING SUCH POWER CAN USE IT TO ILLEGALLY EXPAND MARKETS, CREATE BARRIERS TO ENTRY, ELIMINATE COMPETITION, AND CONTROL WAGES, COSTS, AND PRICES. THE RESULT IS THAT MONOPOLIES POSSESS AN INORDINATE POTENTIAL TO GENERATE ILLEGAL INCOMES. THE LEGISLATIVE BASIS FOR CONTROLING THE ACQUISITION AND ABUSE OF MARKET POWER ARE THE SHERMAN ACT, THE CLAYTON ACT, AND THE FEDERAL TRADE COMMISSION ACT, AS WELL AS SUBSEQUENT AMENDMENTS. THESE LAWS, HOWEVER, HAVE INHERENT WEAKNESSES; THEIR ORIENTATION IS TOWARD CONDUCT RATHER THAN STRUCTURE. THAT ANTITRUST LAWS HAVE LAGGED BEHIND IN PRACTICE IS EVIDENT FROM COURT DATA: 70 PERCENT OF CONVICTIONS HAVE RESULTED FROM PLEAS OF NO CONTEST. ADDITIONAL CONSTRAINTS RESULT THE JUDICIARY'S RELUCTANCE TO INTERFERE FOR FEAR OF IMPAIRING INDUSTRIAL EFFECIENCY. THIS COMBINATION OF LIMITATIONS INHERENT IN BOTH THE LAW AND JUDICIAL PRACTICE PLACES GREAT LIMITATIONS ON ANTITRUST ENFORCEMENT. ALSO, BECAUSE OF THEIR GREATER SIMPLICITY OF ISSUES, ENFORCEMENT AGENCIES TEND TO CONCENTRATE ON SMALLER CASES IN WHICH THE DEFENDANT IS MOST LIKELY TO BE A SMALL, COMPETITIVE SECTOR FIRM. GIVEN THE STRUCTURE OF THE LAWS AND JUDICIAL ATTITUDES, THE PROSECUTION OF VIOLATIONS IN THE COMPETITIVE SECTOR IS OUT OF PROPORTION WITH THAT SECTOR'S POTENTIAL FOR GENERATING ILLEGAL WEALTH. THIS INSULATION OF MONOPOLISTIC PRODUCERS FROM ANTITRUST PROSECUTION ALSO CONTRIBUTES TO THE CONDITIONS GENERATING TRADITIONAL CRIME IN THE COMPETITIVE SECTOR. EXISTING LEVELS OF MONOPOLIZATION ARE ESTIMATED TO ACCOUNT FOR AN ANNUAL REDUCTION IN NATIONAL INCOME OF AT LEAST 6 PERCENT. WHILE THE WEALTH STATUS OF TRADITIONAL OFFENDERS LIMITS THE GAINS WHICH ANY SINGLE OFFENDER MAY REALIZE, AND WHILE THE MAGNITUDE OF INCOME TRANSFERRED IS A SMALL PERCENTAGE OF TOTAL COMPETITIVE SECTOR INCOME, THE AGGREGATE INCOME TRANSFERED IS LARGE RELATIVE TO COMPETITIVE SECTOR MARKETS. FOR EXAMPLE, IN 1972, AN ESTIMATED $12.4 BILLION WAS LOST TO BUSINESS THROUGH TRADITIONAL CRIME, WITH A DISPROPORTIONATE PERCENTAGE AT THIS FALLING ON SMALL BUSINESS. REFERENCE NOTES ARE INCLUDED.