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Who owns the “invisible hand” of the Russian marketplace and what it does to Russia.
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Since the first day of the Russian Federation, liberalism has become an ideology which has been treated in the most privileged manner compared to another ideologies and religions. Liberalism has been promoted in Russia for over 30 years through media, as well as alleged "culture" and alleged "education".
Thus, in the strategy of higher economical education the doctrine of Adam Smith about the "free market" and its "invisible hand" is preached. And so on the bookshelves, I see textbooks and teaching aids with the inscription “The basis of the marketplace economy” on the covers. I wonder, where did the authors of specified textbooks discover the "market economy"? How about Mars?
There is no marketplace in the sense described in the textbooks. The marketplace economy is characterised by prices, called "balance prices" or "fair" resulting from the gathering of the request of millions of people with the supply of thousands of commodity producers.
Firstly, this gathering must be direct, without intermediaries. Second, it should be free. No 1 should prevent possible consumers from gathering with producers.
According to Adam Smith, you can interfere with this. The English political economist so powerfully warns that the state does not stick its nose in the economy and does not interfere with the "invisible hand of the market".
The textbooks tell students about "market paradise", but in real life they see another image that sometimes resembles hell.
However, the point is that students are not told very clearly (and sometimes not at all) what the mysterious “invisible hand of the market” is. all hand must have an owner. Therefore, the “invisible hand of the market” has the owner. It's called Monopoly.
And this owner, whose name (or alternatively the brand) everyone knows, tries to make his hand invisible. And to this end, the owner is doing everything possible to make the average man believe in the existence of any magical marketplace hand invented by Adam Smith.
There were individual monopolies in human history. Even in ancient Rome. But they only functioned in any markets. At the beginning of the modern era (i.e. during the transition from late feudalism to early capitalism) monopolies began to appear regularly. For example, the British East India Company was established in 1600.
In 1602, – Dutch East India Company. French, Portuguese and Austrian East Indian companies later appeared. But specified monopolies did not cover the full economy of the countries of origin. In those days many markets indeed had signs of being "free."
Free markets yet began to fade in the 1960s and 1970s, erstwhile monopolies began to appear massively in the Old and fresh World. This is described in adequate item in the work of W.I. Lenin “Imperialism as the Highest phase of Capitalism” (1916).
The classical says that the concentration and centralization of capital inevitably leads to the creation of monopolies which first take control of national markets. Later, they began to control planet markets and began to transform from national monopolies into global monopolies.
Lenin's work is provided with rich statistical material that illustrates how the concentration and centralization of capital in England, France, Germany, the USA and Russia occurred during about half a century (before the outbreak of planet War I).
In russian times, textbooks of the political economy of capitalism described the process of concentration and centralization of capital in adequate detail. Although anti-trust laws have been introduced in western countries since the late 19th century, the state has not been able to halt the attacks on monopolistic capital. These laws either were openly ignored. Or they were celebrated masterfully.
Statistics show that this process continued after both planet War I and planet War II. My library contains many books detailing the process of strengthening the position of the largest Western banks and corporations, any of which were even close to becoming absolute monopolists (more than 50% marketplace share or industry).
It is worth noting that present in economical textbooks information on "concentration and centralisation of capital", "monopolisation of the economy", "monopolistic prices", etc. is very low. due to the fact that if you dig into these topics, there may be an illusion that we live in a “free market” and “market economy”. And someway it is indecent to talk about monopolizing the Russian economy, since Article 34 of the Constitution of the Russian Federation states: "Economic activity aimed at monopolising and unfair competition is prohibited".
The authorities are constantly telling us that in our country the Basic Act is mostly respected. This means that we are not dealing with "monopolisation and unfair competition". There may, of course, be exceptions.
But why compose about exceptions in textbooks? In addition, we have the alleged “Federal Antitrust Service” (FAS), which aims to destruct cases of “monopolisation and unfair competition”.
As they say, citizens can sleep peacefully and be certain that the "invisible hand of the market" day and night works for the common good. Utopia of the "market paradise" in Russia is strictly guarded.
In America, at the end of the 19th century, the Sherman Act (Law Against Trusts) was adopted, followed by a series of antitrust laws, and a national Trade Commission was established in 1914, which, together with the Department of Justice, was intended to halt any monopoly. Nevertheless, the process of monopolizing the American economy continued relentlessly.
Quite a large number of Americans (businessmen, economists, politicians, and even average citizens) closely monitor the situation in the markets and sectors of the country's economy in terms of monopoly.
By the way, American investors and speculators are very keen to buy securities issued by the most monopolized companies. The degree of marketplace monopoly can be measured.
The most popular indicators are the Herfindahl-Hirschman (HHI) index and concentration factor. They service the antitrust authorities to find the marketplace power of the company. The HHI indicator is more accurate (sums the squares of the shares of all companies), but is utilized by a very narrow group of experts. The concentration index (summing the shares of the leading companies according to a number of indicators, primarily sales) is more popular and more visual.
In the United States, the Bureau of statistic publishes data on the concentration of industries all fewer years, and independent experts calculate indicators each year. The same indicators are officially calculated in many another countries. Monopolization grows relentlessly everywhere.
Unfortunately, neither the Ministry of economical improvement nor the FAS nor Rosstat supply specified estimates in Russia. However, private experts execute this work for the state and manually calculate the indicators. For example, experts from a well-known Russian company BCS (*) financial activity, they calculated the concentration origin for the leading sectors and sectors of the Russian economy in 2021.
The share of the 4 largest companies in sales of the manufacture developed as follows (%):
Exchanges – 100
Fertiliser production — 98
Telecommunications business — 97
Gas production – 89
Non-ferrous metals – 84
Retail – 82
Air transport – 78
Bank activities – 72
Oil production — 69
Iron Metallurgy – 46.
Some Russian companies may apply for an absolute monopoly (i.e. manufacture or marketplace share exceeding 50%). For example, the home marketplace share of MMC Norilsk Nickel S.A. represents about 96% of the full nickel produced in the country, 55% copper and 95% cobalt. In the stock exchange sector, the Moscow Stock Exchange is considered specified an absolute monopolist. The Moscow Stock Exchange accounts for 80% of trading in shares and 60% of trading in OTC trading.
A very fewer works by Russian authors are tasked with assessing the dynamics of the degree of monopolization of the national economy, as well as comparing the levels of monopolization of the economies of Russia and Western countries. They conclude that monopoly in the Russian Federation is growing. And in terms of monopoly, Russia is ahead of even America. Therefore, D.W. Kornieyev in his work “The impact of the merger transaction on the concentration of production in the Russian industry” concludes the following: "In most of the industries concerned, the concentration of production in Russia exceeds the concentration of production in a akin manufacture in the United States."
Not only independent experts, but besides any officials and politicians are forced to talk about the increasing monopoly of the Russian economy. At the beginning of this year, the Vice-President of the Commission for the Protection of Competition of State Duma Sergey Lisowski, in an interview with Komsomolska Prawda, admitted: “Unfortunately, there is simply a tendency to monopolize the full industries of the economy. In particular, we are dealing with monopolisation of the agricultural sectors ..."
A typical of the nation gave many examples of overpriced prices of industrial products, consumer goods and services. He stated that the monopolies not only imposed taxes on the full population, but besides cut off oxygen for tiny and medium-sized enterprises: "In fact, monopolization oppresses the economy and destroys average and tiny enterprises which are the driving force (growth accelerator – V.K.) of any economy" He besides pointed out another, seldom mentioned negative monopolisation: "In addition, monopolisation leads to lower quality of goods".
Monopolisation is not just a social and economical problem. It is simply a powerful brake on technological and technological progress.
Incidentally, this is stated in the same work "Imperialism as the highest phase of capitalism", in chapter 8 entitled "Pasosity and the Fall of Capitalism": "As we have seen, the deepest economical basis of imperialism is monopoly. It is simply a capitalistic monopoly, that is, 1 that grew out of capitalism and is located in the general environment of capitalism, commodity production, competition, in a continuous and hopeless conflict with this general situation. However, like any monopoly, it inevitably generates a desire for stagnation and decay. Since monopolistic prices have been established, at least temporarily, incentives for method advancement and so for any another progress, to any degree disappear... Example: In America, a man named Owens invented a bottle machine, which revolutionized the production of bottles. The German bottle cartel buys Owens' patents and sweeps them under the carpet, delaying their use.
Of course, the monopoly in capitalism is never able to completely and for a very long time destruct competition from the planet marketplace (it is, by the way, 1 of the reasons for the absurdity of ultraimperialism theory). Of course, the anticipation of reducing production costs and expanding profits through method improvements works in favour of change. But the tendency to stagnation and decline, characteristic of the monopoly, in turn continues and in any industries, in any countries, takes control for a time.
I would like to point out that over the last century there have been no fundamental changes in the mechanics by which monopolies hamper technological progress. I will proceed the discussion on monopolization of the Russian economy in the next article.
Written by W. Katasonov
(PL)
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(*) Brokercreditservice is simply a Russian company, or fundamentally a group of companies, dealing with financial activities. The office are located in Novosibirsk.
In 2020, BCS Broker, BCS Premier, BCS Management Company, BCS Capital, BCS Ultima Private Banking, BCS Bank and BCS Life Insurance were united under the BCS planet of Investments brand.
As of August 2021, BCS has about 56 1000 active customers on the Moscow Stock Exchange, in this respect it ranks 4th, At the same time, BCS ranks first in terms of trade in shares and shares between participants of the Moscow Stock Exchange. In 2019, he was besides the largest non-bank broker in Russia.
In 2018 the net profit of BCS was 5.7 billion rubles, assets according to IFRS – 256 billion rubles[6], capital – 33 billion rubles
Underside: https://ru.wikipedia.org/wiki/%D0%91%D0%9A%D0%A1_(%D0%BA%D0%BE%D0%BC%D0%BF%D0%B0%BD%D0%BD%B8%D1%8F)more
