> I was under the impression that the official reason for the breakup of
> ATT and the Bell System was to introduce competition into the
> telecommunications business. So, after all these years of annoying
> phone calls and junk mail from outfits like MCI and Sprint the new
> paradigm is back to mergers and consolidation of operations. Talk about
> ironic!
Tom,
There's no irony here in the sense of an incongruity between what might be expected and what actually occurs. Monopoly and competition are dialectically related. Each tends toward, and turns into, the other. Note that means monopolies don't last either. Capital, as self-expanding value, is nothing if not restless. Capital, sometimes different capitals, at different times, or even at the same time, wants to merge, destroy, and/or create.
The pace of change varies by industry, but in the past it was possible to argue that competition became monopoly faster and more easily than the other way around. That's one reason why there's those antitrust laws on the books that aren't used much. No firm *wants* to compete, particularly when it involves cost cutting and price wars, when they can buy market share through merger that they believe can protect their prices and profits.
Cost structure, particularly capital intensity, is important. Remember how fast competition in capital intensive airlines disappeared after deregulation. A mere whiff of deregulation has sent electric utilties on a merger orgy. They're trying to avoid the pain some airline companies experienced by consolidating before they have to "compete"! PECO, which serves Philadelphia and Commonwealth Edison, which serves Chicago, have announced a merger and they're not even interconnected. No major productive efficiencies there; it's all on paper and about control of prices through market share.
Busting up monopolies in the market place (rather than by govt fiat) is more complicated and problematic than creating them. It often requires technological change either within an industry or by creating new products or industries that give market entrants important advantages over incumbants. That used to take lots of time. Go back to (pick your decade), catalogue the behemoths then and trace through where they are now. But in some areas tech change has accelerated incredibly. How long do you think Microsoft's monopoly will last compared to, say, that of US Steel or Westinghouse (remember them?)?
Much of the recent (short run) competition for US based capital, which has provided the excuse for slashing workers' wages, has come from foreign capital--the interpenetration of capitals. Initially at least it is harder to merge across the globe. But not anymore. Capital is working hard to surmount that barrier too.
RO