The Decay of Liberal Bourgeoisie Power

In theory, capitalism had envisioned “perfect competition” whereby equilibrium would be established in the market and competition would thrive. But reality suggests something different, in the sense that “big business” and corporate power ends up dominating the market and society. Capitalism evolves into big business and corporate power. But what is also inherent in big business and capitalism aside from capitalism’s evolution towards big business and corporate power is “Creative Destruction” or “Schumpeter’s Gale.” Newer markets and newer models of organization and newer structures end up emerging in the capitalist system through the course of time. To borrow from Schumpeter himself:

“The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation…that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.” 

In turn, we are witnessing the mutation or transformation of every industry we can think of, including government and politics, and technology is at the heart of these mutations and transformations. Technology is then coupled with globalization in order to serve as the main offshoots of a broader “decay of power” which then distributes power to new and emerging players in both the economy and government. As Moises Naim wrote: “Economic globalization adds yet more reasons to celebrate the decay of power among traditional megaplayers. Small, faraway companies now strip market share from corporations that have been household names; startups pioneer new business models that send corporate giants reeling.”

Globalization means that the “decay of power” is a global phenomenon and trend. Naim added that “new multinationals have emerged from countries that until recently no world-class company viewed as breeding grounds of potential competitors.” Thus, what is at the heart of “Creative Destruction” and globalization and the evolution of technology is the “decay of power” and specifically, the decay of liberal bourgeoisie power. To borrow from Naim: 

“We know that shifts in the pecking order of companies are as old as the modern market economy, and that a profound link between innovation and ‘creative destruction’ is at the heart of capitalism’s vitality. Yet, the massive global changes we now see go further. They could not have happened without the decay of power.” 

And all of it is good and quite swell. There is nothing to brood about, especially if you are a consumer or a voter, given that you now have more choices. As Naim wrote: “At the core here is something that is hard not to like: just as the decay of power in politics has undermined authoritarian regimes, in business it has curtailed monopolies and oligopolies while giving consumers more choices, lower prices, and better quality.” Monopoly and oligopoly translate into an abuse of power. Thus, the “decay of power” even in the corporate and economic realm prevents the further abuse of power. There is a general “distaste” for the abuse of power, especially through monopoly and oligopoly. To conclude, and to borrow from Naim: “Our distaste for monopoly extends to oligopolies and cartels. So the more the decay of power prevents small groups of large firms from exerting abusive market power, the more we are disposed to celebrate it.”