In Wealth of Nations,
Adam Smith foresees that capitalist industrialists could collude with
government at the expense of labor. In On the Genealogy of Morals,
Friedrich Nietzsche argues that keeping laborers to a subsistence wage is
necessary for capitalists to have enough wealth accumulated to invest in
culture. Rather than being immoral, exploitation is simply part of life and
thus the resulting economic inequality cannot be removed at its source. Low
wages may simply be a feature of how labor supply typically relates to business
demand for workers, whereas highly educated professionals are not so numerous and
can demand higher compensation. Meanwhile, what about consumers as capitalist
industrialists continue to accumulate capital in part by being able to pay
large workforces subsistence wages and engage in mergers and acquisitions, such
that competitive markets are turned into oligopolies and even, as in the case
of Rockefeller’s Standard Oil in the 1870s, monopolies capable of extracting “monopoly
rents”? In the U.S., the Sherman and Clayton Acts in the early 1900s were
oriented to safeguarding competitive markets from being undermined by business
titans, but enforcing those federal laws would seem to fly in the face of
collusion between capitalists and their respective governments. As a case in
point, the U.S. Justice Department gave the green light to Paramount’s
take-over of Warner Brothers/Discovery even as President Trump had a financial
interest in the deal going through. In the American federal system, the state
governments could act as a check, and on July 13, 2026, the announcement came
that California plus eleven other states, led by their respective attorneys
general, filed a lawsuit challenging the merger on the basis that it would
violate Section 7 of the Clayton Act. American consumers had reason to be
thankful that they were still in a federal republic of republics, even though
the growth of power at the federal level had nearly eclipsed the federalism, at
least as it was originally intended—as enabling checks by the feds on the
states and vice versa.
The full essay is at "California and the Eleven Dwarfs Take on the Paramount-Warner Bros Merger."
