Abuse of economic power

Dependence on abuse of economic power

Nature

Abuse of economic power refers to the improper or unethical use of a dominant market position by individuals, companies, or organizations to restrict competition, exploit consumers, or manipulate markets for personal gain. This problem often manifests through practices such as price fixing, predatory pricing, monopolization, or unfair contractual terms. Such abuses can stifle innovation, limit consumer choice, and create barriers for new entrants, ultimately harming the overall economy. Regulatory authorities and competition laws aim to prevent and address the abuse of economic power to ensure fair and competitive markets that benefit society as a whole.

Background

Abuse of economic power emerged as a global concern during the late 19th and early 20th centuries, as industrialization enabled corporations and monopolies to dominate markets and influence governments. Landmark antitrust cases, such as the U.S. Standard Oil breakup (1911), highlighted the dangers of unchecked economic concentration. Over time, international organizations and watchdogs have increasingly scrutinized cross-border mergers, price-fixing, and market manipulation, recognizing their profound impact on competition, consumer welfare, and economic stability.

Incidence

A 2001 study showed that 44 of the U.S. corporations in the top 200 list failed to pay the full 35 percent standard corporate tax rate from 1996 to 1998. In 1998, seven companies—General Motors, Texaco, Chevron, Pepsi, Enron, Worldcom and McKesson—actually received rebates for taxes paid. Despite their market share and continuing growth, the top 200 companies employ only a fraction of the world's workers. In 1999, they employed 0.78 percent of the world's work force, compared with their 27 percent share of world economic activity. And while corporate profits grew 362.4 percent between 1983 and 1999, the number of people employed by these same companies only increased by 14.4 percent.

Claim

Abuse of economic power is a grave and urgent problem that undermines fair competition, deepens inequality, and erodes trust in institutions. When powerful corporations or individuals manipulate markets for their own gain, they exploit workers, stifle innovation, and harm consumers. This unchecked dominance threatens democracy itself, concentrating wealth and influence in the hands of a few. Addressing the abuse of economic power is essential for justice, prosperity, and the health of our societies.

Counter-claim

The so-called "abuse of economic power" is vastly overstated and hardly a real problem. In a free market, businesses succeed by offering better products and services, not by exploiting power. Competition naturally keeps companies in check, and consumers always have choices. Government interference only stifles innovation and growth. The obsession with economic power abuse is a distraction from genuine issues and does nothing but hinder progress and prosperity.