Abuse of economic power

Dependence on abuse of economic power

Nature

Abuse of economic power refers to the unethical or illegal 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 as price-fixing, monopolistic practices, predatory pricing, or unfair contractual terms. Such abuses can stifle innovation, limit consumer choice, and create barriers for new entrants, ultimately harming economic efficiency and social welfare. Governments and regulatory bodies address this issue through antitrust laws and competition policies to promote fair markets and protect public interests.

Background

Abuse of economic power emerged as a global concern during the late 19th and early 20th centuries, as industrialization enabled corporations and dominant market actors to manipulate markets and suppress competition. Landmark antitrust cases, such as the U.S. Standard Oil breakup (1911), heightened international awareness. Over time, globalization and the rise of multinational enterprises have intensified scrutiny, prompting international organizations and governments to address cross-border abuses and their impact on economic fairness and development.

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 our institutions. When corporations or individuals exploit their dominance, they stifle innovation, exploit workers, and manipulate markets for personal gain. This unchecked power threatens democracy itself, concentrating wealth and influence in the hands of a few. Addressing this abuse is essential for justice, economic stability, and the well-being of society as a whole.

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 weeds out bad actors, and government interference only stifles innovation. Claims of economic abuse are often just excuses for inefficiency or failure. The market regulates itself far more effectively than any external watchdog ever could.