To reduce inequality, monopolies in finance and other economic sectors should be broken up or made public, says Polly Cleveland on theAnalysis.news podcast with Paul Jay.

Paul Jay

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There's a lot of talk these days about the tech monopolies: Apple, Google, Microsoft, Facebook and Twitter. The Senate recently issued a report and grilled tech leaders who are assailed from all sides for having too much control over the flow of information. Most modern capitalist countries have some sort of anti-trust legislation recognizing that private monopolies in any sector of the economy inhibits competition and creates concentrated wealth and political power.

Even most capitalists in the end think completely unregulated and unrestrained monopolies are not good for capitalism. First, one sector of the elites can become so powerful they essentially take over the government. [Franklin] Roosevelt said this was the very definition of fascism. Such monopolization also makes workers and consumers -- who are actually mostly the same people although they're often talked about as if they're not -- subject to lower wages and higher prices. This is also not good for capitalism as a system even though it might be good for some individual capitalists as it lowers demand for products and tends to make recessions longer and more frequent.

There are various approaches to what to do about the current state of monopolization. While tech gets most of the public attention, I think an even more dangerous concentration of wealth is in the finance sector, which to a large degree owns much of big tech. I've written an article about BlackRock, Vanguard and State Street asset managers who together control more than $14 trillion dollars under their control. That's more than the GDP of China. Institutional investors like these Big Three have effective control of voting stock across 90 percent of the S&P 500 and beyond. While they don't control these companies on a day-to-day basis, to a large extent they get to choose who does. The other major banks wield enormous power in every sector of the economy. And while Roosevelt said that it was the banks that were behind the monopolies, ownership has only become more concentrated since his day.

So, what should be done with the monopolies?

Some say, break them up. Some say, regulate them. Some say, create publicly owned banks and other enterprises that compete with the privately-owned ones, regulate private monopolies in the public interest when they exist in critical sections of the economy. Roosevelt advocated that, too.

Now joining us to discuss this, and hopefully from this point on to monopolize the conversation, is Mary Cleveland -- she's known as Polly Cleveland.