Concentration and Control

Let it be admitted at the outset: If there is a theory of monopoly—in the sense of a unifying explanation with some factual basis of the gradual transformation of competitive into monopolistic market organizations—I do not know of it.

There is something like a theory of monopoly in Schumpeter, but neither Marxists nor non-Marxists have taken it very seriously. In academic economics there is nothing resembling such a theory, apart from a single ingredient, decreasing costs, which is also associated with Marxism, where it figures importantly in the theory of capitalist development.

Marx rightly insisted upon the distinction between “concentration” and “centralization.” Concentration is nothing more nor less than capital accumulation itself, having no real significance for the growth of monopoly (although it plays a major role in the theory of capitalist breakdown). Concentration may limit competition, but there is no obvious reason why it sh...