Monopoly

On the basis of highly concentrated production and capital, one or a few large enterprises unite to monopolize or control the production and sales of corresponding departments.

At the end of the 19th century and the beginning of the 20th century, capitalism had some new changes and new phenomena in the process of development and change. Capitalist free competition was gradually replaced by capitalist monopoly. Monopoly grows from the free competition of capitalism. The internal logic of the development from free competition to monopoly is: free competition will inevitably lead to production concentration, which will inevitably lead to monopoly when it develops to a certain stage.

In Chapter 7 of Volume 1 of Capital, Marx deeply analyzed the causes and trends of production and capital concentration. Under the influence of the law of surplus value and competition, the phenomenon of capital concentration appears. Capital concentration is a combination of several capitals to form a larger capital, or to develop into a larger capital through the annexation of several small and medium-sized capital by a large capital. In this way, the scale of production has been dramatically expanded, and enterprises that cannot be established by individual capital have emerged. “It creates monopoly in a certain sector, thus causing state interference.” When capitalism was still in the stage of free competition, Marx scientifically predicted that the concentration of production and capital would inevitably lead to monopoly.

In Anti-Dühring, Engels further clarified the inevitability of monopoly from the analysis of the basic contradictions of capitalist society. With the development of capitalism, the use of means of production, production process and production of products have been socialized. However, the possession of means of production is private. Therefore, the contradiction between socialized mass production and capitalist possession has become increasingly acute. The contradiction between the drastic growth of productive forces and the restriction by the private capitalist ownership upon productive forces is becoming more and more serious, which forces the capitalist class to launch some reforms so as to develop the social productive forces within the possible framework of capitalist relations of production. Therefore, the largest producers within the industrial sector sought to make alliances to form trusts, that is, they began to form alliances for the purpose of regulating production. Consequently, monopoly organizations came into being. The emergence of such monopoly trusts only display the greatly increasing social character in modern production, but it does not solve the antagonism between the productive forces and production relations in capitalism.

Engels elaborated the inevitability of monopoly from the basic contradiction of capitalism, which is of great significance. According to the basic principles of Marxism, Lenin deeply analyzed the new situation of capitalist development at the end of 19th century and the beginning of 20th century, and further demonstrated the inevitability of monopoly caused by production concentration.

Lenin pointed out that one of the most typical characteristics of capitalism is the great development of industry, and the process of concentrating production in more and more large enterprises is going on very quickly.

In his book Imperialism, the Highest Stage of Capitalism, Lenin took Germany and the United States as examples, and used a large number of statistical materials to specifically explain this feature. When the concentration of production develops to a certain stage, it will naturally lead to monopoly. Because when production is carried out by thousands of small and medium-sized enterprises, it is difficult for large enterprises to regulate the production and sales in this industrial sector. However, when the production is highly concentrated, it is easy for a few large enterprises to reach an alliance agreement, so as to realize the control of production and sales. At the same time, in order to avoid losing both sides in the competition, a few large enterprises also need to seek temporary compromise and reach a monopoly agreement to jointly regulate the production, regulate the sales market and raw material sources.

Therefore, Lenin said, “free competition produces concentration of production, and when it develops to a certain stage, it leads to monopoly.” Monopoly is the “general and fundamental law of the present stage of development of capitalism”. At the end of the 19th century and the beginning of the 20th century, monopoly has become the basis of all capitalist economic life. Monopoly needed to be realized through monopoly organization. The main forms of monopoly organization are cartels, syndicates, trusts and concerns. Various monopoly organizations contain different contents and reflect various degrees in the monopolization.

Although there are various forms of monopoly organizations in capitalist countries, they are essentially the same, that is, they ensure monopoly capitalists to obtain excess monopoly profits by monopolizing and regulating production and markets. Monopoly profit is the high profit that monopoly capitalists obtain by virtue of their monopoly position in production and market. This kind of high profit is realized through monopoly price. Monopoly price is a kind of market price which is stipulated artificially by monopoly organization by virtue of its monopoly status, which aims to ensure high monopoly profits. It consists of production cost and monopoly profit, which is generally higher than the production price formed under the condition of free competition.

Monopoly comes from free competition. Monopoly does not eliminate competition, but exists above it superior, which further intensifies competition. After the emergence of monopoly, there are fierce competition among monopoly organizations, monopoly organizations and non-monopoly organizations. The combination of monopoly and competition has become a distinctive feature of imperialism.

After the World War II, monopoly has made great progress in the major capitalist countries. The mixed joint enterprise has become the main form of domestic monopoly, and the multinational company has become the main form of international monopoly.