Monopolies

In capitalist economic life, a large enterprise or enterprise alliance that controls the production and sale of most products of a certain or some production departments in order to obtain high monopoly profits. They dominate the production, divide up and monopolize the sales market, control the raw material producing areas and investment places, and set monopoly prices to obtain monopoly profits.

Monopoly should be realized through certain monopoly organizations. The form of monopoly organization varies with the degree and content of monopoly. The simplest form is the short-term price agreement, which is an agreement reached orally or in writing by several large capitalist enterprises to jointly control the price of a certain commodity in a certain period of time. Most of these monopolistic organizations are unstable and short-term. When the purpose of the agreement is achieved or the market conditions change, it will disintegrate itself. The more developed forms of monopoly organizations are Cartels, Syndicates, Trusts and Concerns. Various monopoly organizations contain different contents and reflect different monopoly degrees.

Cartel is a kind of monopoly alliance formed by large enterprises which produce similar products to sign agreements on the output, sales market and price of commodities in order to obtain high monopoly profits. The enterprises participating in the cartel still maintain their independence in production, sales and law. They only produce and sell according to the prescribed price, output and market scope.

Syndicate is a monopoly alliance established by large enterprises in the same department to purchase raw materials and sell goods. The members participating in the syndicate still maintain their independence in production, but they have lost their independence in business. The purchase of raw materials and the sale of products are handled by the general office of the syndicate, and then distributed among the members according to the share stipulated in the agreement.

Trust is the monopoly of several large enterprises which produce similar products or have close relationship in production. Trust itself is an independent business organization. The enterprises participating in the trust have completely lost their independence in production and sales and become shareholders who receive dividends and dividends according to their shares. All business activities of enterprises are managed by trust.

Concern is a consortium of monopoly enterprises in different economic sectors under the control of the same consortium. Although the enterprises participating in a concern retain formal independence, they are actually controlled by the dominant core enterprises, including large banks and large industrial enterprises. By buying stocks, participating in the board of directors and other financial connections, core enterprises put each member enterprise under its own control.

After carefully analyzing and studying the works on the formation history of monopoly organizations at that time, Lenin summarized the history of the formation of monopoly organizations as follows:(1) The 1860s and 1870s were the climax of the development of free competition, that is, the highest stage. At this time, monopoly organization is only a kind of indistinct bud. (2) After the crisis of 1873, the cartel had a long period of development, but the cartel was still an exception at that time, which was still unstable and a temporary phenomenon.

(3) The economic upsurge in the late 19th century and the economic crisis of 1900-1903.

At this point of time, cartels became one of the foundations of all economic life. Free capitalism transformed into imperialism.

With the development and change of monopoly capitalism, in modern times, there are mixed joint enterprises which are different from the traditional concern, that is, a multi sectoral monopoly organization formed by annexing a large number of companies that have no business relationship with each other. Although there are various forms of monopoly organizations in monopoly capitalist countries, they are essentially the same. They ensure monopoly capitalists to obtain high monopoly profits by monopolizing production and market.