INEQUALITY
NEVA MAKGETLA: Monopoly power needs policy solutions
Neva Makgetla argues to tackle monopoly power in SA the government has to deal with the market structures and systems that underpin it
If you googled "white monopoly capital" in SA last Sunday, you would have ended up pretty confused. The headings on the first five hits variously asked what it is, said we need to go beyond it, suggested it’s a myth, proposed a deconstruction, and argued that it’s a dangerous discourse. Yet there’s not a lot of debate about the unusual concentration of ownership and economic power in SA. To take one indicator: in 2014, just 616 companies paid two-thirds of all company income tax in SA. That’s less than 1% of the 700,000 enterprises registered for tax. The top 616 companies reported more than R100m in taxable income apiece. Economists generally agree that monopoly power can encourage inefficiency and aggravate socioeconomic inequality. These tendencies do not follow from some moral failing on the part of the managers or owners, but rather from the nature of market power. Big companies will always be tempted to use their strength to raise their profits at the cost of competitors, cons...
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