Question

1. How corporations control "the marketplace of ideas"? What are the consequences? What, if anything, should be done about it?
2. Mainstream economists view competition among many small firms as a prerequisite for "efficient" market outcomes. Some touted globalization as a way to increase competition and benefit consumers. What problems result from the large size and market dominance of a few global firms? Should this change our view of globalization in any way?

Answer 1

- The corporations control the market place of ideas through digital media. Advertisement through internet , television , etc. have a deep rooted impact on consumer's taste and preferences , as it can be altered with constant visuals , studies have shown. Once the demand for preferred good is generated , there is a kind of bandwagon effect , which rises the demand for goods and ultimately different chains of producers also have to produce the same.

It must be observed that sometimes the demand generated for goods is a medium of profit generation only and quality or impacts of producing the goods is ignored ( Eg. Environmental impacts ). Hence a control over what kind of production is made , the domain of corporation is sustainable way of production etc must be insured.

- Firstly , the basis or ideals of globalisation on papers was understood to provide a market which is perfectly competitive in nature. With large buyer base and large seller base , ideally the prices should have remained minimum as higher priced goods gets eliminated as lower price alternatives are present in market.

The error was in assumption of size of the firms. The size was assumed to be small. An industry with firms of small size in market , there is no undue advantage of economies of scale in the economy. The production levels are same and due to common resources , the results are also more or less the same. Hence an efficient state is achieved where goods are being delivered with maximum producer and consumer surplus.

But in reality , globalisation proved to be a supplier for the capitalist class. Large giants pushed small firms out of business through tactics like market capture , buying of smaller firms , predatory pricing etc. This made many large firms the sole player in market. The production rates were also small because of economies of scale and use of cheap labour from across the world as a result of globalisation.

Hence it must be understood that globalisation failed to provide a perfectly competitive market but instead promoted monopoly and capitalism. Hence the need of the hour is to provide enough incentives for the small firms in order to survive in the market , while keeping the interests of consumers.