“The duty of a true patriot is to protect his country from its Government.” – Thomas Paine
In economics, an ‘Oligopoly’ is defined as a type of market structure where a few firms have a dominating share of the market allowing them to dictate prices and supply.
Mobile phone market dominated by Apple, Samsung and Huawei or airline industry in the US dominated by Delta, United, Southwest and American Airlines are two examples of easily identifiable oligopolies in the global market.
Some of the key characteristics of oligopolies: there are only a few firms dominating the market, each firm knows that decisions other firms make will directly affect its bottom-line. Therefore, they would rather cooperate than compete and together use strategies to optimise the gain while positioning barriers making it difficult for new players to enter the market.
Though most countries have rules and regulations making collusion leading to price fixing and/or shortages/surpluses illegal, it is not difficult for the businesses to find ways around such rules, as people usually do with any other regulation.
OPEC
One way to avoid being accused of collusion is to create a ‘cartel’ and have a legally binding agreement among the major players of the oligopoly. The most famous of such arrangements is the Organization of Petroleum Exporting Countries (OPEC) consisting of thirteen oil-exporting countries though people may associate the word ‘cartel’ mainly with the underground industry of illegal drugs. Even with signed agreements, OPEC has experienced deviations by some of the members who made secret deals with other Governments disregarding what was agreed by them.
A careful analysis of the growth of political parties and the wealth of individual members of those parties elected to governing bodies of some countries might make it possible to identify the oligopolistic nature of the Governments they run and similar strategies they use to safeguard their interests.
Usually, two or three political parties can be seen dominating the governing structure. Though each party acts, in public, as the other parties are their enemies, and their ideologies are completely different they know that the parties have a strong interdependence. That is why people often see the members of these parties jumping from one party to another, mostly for their personal gains.
According to Winston Churchill some men change their party for the sake of their principles; others their principles for the sake of their party. In any case the fact that any of these members can easily fit in with any of the parties indicates that the philosophies of the parties are very similar.
It is similar to the firms in an oligopoly dealing with the same or similar products. Since they know that cooperation (collusion) is more profitable for everyone in the game than competing against each other, they only pretend to compete against each other to mislead the public. That is why people do not see any genuine attempt of implementing the law against the wrong doers of the previous government by any other party that comes into power.
Throughout the political campaigns people might hear about bringing the wrong doers to justice but soon after they get elected, they start playing an enlightened role saying we should not dwell on the past and look to the future. They very well know that it is the best insurance policy they can have to protect themselves if they become the losing party in the next election.
Strong barriers
It is an unwritten agreement among the political parties which can be identified as an unofficial cartel. The two or three dominating parties will quickly get together to protect the market share (the voters who have been fooled by them up to that point) if they see a new party trying to enter the game, satisfying another characteristic of an oligopoly: strong barriers to entry. It could be a completely new party or one that have been in existence without much market power (voters) until that time. However, if no party gets a majority enough to form a Government by themselves then all leading parties will start lobbying for a coalition Government and the bidding war starts.
Even the elected members of the parties that had to break through those strong barriers of entry will get a chance to sell their alliance to the highest bidder. Here again there is an understanding among all the stakeholders that it is of their best interest not to reveal the conditions of the transaction to the public.
An oligopoly would always keep the details of the negotiations and transactions taking place among themselves hidden from the consumers and the regulatory bodies too, if needed. Even if a coalition Government is formed under some cartel like agreement, as the OPEC has experienced in the past, there may be some members of the coalition who would change their mind later or would like to entertain better offers. Then the coalition falls apart leading to a collapse of the Government or new opportunities for other members who did not join the coalition at first to do so now with higher rewards.
An example of a sequence of unsuccessful coalitions was given to the world by Israel having four elections between the two years from 2019 to 2021. Benjamin Netanyahu who was the Prime Minister for ten years by 2019 ran for re-election while standing trial on corruption charges.
If no coalition was possible then either Netanyahu would have stayed in the office as a caretaker Prime Minister or go for another election. The Opposition knew that Netanyahu was trying his best to stay in the office, at least as the caretaker Prime Minister, because that was the best way, he could fight against the charges leveled against him.
Because by that time there was no other player in that oligopoly who Netanyahu could place his trust. If he had one, then he could have let that person form a coalition and become the Prime Minister with the guarantee that he will throw the cases against Netanyahu out and give him life time immunity.
Almost everyone in Israel knew that they were going through all these elections only because Netanyahu was trying his best to serve his personal interests. The stakes were so high that all major parties went to Israel-Arab community, who have been neglected and discriminated against all their lives, with the begging bowl.
Antitrust laws
If one firm gets into trouble in an oligopoly due to evidence of breaking any antitrust laws or then all the other players will try to do whatever they can to get him out of trouble because they know it could be them next time. One might think how can being in a Government be same as being a member in an oligopoly where the firms are involving in profit making business.
In oligopolistic Governments the parties (firms) are involved in profit making business selling false hopes and unattainable futures to the public to gain access to the coffers of public money. If one examines such oligopolistic Governments around the world, one could see who or what has been the most successful profit making cartel, party, family, or the individual in the history of the game of politics.
The writer has served in the higher education sector as an academic over twenty years in the USA and fifteen years in Sri Lanka and he can be contacted at [email protected]