The World’s Richest Man

The world’s richest man, according to The Wall Street Journal, is a Mexican son of Lebanese immigrants. His name is Carlos Slim. He is master of the monopoly. No matter what the field in which he operates, he soon makes it his private domain.

He is the modern refinement of an ancient economic tendency described by Adam Smith in his classic “The Wealth of Nations,” written a couple of centuries ago. In it Smith notes that when men of the same trade get together even for fun and merriment, the gathering will end up in a conspiracy against the public welfare and in some contrivance to raise prices.

The first giant step forward in this process was the organization of corporations. Instead of competing against each other, they pooled their capital in a single company called a corporation — marked as Inc., or Ltd.

But it did not end there. The individual corporations organized into trusts. There were the beef trust, the sugar trust, the cotton trust, et al. What they all had in common was to defy the law of supply and demand and set price by decree.

Busting the trusts became a major political purpose of progressive legislators. Perhaps, the most famous piece of trust busting was the break-up of American Telephone and Telegraph. But then came the Baby Bells that seem to have the same monopolistic tendencies as the original.

Although the U.S. is not Mexico, there is a constant trend in the U.S. toward a concentration of ownership, embodied in monopolies, oligopolies and cartels in which corporations divide up the market to ensure that they will not compete with one another.

One final point: Where you have concentration of ownership, it is difficult for newcomers to enter the field. The giant combines can — and do — wipe out a newcomer by cutting prices below the cost of production. Once they get rid of the newcomer, they revert to their original prices.

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