Columnist Alan Guebert taught me a new word late last year: oligopsony, or a market sector with few buyers. That’s not to be confused with an oligopoly, or a market sector with few sellers.
(If you really want to tax those brain cells, there’s an even newer word: oligonomy, or market sectors in which the same companies are both oligopolies and oligopsonies.)
I relearned my new vocabulary while reading a new report from the ETC Group, Oligopoly, Inc., Concentration in Corporate Power: 2003.
The take-home message? More than half of the world’s 100 largest economic entities are not nations, but corporations.
Wal-Mart’s revenues exceed the gross domestic product (GDP) of Sweden or Saudi Arabia. Home Depot is a bigger economic entity than New Zealand.
And, the report says, “of the oil-rich countries in the Middle East, only Saudi Arabia and Iran made it into the top 100, but six oil companies appear on the list.”
On the ag list. Where does agriculture fit in? Nicely, to some multinational corporations.
* The report cites Monsanto information that says four companies control more than 75 percent of the world’s commercial maize (corn) seed market, excluding China.
* The top 10 animal pharmaceutical companies control 62 percent of the total worldwide market.
Interestingly, the report says the hot growth area is not health care for livestock, but for pets.
Most of the leading animal vet companies are adapting products developed for humans for pets (a Novartis antidepressant developed for obsessive-compulsive disorder treatment is now marketed to treat “canine separation anxiety).
* The top six agrochemical firms account for 70 percent of the global pesticide market.
* When we think biotechnology, we think Bt corn. But the top biotech sellers are actually genetically modified human drug products (Johnson & Johnson’s Procrit; Amgen’s Epogen and Neupogen), according to ETC (the action group on Erosion, Technology and Concentration).
Pay attention. I raise these points more for awareness than commentary. I support business and am certainly not advocating socialism or communism.
But there is a lack of accountability in the maze of multinational business transactions. The age-old theory is “follow the money” and these entities are making money. Lots of money.
Pay attention and be informed.
Bad or good. “Are oligopolies sinister? Very possibly,” writes Steve Hannaford who tracks growing companies at Oligopolywatch.com.
But, he adds, “I think it’s more useful to see how and why they work than rail against globalism and greed.
“While there are hatefully crooked businessmen (take any set of former Enron or Tyco executives for a start), most oligopolies are based on struggles for survival, not a result of innate evil.
“Like those proverbial sharks moving forward, businesses either grow or fail, and since most mature markets have limited growth potential, companies often grow by buying other companies.
“If nothing else, it’s fascinating to see how they do it.”
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