Bayer buy-out exemplifies danger of oligopolies

Conglomerates and corporate mergers are a staple of current global capitalism across a myriad of industries. Major corporations buy out their weaker competitors and increase their control of an industry by two or threefold. While the main motivator of capitalism is the accumulation of wealth, capitalism also thrives because of increased competition between producers. As conglomerates grow and competition between industries weakens, there becomes a state of oligopoly in certain sectors of the global economy. German pharmaceutical giant Bayer recently proposed a plan to buy American agricultural supplier—and one of America’s most hated corporations—Monsanto for $66 billion. Monsanto is the world’s leading supplier of genetically-modified seeds. It controls the majority of distributed corn and soybean seeds in the United States and manufactures controversial crop pesticides.

On the other hand, Bayer has made millions in the healthcare industry with its commercialization of name-brand medicines. A goal of the merger is for Bayer to introduce itself into the profitable bio-agriculture market, leaving the corporation with its toe dipped in many different industries.

It isn’t uncommon for conglomerates to span a variety of industries—just look at the Big Six corporations who control 90 percent of American media outlets and are deeply intertwined with other sectors. But just because we know oligopolies can legally exist does not mean we should always support them.

If regulators approve the Bayer-Monsanto buy-out, farmers around the world may endure financial pressure and stress. There are already preexisting issues about the prices of Monsanto’s exclusive genetically modified seeds, and after the merger the new company will control about one quarter of global agricultural supplies. With the pressure to expand agricultural technology may come an increase in personal costs for farmworkers who are legally obligated to follow Monsanto’s business practices—or risk failing in the Monsanto-dominated agricultural market.

Major banks including Goldman Sachs and J.P. Morgan plan to provide billions of dollars to help finance the merger, thus rounding out the circle of America’s economic elite who will participate in and eventually benefit from this deal. It is no secret that oligopolies in capitalism benefit the few at the top often at the expense of consumers and lower employees.

While National Public Radio notes that there is a 50/50 chance the proposed plan will be approved, its conception is nonetheless reflective of the current state of global capitalism. Antitrust regulators are the crucial players that ultimately prevent powerful corporations from monopolizing the global economy.