Ortegon 1

Carolina Ortegon

Oscar E. Martinez II

ENGL 1302-217

13 April 2024

American Economy: A flawless system?

The same system that makes the American economy flourish by providing amazing

opportunities and resources to the citizens, such as higher education, job opportunities, theme

parks, and even what is displayed on TV, is the same system that allows it to fail at times by

allowing very few people to own entire industries such as the entertainment and pharmaceutical

industry without the proper regulation. This is possible because the American economy is mixed,

allowing private businesses and individuals the freedom of capital use with some government

intervention. It is understandable how this matter can be very complex, and sometimes, it can get

hard to control such a system. In the article "Can Common Business Practices Ever Be

Anticompetitive? Redefining Monopolization" Konstantinos Stylianou states, "Firms do not

think in terms of legitimate business justifications or efficiencies, but rather in terms of long-term

sustainability and appropriation of value. As a result, antitrust law becomes detached from the

subjects it purports to regulate" (169). Thus, the U.S. government should put more effort into

preventing the monopolization of companies because failure to preserve competition between

businesses results in a decrease in product quality, an increase in the ability of businesses to

influence politics and governance, and a lack of corporate social responsibility (CSR) on behalf

of companies.
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Product Quality in Competition

The U.S. government should focus on product quality when facing a business decision,

such as allowing companies to buy their competition because product quality often decreases by

market monopolization, leaving consumers with very few options. This is important because it

can impact not only the consumers by having to buy products without any new improvements

and low-quality services at the same or even higher price, but it impacts the nation's economy as

well by abusing its power, causing higher inflation rates. It also affects the economy because it

limits efficiency, innovation, and healthy competition, contributing to market failure. Companies

must provide goods and services efficiently and with a healthy level of competition. As stated in

"Monopolization Versus Sustainable Growth – The Case of Postal Services Market in Poland" by

Tomasz Bernat and Piotr Bartkowiak, "company sustainability development is defined as

achieving sustainable profits through business practices which are well planned and responsive

to social and environmental needs" (718). This statement means that companies should focus

more on the consumers' needs and operate more sustainably for the outcome to be good and not

only focus on making profits to avoid the decrease in product quality.

However, some may argue that competition can have bad consequences, as stated in

“Customer-Driven Misconduct: How Competition Corrupts Business Practices” by Victor

Manuel Bennett, et al., “competition among firms yields many benefits but can also encourage

firms to engage in corrupt or unethical activities. We argue that competition can lead

organizations to provide services that customers demand but that violate government regulations,

especially when price competition is restricted” (1725). This statement has some truth to it

because usually companies tend to choose that instead of complying with the law, but that is not

because of the competition, it’s the company's choice whether or not to do what is right.
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In addition, laws like the Sherman Antitrust Act outlaw unilateral actions and

anticompetitive agreements that monopolize or seek to monopolize the relevant market. Even

though this law is in place, some companies make business choices that ultimately affect the

market, the nation’s economy, and the consumers. This is explained in “Prevention of

Monopolistic Practices and Unfair Business Competition Through Business Competition

Supervision” by Alum Simbolon,

every business actor either alone or together with other business actors intentionally and

clearly planning to control the production and or marketing of a good should not be

because it will interfere or ultimately hinder other business actors entering the relevant

market. Behavior of business actors like this in the end will cause business conditions to

be not conducive (3).

This statement means that it is essential for companies to be regulated to prevent illegitimate

business decisions that will eventually affect not only the market but also the upcoming

businesses and entrepreneurs by controlling a big part of the market, leaving them with no room

to operate because of the unhealthy competition which additionally leaves consumers with no

options. This is an urgent matter because it affects the whole United States; that is why the U.S.

government should put more effort into preventing the monopolization of companies. There

needs to be more regulation to guarantee the anti-monopolization laws and their effectiveness for

the overall good.

The Influence of Business Monopolization

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The U.S. government should preserve competition between businesses to limit the ability

of businesses to influence politics and government to further avoid monopolization. When a

company succeeds and earns an excessive amount of profit, its capital can be very influential in

terms of public goods or even politics because of illegitimate activities. Thus, the government

needs to prevent the monopolization of businesses to avoid massive influential decisions in the

nation’s economy and performance. This influence is possible because today’s society is very

modern, and the use of technology allows news to travel as fast as it is released, which is the

same case when a company launches a new product or provides an electronic service. As stated

in “Google, Facebook, Amazon, eBay: Is the Internet driving competition or market

monopolization?” by Justus Haucap and Ulrich Heimeshof, “Back in the early 1990s search

engines were hardly used on a large scale, while today search engines such as Google or Bing are

multi-billion-dollar businesses” (54). This statement emphasizes that today companies in the

technology sector are a huge success because of the demand they experience. People are easily

influenced by different types of aspects, from what they hear or see to what they experience. The

companies that created the algorithms that allow people to receive different types of media are

also very capable of controlling and regulating its effects. The other aspect of it is the fact that

there are multi-billion-dollar businesses. Any company at that level can contribute to society in

any shape or form from legitimate to illegitimate ways. This amount of influence and power

should be more carefully regulated for the good of all citizens and the nation.

However, in “Monopoly As A ‘Culture-History Fact’: Knight, Menger, And The Role Of

Institutions” as stated by Joseph T. Salerno, et al., “a monopolist is not completely unrestricted in

influencing the course of economic events: he cannot choose to sell a particular quantity of the

good and then ‘fix the price at will’; nor can he fix the price and then determine the quantity of
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the good that will be sold on the market” (1053). This statement means that because of the

market forces, the product demand, and the resources used to operate, businesses can’t

completely influence their outcomes or even profits. Thus, businesses can influence some areas

but not all of them, especially when it comes to how consumers will react. Either way, regulating

the power a business has on the nation’s economy should be the government's focus to avoid

abuse of power and monopolization.

Corporate Social Responsibility

The U.S. government should take more responsibility to regulate corporate social

responsibility in companies given that companies usually focus on their competition meanwhile

disregarding consumer needs. As stated in “How Does Corporate Social Responsibility Affect

Consumer Response to Service Failure in Buyer–Seller Relationships?” by Lisa E. Bolton and

Anna S. Mattila, “CSR can be defined as a company’s commitment to minimizing or eliminating

any harmful effects and maximizing its long-run beneficial impact on society” (141). This

statement allows us to emphasize what CSR should look like in a company and what the goal

should be. Even though CSR is essential for the overall good, sometimes, companies disregard

this and only focus on, as stated before, the “long-term sustainability and appropriation of value”

affecting consumers (Stylianou 169). In addition,

company CSR motives may become salient to consumers via news and social media,

publicity and promotions, and other sources. Extrinsic or self-interested motives reflect

the company’s desire to increase sales/profits while intrinsic or society-serving motives

involve the ultimate goal of doing good (145).

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This means that CSR can be publicly announced so consumers are aware of the promises

that companies make regarding their social and environmental responsibility, and being public

about it puts pressure on companies to comply. Thus, it is essential for the government to also

pressure companies into meeting requirements to avoid the lack of CSR on behalf of companies.

Conclusion

The American economy flourishes when operating efficiently, that is because of

government regulations and when it starts to fail it is the moment for the U.S. government to put

more effort into preventing the monopolization of companies. The U.S. government should focus

on product quality when facing business decisions because product quality often decreases due to

market monopolization, leaving consumers with very few options and affecting the economy by

creating higher inflation rates. The U.S. government should also preserve competition between

businesses to limit the ability of businesses to influence the nation creating monopolization.

Finally, the U.S. government should take more responsibility in regulating corporate social

responsibility in companies given that companies usually focus on their competition meanwhile

disregarding consumer needs which in the end, affects the whole nation.
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Works Cited

Joseph T. Salerno, Carmen Elena Dorobat, and Matthew C. McCaffrey. “Monopoly as a ‘culture-

history fact’: Knight, Menger, and the role of institutions”. Journal of Institutional

Economics (2021), 17, 1049–1064 https://www.cambridge.org

Justus Haucap, Ulrich Heimeshoff. “Google, Facebook, Amazon, eBay: Is the Internet driving

competition or market monopolization?”. Int Econ Econ Policy (2014) 11:49–61 DOI

10.1007/s10368-013-0247-6. ProQuest. https://www.proquest.com/docview.

Konstantinos Stylianou. “Can Common Business Practices Ever Be Anticompetitive? Redefining

Monopolization”. American Business Law Journal Volume 57, Issue 1, 169–221, Spring

2020. https://onlinelibrary.wiley.com/doi/pdf/10.1111/ablj.12157.

Lisa E. Bolton and Anna S. Mattila. “How Does Corporate Social Responsibility Affect

Consumer Response to Service Failure in Buyer–Seller Relationships?”. Journal of

Retailing. Volume 91, Issue 1, March 2015, Pages 140-153. How Does Corporate Social

Responsibility Affect Consumer Response to Service Failure in Buyer–Seller

Relationships?.

Simbolon, Alum. "Prevention Of Monopolistic Practices and Unfair Business Competition

Through Business Competition Supervision." Journal of Legal, Ethical and Regulatory

Issues 22.1 (2019): 1-7. ProQuest. https://www.proquest.com/docview/2238482699.

Tomasz Bernat, Piotr Bartkowiak. “Monopolization Versus Sustainable Growth - The Case of

Postal Services Market in Poland”. Amfiteatru Economic. Vol. XV, Special No. 7,

November 2013. ProQuest. https://www.proquest.com/docview.

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Victor Manuel Bennett, Lamar Pierce, Jason A. Snyder, Michael W. Toffel. “Customer-Driven

Misconduct: How Competition Corrupts Business Practices”. Management Science Vol.

59, No. 8, August 2013, pp. 1725-1742. JSTOR. https://www.jstor.org/stable/23443830.