The Guardian • Issue #2087


We’re being gouged

  • The Guardian
  • Issue #2087

Are you feeling gouged, like prices are higher than they need to be? You should be – it’s been going on for a while. Thanks to the recent inquiry into price gouging conducted by Alan Fels for the ACTU, we have good reason to think we’ve all been gouged.

The inquiry was no spur-of-the-moment thing. Fels conducted public hearings in five cities, received more than 750 public submissions, and 20 contributions from academics, experts, and other organisations. The inquiry started last August and the report was handed in on 6 February. It’s a serious look at price gouging in this country. Not to put too fine a point on it, we – working class Australians – are being done.

According to the ACTU, Fels found that some businesses have too much power over “their customers, their supply chain, and their workers”. For customers, the big supermarket chains Coles and Woolworths form a duopoly, controlling 75 per cent of the market between them.

The power affects customers, with businesses using all sorts of dodges to get more out of us (see ‘How do I gouge thee?’ of this issue). The duopoly has been found making it harder for shopping centres to lease to competitors.

Together, Coles and Woolworths form a near ‘monopsony,’ meaning that if you want to sell food, they’re almost the only game in town. The big two bargain hard, which is allowed, but they have long been known for gouging suppliers, holding the threat of de-registration over them, and extracting fees for favourable positioning in the store.

None of this is a surprise to communists. Marx, Engels, and Lenin describe clearly how capitalism moves towards monopoly. The business lobby in Australia love to talk about their love of competition, but what they’re in business for is profit, and monopoly is the end result of the competition they claim to enjoy.

So you’re going to hear a lot about gouging and inquiries. The solution? Usually what’s suggested is some regulations to get more competition going – because all the major political parties assume that competition is how we get to a neoliberal utopia, with happy competing companies, and happy consumers, workers, and suppliers. This widespread idea is wrong.

It’s true that individual regulations can stop some bad practices from occurring. What they can’t stop is the capitalist tendency to monopoly, and exploitation of workers, customers, farmers, and small businesses.

It doesn’t have to be that way. Under socialist planning, supply chains can be organised for the benefit of people, not for that of capital.  Socialist planning can also anticipate large-scale events. In China, socialist planning meant that the country got through the Global Financial Crisis almost unscathed, and through the pandemic with several hundred less deaths per thousand than the United States did. Forward-thinking, people-centred socialist planning has also had successes in Vietnam and Laos.

The Communist Party of Australia welcomes the release of the Inquiry into Price Gouging, and this paper will celebrate if particular abuses are curbed, but socialist economic planning is necessary for long-term stability, and the only way we can create a national economy for the future that can bring security to farmers and customers and bring down the cost of living.

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