The Supreme Court has just ruled, in a 5-4 decision (Leegin v. PSKS), to allow tacit price-fixing schemes not seen in the US since the days of legal trusts, oligopolies, and cartels. Officially this means that companies in a field can set a “price floor” for their product, i.e. a secret price below which they promise not to go.
This should be obvious reason for concern in an economy so dominated by a few dozen large firms. We are about to see a new era of rising prices via agreement between corporations – although it is probable that these agreements have been commonplace in the last hundred years they have been technically illegal if challenged in court.
Anti-trust laws and bans on price floors were an attempt to bust the monopolies and oligopolies of the “robber baron” age of American capitalism. Firms in an already advantageous position in the market can now out-price upstart competitors without having to fear additional competition from established rivals, and can do so legally. Indeed, the case heard by the courts was about a production firm cutting off supplies to retailers who did not abide by a price-floor agreement, i.e. they had lowered prices in order to stay competitive in their home markets.
What will become compelling in the future is that this price-fixing, coupled with decades of stagnating wages in the American workforce, will put an incredible squeeze on the American working class. It must be granted that the Supreme Court is and has always been the defender of American capitalism, but this is a stark example of the continued power of the American business elite and the sheer non-existence of a working class resistance. Eras in which there was a vibrant labor movement saw, if not hesitation on the part of the courts, mass mobilization against their decisions.
What makes a socialist such as myself laugh bitterly is that the ruling class in the US is perfectly willing to admit to socialistic methods of planning and control if it helps business continue accumulating wealth and capital. Price floors in a participatory economy, if necessary, would and should be debated by the public at large, and should be coupled with an increase in wages/income by the majority of the workforce. Indeed, even if we are simply talking about a market-economy, increasing the wages of the majority of poorer Americans would probably benefit the economy on the whole more than these price-fixing agreements, but not the pocketbooks of the wealthiest.