Monopolism in conditions of predominance of medium and small enterprises

There are fairly large industries, such as the light industry, food processing, woodworking, etc., in which medium and small enterprises predominate, products are generally homogeneous, and there is no strict technological dependence of consumers on suppliers. It would seem that the very structure and scale of production, its potential flexibility, maneuverability, and the ability to quickly respond to changes in demand should create conditions for the development of competition. In practice, this does not happen, monopolistic relations also develop in such industries, but for other reasons, under the influence of other factors.

On the one hand, the geographical boundaries of the market are narrower than in the case of technically complex products. In addition to the scale of the country itself, it is affected by the general underdevelopment of the infrastructure — warehouse, sales, transport, and information. As a result, enterprises of externally deconcentrated industries (for example, the cement industry), upon closer examination at the regional and local levels, may turn into monopolists.

On the other hand, it is precisely in industries with a low level of production concentration, with a significant proportion of medium-sized and small enterprises, that another specifically socialist market restriction, which could be called administrative, is fully manifested. In a socialist economy, the activities of any enterprise are regulated by the state in one way or another. However, the management system is so cumbersome that it is almost impossible to control all the actions of its lower levels. Moreover, enterprises are trying in every possible way to circumvent the restrictions imposed on them from above.

There is a sphere of a certain legal or semi-legal independence of enterprises. The degree of this independence is usually directly proportional to the scale of production. The extent to which an enterprise can realize this independence in its own interests depends on the amount of resources allocated. The latter, again, is determined by the size of the enterprise. At the same time, the light, food, woodworking, and building materials industries find themselves in a losing position.

The predominance of medium-sized and small enterprises, the flexibility and maneuverability of production, that is, what is an advantage from the consumer's point of view, in the conditions of the Administrative System for these industries themselves turns out to be a disadvantage. It has the most worn-out equipment, a chronic shortage of resources, and low wages. Enterprises in these industries, working largely for the consumer market, do not have direct contacts with customers. The sale of products takes place through the system of the Ministry of Trade, which "attaches" manufacturers to certain wholesale bases. The previous links of the technological chain are also monopolized. Squeezed by monopolies on both sides, and practically devoid of independence, the enterprises of these industries, in a certain sense, turn out to be monopolists involuntarily. 프로모션 코드 1xbet