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I'm designing a story where I'm taking current situations and trends such as market and cultural globalization, massive state debt and constant corporate mergers to a semi-dystopian extreme in order to build a fictional world where:

  • Newly created private companies almost automatically become part of one of four conglomerates. These four complement one another in different ways, and there is a fragile equilibrium where this status quo benefits all of them financially. Each of these multinational corporations have various enterprises related to basically every target audience (young, old, rebellious, conservative, etc.) in basically all areas (consumer goods, industry, media, etc.). If the newly created company has been created with the intention of being independent and tries to avoid being merged into one of the bigger fishes, for instance, all competition can band together (or maybe just one of them will need to act) to lower prices even into a loss, which they can allow temporarily as they're part of something bigger, so that the new actor's market share and its profits are negligible or at a loss, and the debt will require them to accept being bought off (this also will bring all of the infrastructure into the hands of the buying conglomerate).

  • Government is libertarian, so there are not anti-trust regulations to avoid these dirty tricks. In fact, many of the government members have work experience and close contacts in the higher ups in one or various conglomerates (and they will presumably go back to one of them after their "public service" office terms are over), so the "state" has become a market tool progressively, without need of anything as overt, suspicious or obvious as a coup. Political options such as the traditional left or the far-right have dissipated, given that there's not enough media traction for them and, when they do appear on the news and talk shows, it is to be demonized and ridiculed.

  • Society elects these representatives because rampant consumerism has ended up ended up replacing ideology and nationalism as a point of pride; as in, people don't feel pride for a country, they feel closer to cultural products and notable people of the four corporations. The lynchpin of conservative traditional family values has, say, become a certain TV show focused on Aesop's and pat morality, while a center of post-modern cynicism is a satirical TV show... maybe aired in two different channels but part of the same conglomerate. Whatever citizen outrage exists is fed back into the capitalist machine. Of course, there exist some small grassroots movements, but they don't get much traction outside of performances, and even some of its members (the ones whose antics get the most attention) end up being bought off by the media in order to participate on it (see the ending of Black Mirror's 15 Million Merits for reference).

So, apart from asking you to find holes in my worldbuilding (please do), here is my main question:

Is there any relatively plausible way to "end up" like this? I want to explore the progression from the present to that situation somehow in the story... Which are some possible, crucial events that could have shape the society I explained?

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    $\begingroup$ Hi and welcome to world building. I can tell you've put a lot of thought into this question. In order to ensure answers don't go on too long we like posts to stick to one question per "question". Perhaps consider what level of detail you want an answer to go into. It isn't unusual for people to create a series of questions relating to one topic. If you want a lot of detail you could have two separate "question"s one which asks about the events that shape your society and another that asks about the relationship with banks. $\endgroup$ – Lio Elbammalf Feb 26 '17 at 14:47
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    $\begingroup$ I took a more liberal approach than @LioElbammalf did -- I made the edit myself because I really liked your question and didn't want to see it closed out. I'll post your second question as a comment... feel free to create a new question, link to this one, where you asked the second main question. $\endgroup$ – SRM - Reinstate Monica Feb 26 '17 at 14:51
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    $\begingroup$ The original "second question": In my mind, banks are the centerpiece of each of these corporate conglomerates, but as far as I know, in current capitalism they aren't intertwined, at least in a direct way. What could make banking groups interesed in directly fusing with other business and industries areas instead of maintaining its current relationship? $\endgroup$ – SRM - Reinstate Monica Feb 26 '17 at 14:52
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    $\begingroup$ Newly created private companies almost automatically become part of one of four conglomerates. Why go to the trouble of making a new company then? If you're thinking the entrepreneurs can simply sell out, why would the oligarchy buy them out when they can simply squeeze the new enterprise out of the market and take over the business $\endgroup$ – nzaman Feb 26 '17 at 16:13
  • $\begingroup$ @nzaman The media and education system actually would promote entrepeneurship, so there'd be a higher inclination to do that than in our present world. Of course, people know that they will end up being bought out, but even for great minds the system can make it attractive: "If you give us the product and pretty much all its profits and intellectual property you get a nice flat fee and maybe even your name listed somewhere as creator/designer". Anyway the oligopoly don't want to be seen as bad guys: nice climate for "innovation" -> they reap pretty much all other people sow minimizing expense. $\endgroup$ – DrEddieFleming Feb 27 '17 at 21:45
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How does this differ from the current world? The critical differences seem to be

  1. No antitrust enforcement.
  2. Weak geographical loyalties like nationalism and belief-based loyalties like religion.

The latter is already becoming true. People are moving between countries at higher and higher rates. Religious affiliations of none or unaffiliated are increasing. So you can just extend current trends.

The former is different per country. Some of the larger economies, like China and Japan have weak antitrust already. The US varies between periods of strong and weak enforcement. Also note that companies can evade restrictions through organic growth. Google, Amazon, and Facebook are quite dominant in their areas. Network effects are already reinforcing the advantages of large companies.

All you really need is to come up with a reason why China wins. For example, China could be become the new US. Using a mix of corporate, development, and military aid to bind other countries closer to it. Chinese corporations expand from China to Africa, South America, and Southern Asia. I don't know that that is what will happen, but it is at least a plausible story line. It's what some people in China are trying to make happen. Maybe they're right that they can.

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  • $\begingroup$ I disagree with point 1. Without anti-trust, I don't see how the same pressures that would allow an oligopoly wouldn't go the further step into monopoly. While it is possible, I think that the oligopoly is an unstable equilibrium that would break down to a monopoly unless something propped it up. $\endgroup$ – ShadoCat Feb 28 '17 at 21:05
  • $\begingroup$ Remember that it's multiple monopolies. And the smaller three would have reason to squash the biggest one if it tried to outgrow them. $\endgroup$ – Brythan Mar 1 '17 at 2:15
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Short answer: Lobbying

Long answer:

It would take a long string of lobbying to find/build loopholes into anti-trust laws. The only reason for an oligopoly to develop is if they are prevented from forming a monopoly. So, I envision a long string of small events where they use the oligopoly to "prove" that they aren't a monopoly. Once the system is set up and the 4 power bases are stabilized, they can begin the process of getting the public to forget about monopolies (or keep it, dealer's choice).

The would always need to have something to point to that is worse than the current system so they can harp about "how good we are compared to...".

Note I would study Japan for the way conglomerates can work. Honda and Toyota make a whole lot more than cars. We just don't see it in the US. They also have non-confrontational unions.

So, a system that you are describing can work. It will just take a long road to get it to work in the US. I would say 2-3 generations of concerted effort.

Here are the ways that a small business would be "absorbed" by one of the four:

  • Small business cannot get product manufactured or marketed for a decent price so the license it to one of the four for an upfront and a percentage. That is done today.
  • Small business needs a loan from one of the four, gets deal if uses
    that conglomerate's parts to build their widget and a deal to use
    that conglomerate's marketing form to advertise and that
    conglomerate's retail outlets to sell it. Now, how independent is
    that small business? If the deals are good, the conglomerate gets a bunch of products that they do not have to innovate and do not need
    to manage but leave only enough profit from the entrepreneur to make it worth the effort. If the deal isn't as good, then it just pushes the licensing. That happens a lot today just not through a single conglomerate.
  • The public is sold on the idea that they can only trust the safety or quality of a product if it is made by one of the four.
  • The four make sure the business fails and then just make the product themselves. This is the least efficient, I think.

I really don't see the four buying small businesses much unless there is good management in the business.

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