When Monopsony Power Wanes

Abstract

In this Part 1, Material Conditions, I look at the changing material conditions of capital in the most labour-intensive manufacturing sectors in world production. I argue that these changes are leading to a waning in monopsony power. The paper introduces a universal logic that governs competition and reshapes the chain around the question of monopsony in the global supply chain. Put simply, deregulation produces high degrees of monopsony power, increasing the value share for the lead firm. This intensifies competition, exerts downward pressure, and winnows the number of suppliers able to compete. The result is a supplier consolidation. Consolidation increases the surviving suppliers’ share of value, which expands access to finance, facilitates self-investment, and raises entry barriers. In Part 2, Subjective Agency, I look at how this leads to the emergence of market spatial inflexibility, which has given labour new openings by increasingly their disruptive power.