I’ve got a couple longer pieces in the works right now, including a followup on the Norfolk Southern disaster in East Palestine, OH. This is sort of peripheral to that. I think I’ve mentioned in the past that railroads are “natural monopolies“, and monopolies are a serious problem for society, if they’re being operated for private gain. From that point of view, I suppose one could argue that a rail company merger is no big deal – they’re already monopolies of a sort, so does it really matter if they become more monopolistic? Well, I think so. At the very least, it’s a matter of principle. As I’ve already said in the past, I’m in favor of the government having a monopoly on rail in the United States, but that’s with the (optimistic) assumption that it would be run for the benefit of the general population.
Unfortunately, that’s not what we’re talking about today. In the midst of national scrutiny on the industry, the Biden administration has apparently decided that they’re just fine with at least some corporate mergers:
U.S. federal regulators on Wednesday approved the first major railroad merger in more than two decades, a move that follows the East Palestine rail disaster and that critics warned would reduce competition, raise prices, cost jobs, and threaten safety.
The Surface Transportation Board (STB) approved Canadian Pacific Railway Limited’s proposed $31 billion acquisition of Kansas City Southern Railway Company, a merger that will create a single railroad linking Canada, the United States, and Mexico. The agency said the merger will take roughly 64,000 truckloads off the road and add more than 800 union jobs.
“The decision includes an unprecedented seven-year oversight period and contains many conditions designed to mitigate environmental impacts, preserve competition, protect railroad workers, and promote efficient passenger rail,” STB said, adding that it “also anticipates the merger will result in improvements in safety and the reduction of carbon emissions.”
“The merger brings the total number of Class 1 railroads to six, down from over 100 just a few decades ago,” the progressive news site More Perfect Union noted on Twitter. “Corporate consolidation in the railroad industry compromises safety and risks lives by prioritizing profits and cutting corners to reduce costs.”
That shouldn’t even have to be said. Corporate consolidation always goes badly for working people. It’s only ever done to benefit those at the very top, whose class interests directly conflict with the interests of humanity as a whole. Even if one were to argue that this doesn’t change the motivations at play, a larger corporation has more power. It has more power over labor because it controls more of the job market, and it has more power over the government by virtue of the share of the economy represented by the newly merged corporation.
That latter factor may be the bigger concern, for me. As I’ve mentioned, when it comes to opposing labor power, the government is already on the side of the capitalists, but when it comes to lobbying, and making bids for special treatment, the only real limit seems to be the scale of resources available to the corporation in question.
This feels like yet another example of how the people running our society are either utterly clueless about the state of the world, or actively trying to make things worse.