Collusive Behavior in Economics: Robbing the Poor to Enrich Corporations!
Feb 3, 2025
Introduction
In the modern economic landscape, collusive behaviour among corporations has become one of the most insidious threats to free markets, consumer welfare, and economic equity. When corporations conspire explicitly or tacitly to manipulate prices, restrict competition, or engage in anti-consumer practices, they effectively steal from the masses while consolidating their wealth and power. This phenomenon not only widens the wealth gap but also cripples innovation, exploits consumer psychology, and erodes trust in the economic system.
From price-fixing to market allocation and bid-rigging, collusion manifests in various forms, often disguised under the veil of corporate strategy. By understanding the mechanisms of collusion, its psychological impact on consumers, and the policies that can combat it, we can expose its destructive force and push for a more equitable economic system.
The Mechanisms of Collusive Behavior
Economic collusion occurs when firms coordinate to reduce competition, usually leading to higher prices, inferior products, and reduced consumer choices. The three primary forms of collusion include:
- Price-Fixing – Competitors agree to set prices artificially high, eliminating price competition.
- Market Allocation – Firms divide markets, ensuring monopolistic control over certain regions or demographics.
- Bid-Rigging – Companies conspire to manipulate the outcome of bidding processes, often in public contracts.
Such practices allow corporations to operate as de facto monopolies while maintaining the illusion of competition. The result is a marketplace where consumers unknowingly pay more for products and services, all while corporations extract maximum profit with minimal accountability.
How Mass Psychology is Used to Perpetuate Collusion
Corporations rely heavily on mass psychology and cognitive biases to maintain and expand their collusive strategies. By exploiting the public’s cognitive blind spots, they ensure that consumers remain unaware or indifferent to their exploitative tactics. Some of the most effective psychological mechanisms include:
- Normalcy Bias – People tend to believe that things will always function as they have in the past. Corporations use this to their advantage by slowly raising prices or reducing product quality, knowing that the gradual changes will go unnoticed by the majority.
- Brand Loyalty & Trust – Many consumers trust brands blindly, associating them with quality and reliability. Even when firms engage in price-fixing or unfair practices, brand loyalty ensures that most customers continue purchasing their products.
- Illusion of Choice – Many industries are dominated by a handful of large corporations. The supermarket shelves may be filled with different brands, but behind the scenes, they are owned by the same few entities. This creates a false perception of competition while maintaining price control.
- Scarcity & Fear Tactics – Corporations manipulate consumers into making hasty purchases by fabricating scarcity (e.g., limited-time offers, “exclusive” deals) and using fear tactics (e.g., “act now before prices rise further”).
- Overwhelming Complexity – Legal jargon, complicated terms of service, and deceptive pricing structures make it difficult for consumers to recognize collusive behavior. If the system is too complex to understand, most people simply accept it as normal.
These psychological tools ensure that corporations can maintain their collusive behaviours with minimal resistance from the public.
Real-World Examples of Collusive Behavior
1. The Pharmaceutical Industry – The Cost of Life-Saving Drugs
One of the most notorious examples of collusion is in the pharmaceutical industry, where companies have conspired to fix the prices of essential medications. The infamous Martin Shkreli case, where the price of Daraprim (a life-saving drug for parasitic infections) was increased from $13.50 to $750 per pill overnight, exposed how unchecked collusion can put lives at risk. Pharmaceutical giants often form secret agreements to delay the release of generic drugs, ensuring monopolistic control and inflated pricing.
2. Big Oil and Gas Cartels – Controlling Global Energy Prices
The Organization of the Petroleum Exporting Countries (OPEC) has long been accused of manipulating oil prices through coordinated production cuts and output restrictions. By colluding to maintain artificially high oil prices, OPEC members profit immensely while consumers and businesses suffer from skyrocketing energy costs. The global economy, which relies on stable energy prices, remains at the mercy of these cartel-like practices.
3. Tech Giants and Data Collusion
Google, Facebook, Apple, and Amazon (collectively known as Big Tech) have faced increasing scrutiny for their monopolistic behaviours. These companies engage in tacit collusion by setting industry-wide pricing standards, suppressing competition, and controlling digital market access. For instance, Apple and Amazon’s secret agreement to restrict third-party resellers led to artificially inflated product prices on platforms like Amazon, harming smaller businesses and consumers.
4. The Banking Sector – 2008 Financial Crisis
The 2008 financial crisis was, in many ways, a result of collusive behaviour in the banking sector. Leading banks, including Goldman Sachs, JPMorgan Chase, and Citigroup, manipulated mortgage-backed securities markets, engaged in fraudulent lending practices, and artificially inflated asset values. When the market collapsed, taxpayers bailed out these banks, while millions of ordinary citizens lost their homes and life savings.
The Destructive Force of Collusion
The consequences of collusive behaviour are far-reaching and detrimental to both individual consumers and the economy at large:
- Widening Wealth Inequality – Corporate collusion disproportionately affects the poor, as they spend a larger portion of their income on essential goods and services. The economic burden falls hardest on lower-income individuals when prices are artificially inflated.
- Suppression of Innovation—When companies collude, they have little incentive to improve products or lower prices. This stifles competition and prevents market-driven innovation.
- Economic Instability – From the Great Depression to the 2008 financial crisis, history has shown that unchecked corporate collusion can lead to economic collapse, massive layoffs, and financial ruin for millions.
- Consumer Exploitation – Whether through price gouging, inferior products, or limited choices, consumers ultimately pay the price for corporate greed.
Remedies: Breaking the Chains of Collusion
Despite the overwhelming power corporations hold, there are ways to combat collusive behaviour and restore fairness to the market:
- Stronger Antitrust Laws & Enforcement – Governments must impose stricter penalties for collusion, including corporate breakups, heavy fines, and criminal charges for executives involved in such practices.
- Public Awareness & Consumer Activism – Education is the strongest weapon against collusion. When consumers recognize deceptive practices, they can boycott unethical corporations, demand transparency, and push for fair competition.
- Whistleblower Protections – Encouraging employees to expose corporate collusion through whistleblower rewards and protections can help uncover illicit activities.
- Decentralization & Market Diversification – Promoting small businesses and decentralizing industries can reduce corporate monopolization, leading to fairer pricing and innovation-driven markets.
- Stronger Regulatory Oversight – Governments must establish independent watchdogs with the authority to investigate and dismantle monopolistic collusion before it causes irreparable harm.
Conclusion: Breaking the Chains of Economic Oppression
Collusive behaviour in economics is not just a technical issue—it is an assault on the very fabric of a fair society. Corporations and powerful entities manipulate markets, rig prices, and eliminate competition to funnel wealth into their hands at the expense of the masses. The poor and middle class bear the brunt of these manipulations, paying artificially high prices for necessities while wages stagnate and economic mobility halt.
The use of mass psychology only deepens this economic stranglehold. By exploiting cognitive biases—such as herd mentality, brand loyalty, and fear of missing out—corporations condition consumers to accept their own financial exploitation. Media narratives reinforce the illusion of free markets while quietly covering up the systemic corruption at play. The public is kept distracted by consumerism, while behind closed doors, deals are struck that further consolidate wealth and power.
The remedy is not simple, but it is necessary. Regulatory bodies must be stripped of corporate influence and held accountable for enforcement. Whistleblower protections must be strengthened, and severe legal repercussions should await those caught engaging in collusion. Consumers, too, must awaken to their power—through collective action, boycotts, and demand for transparency, the public can force a shift in corporate behaviour. The internet provides an unprecedented tool for exposing and challenging these injustices; the key is to use it effectively.
Collusion is theft in its most insidious form. It is not merely economics—it is a war between unchecked corporate greed and people’s fundamental right to a fair and just economic system. The question remains: Will society continue to tolerate this blatant robbery, or will it rise up to reclaim the markets from the hands of colluding elites? The answer will determine whether the future belongs to corporations or to the people.
