Here we indicate the impact of Big Business on economic theory itself and wage labour. In the words of Michal Kalecki, perfect competition is "a most unrealistic assumption" and "when its actual status of a handy model is forgotten becomes a dangerous myth." [quoted by Malcolm C. Sawyer, The Economics of Michal Kalecki, p. 8] Unfortunately mainstream capitalist economics is built on this myth. Ironically, it was against a "background [of rising Big Business in the 1890s] that the grip of marginal economics, an imaginary world of many small firms. . . was consolidated in the economics profession." Thus, "[a]lmost from its conception, the theoretical postulates of marginal economics concerning the nature of companies [and of markets, we must add] have been a travesty of reality." [Paul Ormerod, Op. Cit., pp. 55-56]

That the assumptions of economic ideology so contradicts reality has important considerations on the "voluntary" nature of wage labour. If the competitive model assumed by neo-classical economics held we would see a wide range of ownership types (including co-operatives, extensive self-employment and workers hiring capital) as there would be no "barriers of entry" associated with firm control. This is not the case — workers hiring capital is non-existent and self-employment and co-operatives are marginal. The dominant control form is capital hiring labour (wage slavery).

With a model based upon "perfect competition," supporters of capitalism could build a case that wage labour is a voluntary choice — after all, workers (in such a market) could hire capital or form co-operatives relatively easily. But the reality of the "free" market is such that this model does not exist — and as an assumption, it is seriously misleading. If we take into account the actuality of the capitalist economy, we soon have to realise that oligopoly is the dominant form of market and that the capitalist economy, by its very nature, restricts the options available to workers — which makes the notion that wage labour is a "voluntary" choice untenable.

If the economy is so structured as to make entry into markets difficult and survival dependent on accumulating capital, then these barriers are just as effective as government decrees. If small businesses are squeezed by oligopolies then chances of failure are increased (and so off-putting to workers with few resources) and if income inequality is large, then workers will find it very hard to find the collateral required to borrow capital and start their own co-operatives. Thus, looking at the reality of capitalism (as opposed to the textbooks) it is clear that the existence of oligopoly helps to maintain wage labour by restricting the options available on the "free market" for working people. Chomsky states the obvious:

"If you had equality of power, you could talk about freedom, but when all the power is concentrated in one place, then freedom's a joke. People talk about a 'free market.' Sure. You and I are perfectly free to set up an automobile company and compete with General Motors. Nobody's stopping us. That freedom is meaningless . . . It's just that power happens to be organised so that only certain options are available. Within that limited range of options, those who have the power say, 'Let's have freedom.' That's a very skewed form of freedom. The principle is right. How freedom works depends on what the social structures are. If the freedoms are such that the only choices you have objectively are to conform to one or another system of power, there's no freedom." [Language and Politics, pp. 641-2]

As we noted in section C.4, those with little capital are reduced to markets with low set-up costs and low concentration. Thus, claim the supporters of capitalism, workers still have a choice. However, this choice is (as we have indicated) somewhat limited by the existence of oligopolistic markets — so limited, in fact, that less than 10% of the working population are self-employed workers. Moreover, it is claimed, technological forces may work to increase the number of markets that require low set-up costs (the computing market is often pointed to as an example). However, similar predictions were made over 100 years ago when the electric motor began to replace the steam engine in factories. "The new technologies [of the 1870s] may have been compatible with small production units and decentralised operations. . . That. . . expectation was not fulfilled." [Richard B. Du Boff, Op. Cit., p. 65] From the history of capitalism, we imagine that markets associated with new technologies will go the same way.

The reality of capitalist development is that even if workers invested in new markets, one that require low set-up costs, the dynamic of the system is such that over time these markets will also become dominated by a few big firms. Moreover, to survive in an oligopolised economy small cooperatives will be under pressure to hire wage labour and otherwise act as capitalist concerns (see section J.5.11). Therefore, even if we ignore the massive state intervention which created capitalism in the first place (see section B.3.2), the dynamics of the system are such that relations of domination and oppression will always be associated with it — they cannot be "competed" away as the actions of competition creates and re-enforces them (also see sections J.5.11 and J.5.12 on the barriers capitalism places on co-operatives and self-management even though they are more efficient).

So the effects of the concentration of capital on the options open to us are great and very important. The existence of Big Business has a direct impact on the "voluntary" nature of wage labour as it produces very effective "barriers of entry" for alternative modes of production. The resultant pressures big business place on small firms also reduces the viability of co-operatives and self-employment to survive as co-operatives and non-employers of wage labour, effectively marginalising them as true alternatives. Moreover, even in new markets the dynamics of capitalism are such that new barriers are created all the time, again reducing our options.

Overall, the reality of capitalism is such that the equality of opportunity implied in models of "perfect competition" is lacking. And without such equality, wage labour cannot be said to be a "voluntary" choice between available options — the options available have been skewed so far in one direction that the other alternatives have been marginalised.