The Wall Street Journal has finally acknowledged what the rest of us have long known to be the problem with the current capitalist system: there’s not enough competition.

It’s ironic, but it’s true: because of all the mergers and acquisitions of the past several years; modern-day capitalism is completely at odds with the free-enterprise system. The latter is driven by competition that forces players to innovate, become more efficient, and offer better goods and services at lower cost. The former is like the Blob of the classic 1958 science-fiction film: it sucks up everything, consumes everything in its path, growing larger and larger – and at the same time, becomes sluggish and moribund.

In some ways, it’s not all that much better than the state-owned monopolies under the old Soviet system.

When a corporation takes over everything around it through mergers and acquisitions, it’s not good for society, it’s not good for democracy – and it’s definitely not good for consumers. We’ve seen the result with the media, with airlines and with banks and financial institutions. Increasingly, it’s looking like we’ll be seeing it with health insurers as well. This threatens to undo much of the good accomplished by the Affordable Care Act in reining in costs.

Now, the Wall Street Journal itself admits this is bad for business.

Back in 2004, Bloomberg published a report outlining the effects mergers and acquisitions have on consumers. In the short-term, it increases profits and revenues for the companies. In the long run, however, the result is customer frustration and dissatisfaction – both because they realize they have fewer choices, and because there is usually a decline in the quality of service. And of course, when a company has a monopoly on a product or service in a given market, it can pretty much charge what it likes. Where is the customer going to go?

Another factor is what WSJ reporter Greg Ip describes as “network effects.” People buy into whatever it is their friends and acquaintances seem to like. A classic example: the popular social media site Facebook. Believe it or not, Facebook has over a dozen competitors. However, everyone sees everyone else on Facebook – which increases its perceived value. Even Facebook users who express dissatisfaction aren’t inclined to use another networking site.

Of course, the cycle feeds on itself. As companies merge, creating larger, fewer, more powerful entities, it raises barriers to small entrepreneurs trying to enter the market. That, in turn, enables the big corporations to become even bigger and more entrenched, further raising the barriers…and so it goes.

Why all the merger mania? Is it simply greed and avarice? The short answer might be yes – but it’s not that simple. Under ideal conditions, when companies enjoy the kind of record profits they have seen over the past several years, as well as historically low interest rates, they expand their capacity to produce more products or provide their services to a wider customer base. However, economic conditions for consumers haven’t been all that great. They haven’t had as much money to spend on goods and services. Thus, companies find that it makes more economic sense to grow through mergers and acquisitions than expanding capacity.

Again, it’s a cycle that feeds on itself; as those mergers eliminate the competition, there is less incentive to invest in growing the business from within.

One thing is certain: merger mania stifles innovation and lowers the quality of goods and services. It is even a factor in the growth of income inequality that has reached epic proportions over the past generation. It will require the government to step in to rejuvenate the free-enterprise system by establishing rules of the game – as well as enforcing the ones that exist.

As it was back in the days of FDR and the New Deal, capitalism once again needs to be rescued from itself.

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K.J. McElrath is a former history and social studies teacher who has long maintained a keen interest in legal and social issues.