Forget the Holy Land. If Noah were looking for a place to drop anchor, this would be his dream destination.
Here in Australia — at least when it comes to business — we love to operate in pairs. There's a couple of airlines, a duo of food retailers, a pair of steelmakers, two resource giants and just a handful of banks.
And let's be honest, the only reason we still have four financial institutions is because — despite years of agitation — they haven't been allowed to hook up into a cosy couple.
It's easy to understand why this happens. In any industry, there might be multiple players to start, but, as time goes on, the bigger and better run firms tend to either gobble up the more vulnerable or put them out of business.
More efficiently run companies with greater economies of scale should then be able to offer you and me, consumers, better priced goods and services. Except, it doesn't always work out that way.
And this just happens to be one of those times.
If you've glanced at the TV or even only casually read the news in the past year, you'd have been hard pressed to avoid the onslaught of stories about the "cost of living".
Times are getting tough, we are told. The price of everything is rising because — after lying dormant for decades — inflation once again has gripped the global economy.
In a desperate bid to curb this economic evil, central banks here and around the world are jacking up interest rates to take the steam out of spending, making life even more expensive for anyone trying to keep a roof over their head.
Not everyone, however, is doing it tough. In the past few weeks, several big firms have reported stellar profits in the December half year and have been showering their investors with cash.
Feel like you're on the losing side?
How do they do it? Despite all the turmoil at ground level, many of our big companies have a special power. They have become what's known as price makers.
If you don't like the cost of tomatoes at one of the food giants, you don't have much choice. It's a brutal decision between either looking for a cheaper alternative, or going without. You could try bargaining with the checkout kid, but you'd be wasting your time.
That's all because, you're a price taker.
It's a tale writ large across the Australian economy. And, it runs counter to the very fundamentals of modern economics.
In a theoretical free enterprise system, supply and demand are supposed to determine price. But for that neo-classical model to work properly, one of the key conditions is that there should be many buyers and many sellers.
Let's just put that into perspective. When it comes to food retailing, we have 25.7 million hungry Australian mouths as buyers. And, on the other side, we have two sellers that, between them, control around 62 per cent of the market.
Get the picture?
It explains why Coles' earnings surged 17 per cent in the six months to the end of December while Woolworths notched a 14 per cent earnings improvement in the same period.
And before you say, 'Yeah, but they've only added a bit more than the higher costs they've had to deal with', like many well paid analysts did last week, think of this.
In a properly competitive capitalist economy, they wouldn't be able to simply look at their costs and then just add the profit margin they'd desired
Instead, they would have to compete with all the other suppliers out there and let prices, and hence their earnings, be determined by supply and demand.
Like many other industries in this land, they've become a duopoly. Sure, while there's a few other smaller players, they're the dominant partners in what's known as an oligopoly; not quite a monopoly but pretty close to it.
Keeping shareholders onside
Commonwealth Bank boss Matt Comyn spent a great deal of last week trying to explain the embarrassment of riches his organisation was reaping as the bank he runs widened its margins.
Pulling in more than $5 billion in just six months, he went out of his way to explain that the bank's profit margins actually peaked way back in November. The truth, however, is that despite higher borrowing costs, each of our big banks have dramatically pushed out their profit margins.
How do they get away with it? Easy. Because they can. Because they are price makers.
Every month since last April, indebted homeowners have been slugged with higher borrowing costs as the Reserve Bank has hiked rates.
But on the other side of the ledger, depositors have been left dangling. Transaction accounts have always earned little to no interest leaving a large slice of deposits pretty much cost free for the banks and returns free for depositors.
In recent times, however, the banks have ramped up their efforts to reduce returns to savers.
While returns on investment accounts and term deposits have lifted, it often has not been by the official cash rate rises. And when they have been lifted, it frequently has been only for new accounts and, even then, only for limited periods before slumping back to only slightly higher than the miserable levels they were before.
This has been a deliberate strategy cooked up in just the past few years as this excellent piece by Peter Martin explains.
But in the pantheon of profiteering, no-one even comes close to our national aviation icon, the Spirit of Australia.
With 65 per cent of the domestic market, protected by restrictions on foreign airlines flying local routes, Qantas last week delivered a record half year earnings bonanza of $1 billion.
For the second time since the pandemic – when it was showered with billions of dollars in taxpayer funds – the airline announced a $500 million share buyback to reward investors. It previously tipped $400 million into investors' pockets.
It's not as though it has pulled in the cash from a stellar performance in customer service.
Airline delays, cancellations and problems with refunds in the recovery phase from the pandemic were one thing. Exorbitant fares – including $1400 for a Sydney to Melbourne return last December – were quite another.
But hey, do we have a choice? Sure you do. There's Virgin with most of the rest of the 35 per cent domestic market.
The price of gas dominance
Canadian firm Brookfield knows when it's on a winner.
In conjunction with an American private equity firm, it last year lobbed an $18 billion takeover bid for local energy giant Origin Energy.
Origin, along with Santos and Shell, control close to 90 per cent of Australia's east coast gas supplies, according to the competition regulator. And for years they've been playing merry hell with it, exporting vast quantities of Liquified Natural Gas to their clients in China, leaving Australian industrial and household customers facing shortages and soaring prices.
So bad was the situation, the federal government last year foreshadowed price controls on local gas after earlier efforts by the Turnbull and Morrison governments to rein in the power of the exporters foundered.
The outrage from the industry was as palpable as it was laughable.
Price controls? The government, it claimed, was meddling in the free market, an argument that ignored the fact that its policy of plundering domestic supply had pushed prices into orbit.
The intervention, it argued, would kill foreign investment.
Indeed, Brookfield went quiet on the takeover, prompting outrage from some parts of the press as they ramped up speculation the bid either would be pulled or the price would be slashed.
Imagine the surprise when Brookfield stepped back into the fray last week. While it did indeed drop the price, it's now offering $8.90 instead of $9 a share, That's a price cut of less than 1 per cent.
Market domination has its advantages. It's extremely valuable.
Just ask Noah.