THE PLAINTIVE shrieks of Marathon Oil, the aggressive growls of Mobil and the rescue offered by U.S. Steel promise another exciting corporate soap opera. But you aren't merely a spectator. You're watching one more episode of a profound change overtaking the economy in which you live and work. What -- if anything -- ought your government to be doing about it?
The federal government tends to measure all of these mergers by only one traditional standard, the definition of competition laid down by the antitrust laws. By that standard, there's probably no fundamental reason for the government to forbid U.S. Steel, or even Mobil, to take over Marathon. The oil industry is fiercely competitive, and Mobil-plus-Marathon would not be much larger than any of several other oil companies.
But there's much more here than random conglomeration. Like nearly all of the recent large mergers, this one revolves around oil and oil money. The American economy is now going through an enormous shift of wealth toward the oil producers and refiners, away from a group of heavy manufacturing industries in the middle range of technology. Steel and cars are the most visible examples. U.S. Steel is engaged in a vigorous campaign to move its assets out of a stagnant business and into others with better prospects for profits. In principle, that's good, not only for the company, but also for the economy as a whole. Whether the merger of a big steel company and a big oil company is in fact manageable -- and other companies' experiences raise doubts -- remains a question for the stockholders, not the government, to worry about.
The Mobil-Marathon merger would raise a different kind of issue. The rapidly increasing concentrations of industrial wealth in the oil sector requires more attention than it's getting. It's not solely a matter of maintaining competition among the oil companies, but perhaps also keeping an eye on the influence that any of them, or all of them together, can exert on the rest of the economy.
In 1972, before the great rise in oil prices began, there was one oil company among the five largest American industrial corporations ranked by sales in Fortune Magazine's annual survey. There were seven oil companies among the top 20 industrial corporations. In 1980, Fortune found, four of the top five were oil companies, and 13 of the top 20. Marathon isn't that big, but by last year it was bigger, in both sales and profits, than such better-known companies as RCA and Bethlehem Steel.
Most of the oil companies are now rich to a point at which the overriding question for them is where and how to invest their sudden wealth. This surge of profits is not only strengthening the case for special and rigorous rules of competition within the oil industry. It also indicates a need for special taxes as well, to limit the speed at which one sector's financial power rises in proportion to all the others'.