Examples of Market Structure in "The Grapes of Wrath"

In a pure competition market, multiple sellers offer a very similar or standardized product, and individual producers cannot exert control over the market price. The novel shows the failure of this system. The wheat farmers are in a pure competition market to start, but after wheat producers move to Oklahoma and strip the land, which is not suited for the crop, they set off a chain of events that make it impossible to grow other crops there. The whole agricultural community is affected. Workers also find themselves in a pure competition market that ultimately fails them. They compete for work that pays a standard price, but that price keeps falling in response to market conditions, regardless of how much work they do or the quality of work they provide.

A monopolistic competition also is known as imperfect competition. Companies sell items that are differentiated, either in the product itself or in the branding of it. Without government intervention, monopolistic competition can lead to monopolies, in which one business gains power in the market. In "The Grapes of Wrath," the bank quickly gains power and creates a monopoly. It owns the farms, the land and the businesses. It exerts significant control over what jobs are available, what wages are paid, and what opportunities the workers have for mobility.

In an attempt to stabilize the market during the Great Depression, President Roosevelt created the National Recovery Administration. One of its roles was to create regulations for fair competition. However, these rules led to a centralization of power in some industries, creating a de facto oligopoly, or power in the hands of a few. In "The Grapes of Wrath," large farms, banks and other businesses gain power in the market and cause the small business owners to close up shop, as only the large businesses have the means to compete. Where the Joads once saw their friends and neighbors able to open new businesses and try to take control of their financial futures, they eventually saw those same people lose their businesses to big competitors.

In a monopsony, many sellers outnumber only one buyer. This often happens when a company becomes a monopoly and gains so much power that many other companies are pursuing it to become its supplier. In "The Grapes of Wrath," the companies are the buyer, and the workers are the sellers. When companies gain power, such as the few successful farming operations, and work becomes scarce, a single company is able to be more selective about the work it "buys." It can lower its wages and set the terms for labor, such as the number of hours or the working conditions. The novel shows the destructive effects of a monopsony on the workers who have fewer options because of it.