Unregulated capitalism will naturally result in the development of corporate monopolies, such as in the Gilded Age in the United States. During this period, corruption was rampant as business leaders spent significant amounts of money ensuring that government did not regulate their activities. Historian Howard Zinn argues that the U.S. government was acting exactly as Karl Marx described capitalist states: "pretending neutrality to maintain order, but serving the interests of the rich". Government regulations, such as the Sherman Antitrust Act of 1890, were passed in order to ensure market competition. During the neoliberal period, the weakening of such regulations, along with globalization and increased financialization, saw the entrenchment of corporate power on a global scale and the rise of what economist Joseph Stiglitz describes as "global behemoths" (primarily from the United States) such as Apple, Microsoft, Google, Cisco, and Oracle. This development coincided with a sharp increase in economic inequality and a global race to the bottom, which Ramaa Vasudevan, associate professor of economics at Colorado State University, describes as a "relentless quest for cheap labor."
Edmund Phelps published an analysis in 2010 theorizing that the cause of income inequality is not free market capitalism, but instead is the result of the rise of corporatization. In this view, corporatization is the antithesis of free market capitalism. It is characterized by semi-monopolistic organizations and banks, big employer confederations, often acting with complicit state institutions, in ways that discourage (or block) the natural workings of a free economy. The primary effects of corporatization are the consolidation of economic power and wealth, with the end results being the attrition of entrepreneurial and free market dynamism.
His follow-up book, Mass Flourishing, further defines corporatization by the following attributes: power-sharing between government and large corporations (exemplified in the U.S. by widening government power in areas such as financial services, healthcare, energy, law enforcement/prison systems, and the military through regulation and outsourcing), an expansion of corporate lobbying and campaign support in exchange for government reciprocity, escalation in the growth and influence of financial and banking sectors, increased consolidation of the corporate landscape through merger and acquisition (with ensuing increases in corporate executive compensation), increased potential for corporate/government corruption and malfeasance, and a lack of entrepreneurial and small business development leading to lethargic and stagnant economic conditions.