an interesting view of monopolization from a member of the Federal Trade Commission, Mark Meador, FTC Commissioner
Monopoly power has been a dominating force in the US economy for decades. Only in very recent years has the government begun to take action to break up concentrated markets. In the tech world, at the moment, it appears that a Federal judge may momentarily pass judgment on an effort to break up Google’s monopolistic practices in the market for advertising.
Since the early 1980s the nearly century-old anti-trust laws that kept the American economy reasonably competitive were replaced by the Chicago School antitrust theories, and, most notoriously, Judge Robert Bork’s 1978 book The Antitrust Paradox. This proclaimed that the only measure of the dangers of market concentration is the price paid by consumers.
As I have pointed out earlier:
What are the consequences of monopolized markets?
First, highly concentrated markets often exhibit elevated prices due to diminished competition.
Second, in the labor market, the reduction in competition for labor between corporations has held down wages.
Third, in many markets – particularly rural ones – there are very few suppliers of a commodity or service. Consequently, effective competition is lacking.
Fourth, monopolistic companies can dictate prices paid to their suppliers, resulting in minimal profits for the suppliers and consequently very low wages for their workers.
Fifth, monopolized markets eliminate small competitors and significantly increase the challenges for new firms entering. This stifles innovation in new products and services.1
Republicans and Democrats have both been remarkably silent for decades about the death of competition in virtually every market in our economy. See my earlier post Competitive Capitalism – long dead in the US – Monopolization of the economy is a central driver of our troubles….for an enumeration of this phenomenon.
Now, there are at least a few signs that antitrust enforcement may be coming back into style. The conservative website Commonplace, which describes itself as “Commonplace is that home for the New Right, building and sustaining a durable conservative majority that emphasizes the importance of family, community, and industry to the nation’s liberty and prosperity”, has published this interesting essay.
“Antitrust’s Conservative Future – Confronting the tyranny of concentrated economic power” by FTC Commissioner Mark Meador is a resounding call for a return to a broader view of the dangers of market concentration. The essay, 6,400 words long, several cups of coffee in length, provides a background in the history of antitrust politics and theory and a description of a basis for a renewed effort to change the course of competition in our economy. It is worth the read.
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