From the Economist: Across the West powerful firms are becoming even more powerful
Excerpt:
A wake-up call
The view that competition might be in peril extends beyond those travelling from New York to Chicago. It feeds into the public’s sense that the economy is rigged. Pension funds are making huge bets that the likes of Facebook and Hilton can crank out vast profits in perpetuity. Economists worry that powerful firms could distort interest rates; central-bank bosses debated this in August at their gathering at Jackson Hole. In Europe regulators are angry with Silicon Valley. America’s antitrust agencies are waking up from a decades-long slumber, rather like financial regulators after the shock of 2008. Into the vacuum has stepped a radical new antitrust movement that believes the ideal economy is made up of lots of smaller firms with fragmented economic power. It wants to smash concentrations of capital in the name of liberty.
But the story is more complex than big business unfairly crushing all before it. Powerful firms are often efficient and pass the gains to consumers; think of Walmart selling mountains of baked beans for peanuts. They are often innovative, too. Netflix is burning cash to entertain 130m binge watchers. Populists often claim that the West has been ravaged by Chinese competition and is full of lazy incumbents, but can both be true? If monopolies are causing prices to rise, why is inflation low?
Adam Smith, a Scottish economist, attacked the guilds that stifled 18th-century Britain. As America boomed in the 19th century industrial empires were created that trust-busters later broke up. Cartels were instrumental in 20th-century totalitarianism. In 1946 American administrators dissolved Japan’s zaibatsu (large industrial and banking conglomerates), and Germany’s Christian Democrats made competition their first priority in their economic manifesto in 1949. Margaret Thatcher used competition to revive Britain’s economy in the 1980s. In the 1990s the European Union used the single market to prise open stuffy industries. But after 2000 the West became complacent. Globalisation was assumed to guarantee competition. Over-mighty firms were judged to be a risk for corrupt emerging countries like Russia and the Philippines but not the rich world.
In fact powerful firms were gaining more clout in the West, for bad and good reasons. The bad reasons involve muffling competition. Some $44trn of takeovers have taken place since 1998, many aimed at creating pricing power or efficiency gains whose benefits are not passed to consumers. It has become fashionable for managers to build “moats”, or barriers to entry.
The good reason for more powerful firms is the rise of an innovative elite that is an engine of efficiency. Its members are companies that have mastered digital technologies and enjoy network effects that help them fend off slower competitors, says John Van Reenen of mit. In the tech sector this is clear. In old-fashioned industries, however, particularly regulated ones, digital wizardry is less likely to explain powerful firms’ clout. Whether they were created by cronyism or genius, if extraordinary profits are maintained for many years with no sign of new entrants, it is a clue that competition may not be working. In America and Europe there is a growing body of evidence that this is the case.
~snipped the graphs...but not ignoring them~
'Nuff said? Methinks not - and here's the word that best characterizes that market-economy. It is "oligopoly".A wake-up call
The view that competition might be in peril extends beyond those travelling from New York to Chicago. It feeds into the public’s sense that the economy is rigged. Pension funds are making huge bets that the likes of Facebook and Hilton can crank out vast profits in perpetuity. Economists worry that powerful firms could distort interest rates; central-bank bosses debated this in August at their gathering at Jackson Hole. In Europe regulators are angry with Silicon Valley. America’s antitrust agencies are waking up from a decades-long slumber, rather like financial regulators after the shock of 2008. Into the vacuum has stepped a radical new antitrust movement that believes the ideal economy is made up of lots of smaller firms with fragmented economic power. It wants to smash concentrations of capital in the name of liberty.
But the story is more complex than big business unfairly crushing all before it. Powerful firms are often efficient and pass the gains to consumers; think of Walmart selling mountains of baked beans for peanuts. They are often innovative, too. Netflix is burning cash to entertain 130m binge watchers. Populists often claim that the West has been ravaged by Chinese competition and is full of lazy incumbents, but can both be true? If monopolies are causing prices to rise, why is inflation low?
Adam Smith, a Scottish economist, attacked the guilds that stifled 18th-century Britain. As America boomed in the 19th century industrial empires were created that trust-busters later broke up. Cartels were instrumental in 20th-century totalitarianism. In 1946 American administrators dissolved Japan’s zaibatsu (large industrial and banking conglomerates), and Germany’s Christian Democrats made competition their first priority in their economic manifesto in 1949. Margaret Thatcher used competition to revive Britain’s economy in the 1980s. In the 1990s the European Union used the single market to prise open stuffy industries. But after 2000 the West became complacent. Globalisation was assumed to guarantee competition. Over-mighty firms were judged to be a risk for corrupt emerging countries like Russia and the Philippines but not the rich world.
In fact powerful firms were gaining more clout in the West, for bad and good reasons. The bad reasons involve muffling competition. Some $44trn of takeovers have taken place since 1998, many aimed at creating pricing power or efficiency gains whose benefits are not passed to consumers. It has become fashionable for managers to build “moats”, or barriers to entry.
The good reason for more powerful firms is the rise of an innovative elite that is an engine of efficiency. Its members are companies that have mastered digital technologies and enjoy network effects that help them fend off slower competitors, says John Van Reenen of mit. In the tech sector this is clear. In old-fashioned industries, however, particularly regulated ones, digital wizardry is less likely to explain powerful firms’ clout. Whether they were created by cronyism or genius, if extraordinary profits are maintained for many years with no sign of new entrants, it is a clue that competition may not be working. In America and Europe there is a growing body of evidence that this is the case.
So, where's the Department of Justice when you (the consumer) need it ... ?
You ask, "where's the Department of Justice". The DOJ has no bearing on this. The globalists have broken no laws.
Common Industries Overshadowed By Oligopolies
Cable Television Services
Entertainment Industries (Music and Film)
Airline Industry
Mass Media
Pharmaceuticals
Computer & Software Industry
Cellular Phone Services
Smart Phone and Computer Operating Systems
Aluminum and Steel
Oil and Gas
Auto Industry
No...the only hope for the "little guys" is people like Trump. There are those people around the world and they are the globalist's worst nightmare.
Your concern with (all combined?) big firms having a 25-35% (which is a minority, BTW) share of the (a given?) market does not seem like such a big deal.
Oh, come off it - will you?
Ever hear of the Antitrust Laws that began with the Sherman Act of 1890, and the Clayton Act of 1914 and the Federal Trade Commission Act of 1914? I guess not! (For those interested this WikiP article: United States Antitrust Law)
Those laws are still on the books waiting for a DOJ-with-balls to study markets and prove how oligarchies are manipulating markets. It's been a lonngggggggg wait!
The acts mentioned went after monopolies in the 19th century and they managed well to solve that problem. But since the early 20th century, the "bad-boys" have learned how to maximize profits by minimizing competition. How do you do that? Easy, you buy-out market-share!
There is no "direct contact" amongst competitors. What companies do is buy-out market participants and obtain a dominant position (in terms of total trade) of the largest two, three or four companies.
That's called an oligopoly.
And how many oligopolies to which do we, the sheeple, pay extraordinary prices due to a lack of Real Competition? The list is long- see here: What are some current examples of oligopolies?
Excerpt:
We the consumers are getting screwed royally every day in every way ...
PS: And who benefits most from oligopolies? Those who run them! The Replicant millionaires/billionaires helped finance Donald Dork's election and so he just paid-them-back with a solid, whopping reduction in upper-income taxation. (Which applies as well for his family. Those poor, poor kids!)
THE MIRACLE WORKER
Consummate BS.
The Replicants have NEVER EVER BEEN for the small-people on the shop-floor or behind the counter in a department store.
How do I know that? Because Replicant Presidents have been most responsible for bringing down upper-income taxation. It started with, of all people, JFK and LBJ in the 1960s, but Reckless Ronnie in the 1980s was the real "Saint" of income taxation reduction. (See this info-graphic: History, Marginal Tax Rate for Highest and Lowest Income Earners.)
Now you know why the Replicants erected so many statues of "Saint Ronnie". He was their "miracle-worker" ... !
I have no idea what you mean by "Replicants", but if you are talking about politicians then you are NOT talking about the same people I'm talking about.
Keyword from my post: Multinational globalists.
Get on the same page, eh?
Nope!
You are trying to roll multiple different subjects into one bag.
That cannot be done in this instance:
*A multinational is a company that exploits a variety of international markets.
*A globalist is "a person who advocates the interpretation or planning of economic and foreign policy in relation to events and developments throughout the world".
Trump would have been a Communist if he thought it would elect him president! The reason he hates Obama is (quite likely) because Obama was not keen on him personally. (Wow! How did THAT ever happen?!? ;^)
And since he had no other real choice - he became a Replicant! And if you cannot understand that "play on words" neither am I about to explain it ...
PS:
*By his actions, Trump was the first candidate for PotUS that prompted the psychologist community to declare him not apt for the presidency. Of course, he never bared his soul professionally on anyone's couch. It was quite simply his narcissistic behaviour.
*Narcissism is a known psychological disorder (see here) that is often treatable. But not by employing Twitter to bare your deepest thoughts to a world that is completely indifferent to them. (Behave like a clown and be taken for a clown.)
A multinational company can also be globalist...per your two definitions. These are no contradictory terms.
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