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Monopolization almost certainly is occurring. The left usually cites weak antitrust enforcement. The right usually cites regulatory barriers that make it expens
by dcolkitt 6y ago
Monopolization almost certainly is occurring. The left usually cites weak antitrust enforcement. The right usually cites regulatory barriers that make it expensive to compete without economies of scale. I actually think both sides are at least partially correct.
However what almost everyone overlooks is the demographic transition. The US, along with every other developed economy, is significantly older today than it was 40 years ago. And the fact of the matter is that an older work force almost certainly leads to an economy with larger, older firms.
Most entrepreneurial activity is disproportionately carried out by younger people. Young workers are much more likely to work for small, young, growing firms. That makes sense because they have longer horizons and can take more risks. Older workers, who have higher fixed expenses and are closer to retirement, prefer the stability of a stable, large company with low employee turnover.
Macroeconomists who have attempted to quantify this impact, generally find that the average firm age in an economy linearly increases with the average worker's age.[1] Since older firms, tend to be larger, slower growing, and less competitive, it's not wonder we've seen an increase in monopolization.
[1] https://www.nber.org/papers/w25382 https://www.nber.org/papers/w25382
- WalterBright 6y ago> Since older firms, tend to be larger, slower growing, and less competitive, it's not wonder we've seen an increase in monopolization. This is self-contradictory.
- chrischen 6y agoNot if you consider that older larger firms can use their position to artificially suppress competition.
- WalterBright 6y agoThe government is the tool used to suppress competition. This is why the solution of making the government ever more powerful isn't going to work.
- Apocryphon 6y agoThe government directed Facebook to suppress Snap? https://techcrunch.com/2019/10/04/snap-ceo-isnt-expecting-much-from-facebook-antitrust-investigations/ https://techcrunch.com/2019/10/04/snap-ceo-isnt-expecting-mu...
- WalterBright 6y agoThink about your local ISP. They usually have a local monopoly because they use the government to make competition illegal.
- Apocryphon 6y agoYes, regulatory capture is a problem, but it's somewhat ludicrous to make a blanket statement like "government is the tool used to suppress competition". It's one tool in the toolbox, perhaps a significant one, but hardly the only one.
- WalterBright 6y agoHealth care is another example. The government empowers the AMA to strictly control the number of seats in medical school, thereby restricting the supply of doctors and competition. Licensing, permits, etc, are all ways to limit and prevent competition.
- Apocryphon 6y agoAgain, I do not deny that governments have been used as a tool for monopolies to form, but it is dubious that they are the only tool used by bad actors, nor is regulatory capture the only method for anticompetitive behavior.
- WalterBright 6y agoI did not say "only".
- tmh79 6y agohow is this contradictory? Firms that are monopolistic are less competitive, larger, and slower growing. Reducing monopolistic tendencies increases capital growth, competition, and reduces average firm size. This is well understood economics. Monopolies arent' some hypercompetitive ultra capitalist battlespace, they're fat and happy, and the most impactful teams they employ are lobbyists and policy folks in DC. Look at like, comcast and what they did with the FCC.
- AQuantized 6y agoThose attributes stem from them being a monopoly, they don't create it in the first place. He's questioning the implication that being less competitive and slower growing would allow you to obtain more of a monopoly.
- jagged-chisel 6y agoThe large, lumbering not-yet-a-monopoly has no method to increasing market share other than buying smaller competitors; thus leading to monopolization.
- deleted 6y ago[deleted]
- devalgo 6y ago> The US, along with every other developed economy, is significantly older today than it was 40 years ago. Looking only at average age doesn't give a full picture, how does this square with the Millenials recently becoming the largest generational cohort? By your logic shouldn't there be a massive wave of young growing companies.
- bobthepanda 6y agoMillenials aren't that young. The oldest ones are hitting their 40s.
- randomname93857 6y ago> The US, along with every other developed economy, is significantly older today than it was 40 years ago. As employees are squeezed out of profit, life gets more expensive and it gets harder to have kids.
- tarsinge 6y ago> The left usually cites weak antitrust enforcement. Personally for a left view I would add cash/capital accumulation. It's kind of the same thing happening for individuals with wealth and real estate. Regulation is failing to bring the balance between the revenues of capital (which are exponential unregulated) vs the revenues of work. At one point you can't even compete anymore if you start from scratch. Competitors with billions in cash can pretty much "kill" any new business they want.