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Why not both? The modern dismantling of antitrust regulation and enforcement is a significant driver of both. It's gotten way worse now than ever, to the point

Why not both? The modern dismantling of antitrust regulation and enforcement is a significant driver of both. It's gotten way worse now than ever, to the point where private equity firms like Vanguard and Blackrock can be the biggest shareholders in direct duopoly competitors (KO and PEP are an example), or where investors and producers are permitted to fully horizontally and vertically integrate (AMZN is an example). And media (among many other industries) has been permitted to consolidate to ridiculous levels that would have been unimaginable to the architects of early-mid 20th century antitrust laws even on a practical level -- an Amazon-level entity would have been literally impossible to envision in the early 20th century because companies just practically couldn't get that big with manual technologies. The largest US company in 1929 had revenues of about $1.5bn - roughly $30bn in 2023 dollars, which wouldn't even put it in the Fortune 100 today. Walmart today has revenues of about $600bn, which is roughly equivalent to 6x the top 50 companies in the US in 1929 combined! It's mind-blowing to me that economics is still using these ridiculously old, flawed models whose assumptions are less true than ever. To me, econ 101 should be teaching how irrational consumers and lawmakers are, what state capture is, monopoly-seeking behaviours as the primary modern driver of profit growth, etc...

tzs 3y ago
Econ 101 is using those models for the same reason Phys 101 uses Newtonian mechanics in a vacuum with rigid bodies of low mass and no charge and with all collisions being elastic. They are a good enough approximation to reality in a lot of useful situations, and understanding them does help in later classes when they bring in relativity, electromagnetism, fluids, thermodynamics, quantum mechanics, bodies that aren't rigid, and so on. Even after you've got all that stuff under your belt the Phys 101 stuff remains useful, because often something that cannot be modeled accurately enough with just Phys 101 material can be modeled accurately enough if you take the Phys 101 model and tweak it a bit with the rest. I believe its the same in economics.
- lesuorac 3y ago
  When I took Econ 101 it was very much lectured into me that these models are all based on a bunch of assumptions. The thing I ultimately found pretty amusing that nearly every model had perfect information, many buyers, many sellers as part of the assumptions and almost every time I see somebody citing Econ 101 either 2 or 3 of the assumptions aren't there.
0xy 3y ago
You cited Amazon's vertical integration as a reason they need to be broken up, however Amazon retail's margins vary between 0 and 5%. Walmart on the other hand is more like 25%. Amazon is the best middle man that customers could ever want. They clip the ticket an almost imperceptible amount. The stores you'd probably promote, small mom and pop stores, generally have 50%+ margins. Who exactly is gouging customers? It's not Amazon retail.
- piva00 3y ago
  I feel we are entering seriously dangerous territory when someone is defending monopolistic practices because during the time of a monopoly consolidating itself the customers get a brief period of lowered prices that the monopolistic forces use to undercut all competitors.
  - 0xy 3y ago
    Amazon is not a monopoly, and the second they raise margins they'll lose business to eBay, Shopify, Walmart, Target and others. Do you think Amazon has 0-5% margins because they're generous or because it's a deliberate strategy to attract and retain customers? Customers would scramble if Amazon margins were 50%.
    - piva00 3y ago
      Monopolistic practices is the term I used, exactly to not call Amazon a monopoly because they are not one yet. They are engaging in monopolistic practices though (price dumping causing stifled competition, etc.).
- adwn 3y ago
  > The stores you'd probably promote, small mom and pop stores, generally have 50%+ margins. Yeah, no, they really don't.
  - 0xy 3y ago
    https://www.statista.com/statistics/887938/convenience-store-profit-margin-us-product-category/ https://www.statista.com/statistics/887938/convenience-store...
mrep 3y ago
> The largest US company in 1929 had revenues of about $1.5bn - roughly $30bn in 2023 dollars, which wouldn't even put it in the Fortune 100 today. Walmart today has revenues of about $600bn, which is roughly equivalent to 6x the top 50 companies in the US in 1929 combined! US real gdp is 10x what is was in 1947 [0] (FRED only goes back to 1947). Add in the extra 18 years and the fact a bunch of companies are now global thus expanding their markets and those revenue numbers don't look so surprising. Also, why'd you pick the start of the great depression as your start date? [0]: https://fred.stlouisfed.org/series/GDPC1 https://fred.stlouisfed.org/series/GDPC1

tzs 3y ago

Econ 101 is using those models for the same reason Phys 101 uses Newtonian mechanics in a vacuum with rigid bodies of low mass and no charge and with all collisions being elastic. They are a good enough approximation to reality in a lot of useful situations, and understanding them does help in later classes when they bring in relativity, electromagnetism, fluids, thermodynamics, quantum mechanics, bodies that aren't rigid, and so on. Even after you've got all that stuff under your belt the Phys 101 stuff remains useful, because often something that cannot be modeled accurately enough with just Phys 101 material can be modeled accurately enough if you take the Phys 101 model and tweak it a bit with the rest. I believe its the same in economics.

lesuorac 3y ago
When I took Econ 101 it was very much lectured into me that these models are all based on a bunch of assumptions. The thing I ultimately found pretty amusing that nearly every model had perfect information, many buyers, many sellers as part of the assumptions and almost every time I see somebody citing Econ 101 either 2 or 3 of the assumptions aren't there.

0xy 3y ago

You cited Amazon's vertical integration as a reason they need to be broken up, however Amazon retail's margins vary between 0 and 5%. Walmart on the other hand is more like 25%. Amazon is the best middle man that customers could ever want. They clip the ticket an almost imperceptible amount. The stores you'd probably promote, small mom and pop stores, generally have 50%+ margins. Who exactly is gouging customers? It's not Amazon retail.

piva00 3y ago
I feel we are entering seriously dangerous territory when someone is defending monopolistic practices because during the time of a monopoly consolidating itself the customers get a brief period of lowered prices that the monopolistic forces use to undercut all competitors.
- 0xy 3y ago
  Amazon is not a monopoly, and the second they raise margins they'll lose business to eBay, Shopify, Walmart, Target and others. Do you think Amazon has 0-5% margins because they're generous or because it's a deliberate strategy to attract and retain customers? Customers would scramble if Amazon margins were 50%.
  - piva00 3y ago
    Monopolistic practices is the term I used, exactly to not call Amazon a monopoly because they are not one yet. They are engaging in monopolistic practices though (price dumping causing stifled competition, etc.).
adwn 3y ago
> The stores you'd probably promote, small mom and pop stores, generally have 50%+ margins. Yeah, no, they really don't.
- 0xy 3y ago
  https://www.statista.com/statistics/887938/convenience-store-profit-margin-us-product-category/ https://www.statista.com/statistics/887938/convenience-store...

mrep 3y ago

> The largest US company in 1929 had revenues of about $1.5bn - roughly $30bn in 2023 dollars, which wouldn't even put it in the Fortune 100 today. Walmart today has revenues of about $600bn, which is roughly equivalent to 6x the top 50 companies in the US in 1929 combined! US real gdp is 10x what is was in 1947 [0] (FRED only goes back to 1947). Add in the extra 18 years and the fact a bunch of companies are now global thus expanding their markets and those revenue numbers don't look so surprising. Also, why'd you pick the start of the great depression as your start date? [0]: https://fred.stlouisfed.org/series/GDPC1 https://fred.stlouisfed.org/series/GDPC1