> Lately I've been wondering if the efficient market hypothesis was actually more true a century ago than it is now. Probably. A century ago, the companies wh

> Lately I've been wondering if the efficient market hypothesis was actually more true a century ago than it is now. Probably. A century ago, the companies which approached monopoly were in industries that had either huge economies of scale or very strong network effects. The United States Steel Corporation was an example of the first, and the Pennsylvania Railroad an example of the second. Even railroads were somewhat local monopolies - the Pennsylvania never merged with the Union Pacific. Not that the government at the time would have let them. What changed? - Better transport and communication. Selling to country-sized and world-sized markets became feasible. - Computerization. Big companies used to have huge clerical plants of people pushing paper. Some of that paper pushing scaled faster than linearly, so the bigger the company, the worse it got. The administration system of big companies couldn't get out of its own way. It's forgotten now, but pre-computer, railroad companies had no idea where most of their shipments currently were. Paperwork was nailed to the side of boxcars and traveled with the load. As late as the 1960s, auto companies were struggling to figure out where their vehicles in transit on rail cars had gotten lost. Today the mechanics of tracking everything is a non-problem. Walmart, Target, and Amazon work fine. Planetary-scale companies are possible and common. - Bigger banks. Until the 1980s, US banks could not operate across state lines. Until the 1990s, nationwide banks did not exist in the US. This limited large business access to borrowed capital. Most companies were primarily funded by equity, supported by national stock markets.