![]() ![]() How we respond as a society depends on how we imagine these concentrations of power came to be. In other words, monopolization and consolidation can happen for what seem to be good, or least necessary, reasons. You go into a pandemic with the institutions you have, and many of our public institutions are at this point quite degraded, so the only way to operate is through channels controlled by concentrated power. It is also not always evident whether the attempt to grow is driven by the need for more productive capacity, or by the desire to engage in financial engineering or acquire market power.Īnd sometimes even the question itself becomes irrelevant, as we simply have no choice but to depend on a monopoly in a crisis and regulate or hope that the essential service operates in the public interest. In a pandemic, these distinctions can become even more difficult to discern, since there really is a deep need for rapid deployment of capital, often in distressed situations. It is hard to tell the difference between a rapidly growing business and a roll-up of market power. Similarly, Boeing once made great planes, now it has great connections and big bailouts, an engineering powerhouse turned into a financial engineering powerhouse.īut there’s something important about the question. He has however restructured his board of directors to build political protection in a Republican administration. Mark Zuckerberg’s Facebook product was pretty good in 2004, but there’s little innovation coming from Facebook these days. In 2002, the corporation began a merger strategy, and within just a few years it had a sophisticated political operation designed to ward off privacy laws and antitrust suits. Google, for instance, launched a great search engine, garnering its market share in search in the early 2000s. Many monopolies (though not all) start out with an innovative product and then morph into political protection rackets to protect what was once a compelling product but is now purely a cash cow. The answer to these questions is complex. Isn’t a monopoly, he asked, just evidence that a corporation had a better product than the competition? How can you say that monopoly power is a result of anti-competitive tactics? ![]() Today I was on a phone call with a German journalist about monopoly power, and he asked me a set of questions I receive fairly frequently. ![]() Here are four examples of the growth of market power during this pandemic and what they mean. Monopolization and consolidation can happen for what seem to be good, or least necessary, reasons. ![]()
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