Why America gave up on Free Markets

Economist Philippon uses detailed evidence to argue that  far from being the home of the free market competition, the US today has less competition than the much maligned EU, particularly in its products markets which are riddled with monopoly and monopsony. Declining competition has raised profits, depressed wages, weakened investment and undermined productivity growth. The US needs a reinvigoration of antitrust.

The many problem s of the American economy are due not to the flaws of capitalism or the inevitabilities of globalisation but to the concentration of corporate power. By lobbying against competition, the biggest firms drive their profit s higher.

Sector after economic sector is more concentrated than it was twenty years ago, dominated by fewer and bigger players who lobby politicians aggressively to protect and expand their profit margins. Europe  long dimissed for competitive scierosis and weak anti-trust is beating America at its own game.

Philippon, one of the world’s leading financial economists, did not expect these conclusionsin the age of Silicon Valley startups and millennial millionaires.

Phillippon works out the basic facts and consequences of industry concentration in the US and Europe shows how lobbying and campaign contributions have defanged anti-trust regulators and considers what all this means for free trade, technology and innovation.  He summarises for the sake of Americans, the American government needs to return to what  it once did best : keeping the playing field level for competition and it is time to make American markets great and free again.

 

The Great Reversal: How America Gave Up on Free Markets by Thomas Philippon  Belknap Press $23/ £29.95