“You Can Put the Monopoly Tiger in a Cage but You Cannot Transform a Tiger Into a Vegan” — TheMarket interviews Luigi G. Zingales

Even from a conservative point of view, the concentration of power at large tech companies is scary. As a true conservative, you’re afraid of the constitutional power in the government. Not because the government is evil per se, but because you don’t trust human nature and concentration of power. So if you have the same concentration of power in the private sector it doesn’t become fine all of a sudden. If anything, it becomes more dangerous. At least, we have ways to address the concentration of power in the public sector. In contrast, we have none in the private sector, especially with regard to such large companies like Google and Facebook where the control is in the hands of only three people because of the dual stock class structure. In the case of Google, they are Larry Page and Sergey Brin, at Facebook it’s Mark Zuckerberg....

How to deal with natural monopolies.

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
“You Can Put the Monopoly Tiger in a Cage but You Cannot Transform a Tiger Into a Vegan”

TheMarket interviews Luigi G. Zingales, professor of finance at the University of Chicago Booth School of Business

The trouble with capitalism — Chris Dillow

Are the faults of capitalism curable, or are they instead symptoms of a chronic disease? This is the question posed by Martin Wolf:

What we increasingly seem to have…is an unstable rentier capitalism, weakened competition, feeble productivity growth, high inequality and, not coincidentally, an increasingly degraded democracy.

There is much to admire in this piece. But I fear it understates the problem with capitalism....

Falling rate of profit?

Stumbling and Mumbling
The trouble with capitalism
Chris Dillow | Investors Chronicle

Zero Hedge — Barr And State AGs Discuss Big Tech Monopolies As 'Flipped' Facebook Co-Founder Helps Devise Antitrust Action

More anti-trust talk.

Zero Hedge
Barr And State AGs Discuss Big Tech Monopolies As 'Flipped' Facebook Co-Founder Helps Devise Antitrust Action
Tyler Durden

Reuters — Treasury's Mnuchin says Amazon 'destroyed' U.S. retail sector

“If you look at Amazon, although they’re certain benefits to it, they’ve destroyed the retail industry across the United States,” Mnuchin told CNBC. “I don’t have an opinion other than I think it’s absolutely right the attorney general is looking into these issues and I look forward to listening to his recommendations to the president.”

Are we finally going to start talking about anti-trust, which. incidentally, was at the heart of US progressivism historically.

Reuters
Treasury's Mnuchin says Amazon 'destroyed' U.S. retail sector

Laura Belin - New bill is “clear attempt by MidAmerican to monopolize the sun in Iowa”

A new bill backed by MidAmerican Energy would devastate the ability of Iowans to install solar panels for their homes or businesses. House Study Bill 185 would undo a longstanding policy of net metering, which “allows residential and commercial customers who generate their own electricity from solar power to feed electricity they do not use back into the grid.”

Iowans served by monopoly providers MidAmerican or Alliant Energy have been able to use net metering since the 1980s, under rules adopted by the Iowa Utilities Board.

In recent years, MidAmerican has periodically sought to subvert net metering in various ways. Environmental advocates have been concerned the policy would become the next target for Republican lawmakers who destroyed Iowa’s decades-old, successful energy-efficiency programs last year at the behest of utility companies.…

Disclosure: I am a resident of Iowa (Iowa City).

Bleeding Heartland
New bill is “clear attempt by MidAmerican to monopolize the sun in Iowa”
Laura Belin

ProMarket — Editors’ Briefing: This Week in Political Economy (November 11-18)

"Is monopolization threatening capitalism?" Facebook, Google, Amazon.

ProMarket
Editors’ Briefing: This Week in Political Economy (November 11-18)

Editors

EPI — It’s not just monopoly and monopsony: How market power has affected American wages

Report.

Economic Policy Institute
It’s not just monopoly and monopsony: How market power has affected American wages
Josh Bivens, Lawrence Mishel, and John Schmitt

See also

From Poverty to Power
The World Bank’s flagship report this year is on the future of work – here’s what the draft says

Duncan Green, strategic adviser for Oxfam GB

Simon Wren-Lewis — Neoliberalism: How Seeing Markets as Perfect Turned into an Ideology Justifying Crony Capitalism

That idea, that the market ensures that only the most efficient prosper, is a central message of neoliberal ideology, and it has held UK and US governments under its sway since the time of Thatcher and Reagan. But that ideology contains a large and deep internal contradiction, which applies particularly to large firms like Carillion. To see what that contraction is, we need to talk about ordoliberalism and Ronald Coase.

Ordoliberalism is widely known as the German version of neoliberalism. It too celebrates the benefits of the market. It, like neoliberalism, ignores many of the failures of markets that Colin Crouch eloquently outlines and which economists spend a lot of time studying. But ordoliberalism does recognise one potential problem with their market ideal which neoliberalism ignores, and that is monopoly. Crouch makes a similar distinction in talking about market-neoliberals and corporate-neoliberals.

Asymmetrical powers enable rent extraction.

One of the paradoxes of liberalism is that limiting the power of government limits corruption. But corruption is not limited to people in government. As Adam Smith observed, business people have not only an incentive to collude but also a tendency toward it if not restrained.

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. — The Wealth of Nations 1.10.82

Freedom entails responsibility, and responsibility depends on accountability.

Evonomics

Neoliberalism: How Seeing Markets as Perfect Turned into an Ideology Justifying Crony Capitalism
Simon Wren-Lewis | Professor of Economics, Oxford University

Branko Milanovic — Schumpeter’s two theories of imperialism

Schumpeter’s theory is interesting for several reasons. It was formulated at the same time as Lenin’s and Luxemburg’s and clearly with the knowledge of the two. It reacts to the exactly the same events as theirs. It is different though and it was held by Schumpeter throughout his life. The key text for Schumpeter’s theory is “The sociology of imperialisms” (note the plural) published in 1918-19. It is a very long essay of some tightly printed 80 pages in its English translation. Schumpeter did not change anything (of substance at least) to the theory as can be seen from its brief reappearance in his “Capitalism, socialism and democracy” (CSD), published in 1942 (and republished many times since).

What Schumpeter says is the following....

Global Inequality
Schumpeter’s two theories of imperialism
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace

Livia Gershon — The Different Meanings of Monopoly

The history of the board game.

JSTOR Daily

The Different Meanings of Monopoly
Livia Gershon

Douglas A. Irwin — Stigler on Monopolies: “Competition is a Tough Weed, Not a Delicate Flower”

Many of Stigler’s views on monopoly and antitrust were consistent through the decades. Even after his concerns of monopoly began to recede, he continued to believe that monopolies and oligopolies were still prevalent in the American economy and that they “should be a source of serious concern for public policy.”...

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
Stigler on Monopolies: “Competition is a Tough Weed, Not a Delicate Flower”
Douglas A. Irwin | John French Professor of Economics in the Social Sciences in the Department of Economics at Dartmouth College and Visiting Professor at The University of Chicago Booth School of Business

Matt Stoller — How to Educate Yourself on Monopoly Power

Bibliography.

Medium — Matt Stoller
How to Educate Yourself on Monopoly Power

Matt Stoller

ht Lambert Strether at Naked Capitalism

Noah Smith — Bust Up America's Monopolies Before They Do More Harm

Economists have been sounding the alarm about this trend for a while now. John Kwoka, an economist at Northeastern University, has literally written the book on the follies of the modern age of antitrust. In a new report, he shows how much more complacent the government has gotten toward oligopolies. The government still doesn’t tend to let a single company dominate any industry, but it’s usually fine with just five or six. Kwoka traces the change in attitudes to the rise of the so-called Chicago school approach to antitrust policy:

Bloomberg View
Bust Up America's Monopolies Before They Do More Harm
Noah Smith, contributor

Joel Kotkin — Amazon Eats Up Whole Foods As The New Masters Of The Universe Plunder America

“We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” —Justice Louis Brandeis

The rise of monopoly, monopsony, oligarchy, plutonomy, and government capture, spelling the death of a moribund republic in which corruption at the top has been legalized in the name of the "free market," which supposedly is a necessary condition for democracy.

A problem with late-stage capitalism is the economies of scale leads to concentration of capital in the hands of fewer and fewer, reducing competition, while a foundation assumption of a free market system is perfect competition. Owing to this internal contradiction, capitalism destroys itself and turns into corporate statism. Neoliberalism is a political theory of global corporate totalitarianism.

New Geography

Amazon Eats Up Whole Foods As The New Masters Of The Universe Plunder America

Joel Kotkin | executive editor of NewGeography.com, Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University. and executive director of the Houston-based Center for Opportunity Urbanism

Matt Stoller — America’s Amazon Problem

The objective of the tech industry is monopolization. The answer to it is anti-trust legislation and strict enforcement.

There is only one force that can stop Amazon from organizing and regulating basically all American retail commerce — our democratic institutions and our political system. We the people.

Bezos knows Amazon is a political enterprise at this point. The day before he announced his company’s attempt to buy this supermarket chain, he released a request on Twitter to have people offer ideas for where he can direct charity money. That is the kind of public relations undertaken by political leaders. And Amazon put out an ad for a Ph.D. economist-cum-lobbyist “to educate regulators and policy makers about the fundamentally procompetitive focus of Amazon’s businesses.” And he has put political fixers, like Ivanka Trump’s lawyer and ex-Clinton administration officer Jamie Gorelick, on his board of directors. He also bought The Washington Post.

However, Amazon is not the only offender.

The tech industry is not only disruptive technology but it is presenting fresh challenges to regulation in the public interest.

On the other hand, other companies are not going to rollover. Walmart is already awakening to the threat that Amazon poses for their business model. But thus far, Walmart has not developed a competitive tech game to challenge or even hold off Amazon.

Meanwhile, Sears is reeling on the ropes.

But Montgomery Ward (Wards.com) is trying to make a comeback.

Huffington Post
America’s Amazon Problem

Matt Stoller | Fellow at the Open Markets program, New America Foundation

Maciej Cegłowski — Notes From An Emergency

Weekend reading. On tech feudalism as a key challenge of the digital era that is emerging. How to deal with it before it deals with us.

Idle Words
Notes From An Emergency

Maciej Cegłowski

ht Yves Smith at Naked Capitalism

Ariel Ezrachi and Maurice Stucke —

In a series of papers published in the last two years, Ezrachi and Stucke explored the world of big data and artificial intelligence and argued that network effects can raise barriers to entry, enabling big platforms to engage in behaviors such as collusion, tacit collusion, and price discrimination, to the detriment of consumers. Their recent book Virtual Competition (Harvard University Press, 2016) explores the changing nature of competition in the age of big data and algorithms.

In a brief interview with ProMarket, Ezrachi and Stucke shared some thoughts on market power and the digital economy.... 

ProMarket
“Our New Economy Enables the Winners to Capture Much More of the Welfare”

Ariel Ezrachi, Slaughter and May Professor of Competition Law, a Fellow of Pembroke College, Oxford, and Director of the University of Oxford Centre for Competition Law and Policy; and Maurice Stucke, a co-founder of the law firm the Konkurrenz Group and law professor at the University of Tennessee

Matt Stoller — Monopoly Is the Problem UNDERLYING “Fake News”

Tweet srorm by Matt Stoller on fake news and media power.

Washington's Blog
Monopoly Is the Problem UNDERLYING “Fake News”
WashingtonsBlog

James A. Schmitz, Jr. — The Costs of Monopoly: A New View

Neoclassical economists dismiss monopoly as of insignificant consequence in modern economies. Not so, says this study.

Contrary to conventional wisdom, monopolies inflict substantial economic harm, particularly on the poor.

FRB Minneapolis
The Costs of Monopoly: A New View
James A. Schmitz, Jr. | Senior Research Economist
ht Mark Thoma at Economist's View

Beverly Mann — Phil Ebersole: Monopoly power and what to do about it

Phil Ebersole: The solution to this problem, [Elizabeth] Warren said, is simply to enforce the anti-trust laws as originally written.

The reason that they aren’t is a neoliberal philosophy of business regulation that took hold in the late 1970s, which held that the most important thing was not competition, but business efficiency. If Amazon can serve customers more efficiently that a local bookstore, then, according to this idea, there was no reason for the local bookstore to exist.

That could be true only if Amazon, Wal-Mart, Comcast and other big corporations were owned and operated by altruists, who passed along the gains in economic efficiency to customers, workers, suppliers and the local community.

But even when consolidation produces economic efficiency that benefits consumers, economic efficiency isn’t everything. Concentration of economic power means concentration of political power, which results in the kind of dysfunctional economic system we have now.…

Monopoly power = monopoly rent

Monopoly rent is one of the chief forms of rent along with profit as surplus value, land rent, and  financial rent.

Rent extraction is based on market power and market power is based on political power.

Somewhat ironically, government is both a source of political influence that enable special interests to garner market power and also a level of power through all, such as anti-trust, regulation, such as the which controls negative externality, and public goods and public utilities that provide goods that are more effectively and efficiently provided publicly than privately.

Beverly Mann: This movement, our movement, which began in the fall of 2011 with Occupy Wall Street, is on track to cause a political and economic earthquake.

Angry Bear
Monopoly power and what to do about it

Beverly Mann

See also

The Irish Review
Markets and states are complements

Kevin O'Rourke

ht Brad DeLong

Monthly Review
Monopoly Capital at the Half-Century Mark
John Bellamy Foster