Who's most responsible for the monopolization of America?

[Doc Sportello]

From Robert Reich (with a chart showing that 97% of corporate assets are controlled by the top 1% of corporations):

snip

The social costs of corporate concentration are growing.

— The typical American household is paying more than $5,000 a year because corporations can raise their prices without fear that competitors will draw away consumers.

— Such corporate market power has also been a major force driving inflation.

— Huge corporations also suppress wages, because workers have fewer employers from whom to get better jobs.

— And corporate giants are also fueling massive flows of big money into politics (one of the major advantages of large size).

https://robertreich.substack.com/p/the-awful-legacy-of-robert-bork-corporations?utm_campaign=email-post&r=19zzl3&utm_source=substack&utm_medium=email

[multigraincracker]

1. A maximum wage that can only

rise as the minimum wage rises.

If that doesn’t work, Eat the Rich.

[Attilatheblond]

2. The Roberts Court played huge part in it via dark money allowed in politics

But, of course, that is why he was put on the court. And he got 'er done.

Deregulation, constantly lowering corporate taxes and oversight, starving IRS to the point that only the poor get tax laws enforced....

It's all dependent on which obedient pols get elected.

[Igel]

6. Consider the data presented.

By 2003 most of the "damage" was done. That's the year Roberts was appointed to a federal court, not SCOTUS.

The graphs stop at 2013 because the paper--free for accessing at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3936799, by the way--isn't a polemic. It just tries to be one.

It's ultimate take away is a disfavored conclusion masked by hopeful expectations:

Although the long-run trends align with stronger economies of scale, our results do not rule out
that some large firms may have expanded their territories by unduly exerting power and influence
(Cunningham, Ederer, and Ma, 2021; Kamepalli, Rajan, and Zingales, 2022). It is also possible that
regulatory policies or business environments have been more favorable to larger companies in recent
years (Philippon, 2019; Kroen et al., 2022); special features of a given era can coexist with long-run forces.
Finally, the welfare consequences of rising concentration are not obvious even if this development
comes from economies of scale. As Stigler (1958) writes in his article on “The Economies of Scale," “the
socially optimum firm is fundamentally an ethical concept, and we question neither its importance nor
its elusiveness."

In other words, stronger economies of scale account for most of the data. But in some cases, maybe undue power and influence were exerted. (Is that many or a handful? A decreasing or increasing number? "Some."

They don't like that regulatory policies recently--that's mostly pre-Trump, by the way--favor large companies. But this was noted 45 years ago. AT&T *liked* some regulations that hurt it because (1) it hurt its smaller rivals even more and (2) the regulations were things it was going to do have to do anyways to expand overseas, where its smaller competitions had no game.

As for "polemic," maybe we can find a way of making this unethical even if the economies of scale ultimately make for cheaper production. (Their data in no way supports Reich's $5000/consumer number, by the way.)

Now, something they *don't* talk about is "social mobility." It's easy to assume that the top 1% are and were always the top 1%, and that "assets" are physical because back in the 1920s they were, um, physical.

Towards the end service industries went from a few % to nearly 40% of the number of corporations. And "assets" weren't machines and land and materiel but often patents and investments. That means a lot of old-school corporations were de-1%-ed as service entities moved into that "space."

Another issue that was unaddressed in the paper that provided the data for Reich's charts was the skyrocketing number of corporations. 60 years ago corporations were "special." They were large and far fewer in number. Most smaller companies and all start-ups were just sole proprietorships, but that changed in the '80s and '90s. I worked for a corporation in 1998 that had a president, a VP, 4 employees, 2 of us part time, and was run out of the part of a house the owner didn't much use--that was the HQ, the "warehouse" and the "shipping office" (zoning be damned.) Because of connections there, I also worked for a corporation that consisted of 3 people, counting me. A CPA, her assistant, and me. Yup. Corporations, just like GM and Microsoft.

Note that start-ups also tend to have 0 net assets (since we don't want to include negative assets)--they take out loans against assets, right? Established, and esp. service industries, need fewer loans against physical assets.

[appalachiablue]

3. RR knows, thanks for posting.

K/R

[GenXer47]

4. we are - boycott everything

Somebody's buying their stuff!

[BlueIn_W_Pa]

5. This needs more attention

remember the egg and bacon price hikes during COVID?
corps: oh we don't have enough workers, so 50% reduced production is the result

then they triple prices, and still make out with huge profits with half the workers