Monopolies shrinking competition in American economy
John Kwoka, a distinguished professor at the Northeastern University has pieced together a powerful story of a depressing trend. Over the last two decades, the number of major airlines has shrunk from seven to four. In that same time, the eight big accounting firms have been consolidated down to four. Where there used to be eight or nine rivals in the car-rental business, there are now only three. There are two surviving pharmacy chains, two dominant mattress manufacturers, two colossal brewers. Competition has been declining throughout the country as conglomerates have grown more powerful. The snowballing trend of higher prices for lesser goods and services has been fed by administrations from both parties.
A monopoly is a kind of structure that exists when one company or supplier produces and sells a product. If there is a monopoly in a single market with no other substitutes, it becomes a “pure monopoly”. Monopolies came to the United States with the colonial administration. The large-scale public works needed to make the New World hospitable to Old World immigrants which required large companies to carry them out. A monopoly is characterized by a lack of competition, which can mean higher prices and inferior products.
The tech giants like Microsoft, Amazon, Apple – have acquired more than 600 companies over the last 20 years. They’ve eliminated current competitors and snuffed out future rivals who might have mounted a challenge to their empires. Kwoka provides a solution which is to return to the oversight of the previous millennium. Here, the burden of proof was on companies to show that their proposed mergers would not hurt competition.