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posted by janrinok on Tuesday November 12 2019, @09:03AM   Printer-friendly
from the what's-mine-is-mine-and-what's-yours-is-mine dept.

On 4 November 2019, Techcrunch published an interview with Thomas Philippon, author of the book The Great Reversal: How America Gave Up on Free Markets, where he discusses the diminution of competition in many US market sectors.

From the Techcrunch article:

Economist Thomas Philippon's new book, "The Great Reversal: How America Gave Up on Free Markets," went on sale this past week, highlighting the United States' failure to block the country's largest companies from inhibiting fair competition.

"The broad picture is that competition is good, but surprisingly fragile," he said. "In today's environment, the U.S. is moving from a place where it was at the forefront of having free markets that worked pretty well for most people to being a laggard in many industries."

Philippon's premise isn't exactly breaking news, but the interview and his book give some good background as to how we got where we are, and how other nations are addressing these issues more (in some cases, much more) effectively.

The deregulation of major U.S. industries like telecom and energy in the 1970s and 80s sparked competition that lowered consumer prices and drove product innovation between competitors. Europe, on the other hand, lagged behind with more expensive internet, phone plans, airline tickets, and more until around 2000 when a major reversal of this trend began. Strikingly, when the EU strengthened deregulation and antitrust efforts to open its markets to more competition, it was the U.S. that reversed course.

[...] Based on Organization for Economic Cooperation and Development (OECD) data, the U.S. now has more regulations for opening a new business than every EU country except Greece and Poland — a complete reversal since 1998, when only the UK had fewer rules than the U.S. Per capita GDP growth in the EU outpaced that of the U.S. over 1999-2017. On a purchasing power parity basis, Americans have experienced a 7% increase in prices (relative to EU residents) for the same goods, due specifically to increased profit margins of companies with reduced competition.

The reason for this divergence? According to Philippon, corporate incumbents in the U.S. gained outsized political influence and have used it to a) smother potential antitrust reviews and b) implement regulations that inhibit startups from competing against them. As a result, the U.S. regulatory system prioritizes the interests of incumbents at the expense of free market competition, he says.

What say you, Soylentils? Is competition truly dead in many sectors of the economy, or are there ways to bring it back and keep it?


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  • (Score: 1, Interesting) by Anonymous Coward on Tuesday November 12 2019, @09:01PM

    by Anonymous Coward on Tuesday November 12 2019, @09:01PM (#919547)

    Are you rich? I'm going to assume not. Most people aren't. I certainly am not. Yet nonetheless here we are communicating with each other, probably half way around the world from one another, using our nice computing machines that are magnitudes more powerful than that which sent men to the moon. And we're doing it using incredibly sophisticated and expensive equipment installed literally all around the world. And I look about my desk, multiple monitors, all sorts of nice tools imported all the way from across the sea. And it's pretty hot outside but I feel damn comfy thanks to this air conditioning that keeps me chill constantly. All of these tools and technologies are things people of the past could not even imagine - all obtained for a mostly negligible cost.

    My wife wanted a new desktop for herself. It's getting crazy how cheap stuff is. For $180 we got a new setup that's quite reasonable - plays GTA V smoothly even! And that included the monitor and all other necessities. No clue how there's a profit margin in there. That $180 included free shipping as well. By contrast, less than a century ago companies started putting elaborate and beautiful designs on feed and flour sacks. Pretty unusual. Why? Because we had so little that people were retrofitting feed sacks into home-made dresses. This wasn't just depression era stuff either.

    I think the problem is that the free market and nuclear deterrence has worked too well. Because we now live quite comfortable lives absent any real threat and with each passing year we generally become capable of acquiring ever more crap. The problem is that it's a completely pointless and empty existence when you do not move beyond that. "We" need an enemy, we need a cause, we need change. Imagine a Star Trek style utopia where there was minimal to no animosity and where, thanks to holodecks, you could be anyone, do anything, do anyone. What that really be a utopia? For the vast majority it'd likely be a year or two of heaven, followed by 80 years of hell til you die. There'd no doubt be a suicide epidemic because what would be the point of anything anymore...? Kind of a terrifying thought actually. The Great Filter of the Fermi Paradox might be finally reaching what we think we want.

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