Economics and narratives

Flim flam from economists

the sleight of hand neoclassical economists and their legal allies performed in getting courts to buy off on a definition of “efficiency” for the purposes of evaluating mergers that is not seen as valid in the economics discipline generally.

Numerous economists have noticed the dramatic increase in monopoly profits accruing to US firms since 1980. As one example, a recent review of this literature and an updated measure of wealth generated from market power in the United States from 1870 to 2010 can be found in the new book by Mordecai Kurz. The impact of unchecked market power has contributed to an increase in inequality, has helped reduce investment and growth, and is a factor in harming democracy. Joseph Stiglitz makes the case for how rising market power and concentration have contributed to income inequality. Thomas Phillipon shows how rising market power has undermined investment and growth. Robert Landehas recently argued that the rise of powerful firms is a factor in undermining democracy. As Louis Brandeis reportedly quipped: “We may have democracy, or we may have wealth concentrated in a few hands, but we can’t have both.”