Monopolists Hit a Wall in Local Markets
As industries grow more concentrated nationwide, the opposite is happening in towns and cities.
That was then.
Photographer: Boris Spremo/Toronto Star/Getty Images
When both experts and the general public think about monopoly power, they tend to think of huge companies dominating a nationwide market — like Standard Oil or Bell Telephone. Those companies were the subject of two of the most spectacular and high-profile antitrust cases in U. S. history. Right now, much of the talk of high-profile antitrust action centers around huge technology companies like Amazon.com and Facebook that claim large national market shares. And controversial mega-mergers, like the proposed AT&T takeover of Time Warner, tend to involve companies that are nationally prominent.
Much of economists’ research, too, has been focused on the nationwide level. A number of recent papers sounding the alarm about increased industrial concentration, rising price markups and profits, and falling corporate investment have all looked at on aggregate trends. For example, a 2017 paper by David Autor, David Dorn, Lawrence Katz, Christina Patterson and John Van Reenen received a lot of attention for finding a correlation between the degree to which a U.S. industry has become more concentrated in recent years and the degree to which labor’s share of income in that industry has fallen. They show increasing concentration in most industries: