Oh Yes, American Industries Are Much More Concentrated Than They Used to Be

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Tyler Cowen is skeptical that there are very many sectors of the US economy that have become more concentrated:

Or ask yourself a simple question — in how many sectors of the American economy do I, as a consumer, feel that concentration has gone up and real choice has gone down? Hospitals, yes. Cable TV? Sort of, but keep in mind that program quality and choice wasn’t available at all not too long ago. What else? There are Dollar Stores, Wal-Mart, Amazon, eBay, and used goods on the internet. Government schools. Hospitals. Government. Did I mention government?

This is very un-Tylerlike. Off the top of my head, here are a dozen more:

  1. Airlines
  2. National accounting firms
  3. Telephone companies
  4. Search engines
  5. Household appliances
  6. Drugstores
  7. Health insurance companies
  8. Banks
  9. Hardware stores
  10. Bookstores
  11. Beer
  12. Supermarkets

Note that high concentrations don’t necessarily mean less consumer choice. Amazon has wiped out nearly the entire bookstore industry, but my choice of books from Amazon alone is probably better than my choice from all my local bookstores combined two decades ago. The problem with highly concentrated industries is that they have too much pricing power; they inhibit innovation; and they wield too much influence over policymaking. Consumer choice is a red herring, and the sooner we focus our attention on other aspects of oligopoly the better off we’ll be.

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Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

payment methods

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