Let competition solve the problem

From Growing Oligopolies, Prices, Output, and Productivity by Tyler Cowen.  He is actually reporting on gated research by Sharat Ganapati.  From the Abstract:

American industries have grown more concentrated over the last 40 years. In the absence of productivity innovation, this should lead to price hikes and output reductions, decreasing consumer welfare. With US census data from 1972 to 2012, I use price data to disentangle revenue from output. Industry-level estimates show that concentration increases are positively correlated to productivity and real output growth, uncorrelated with price changes and overall payroll, and negatively correlated with labor’s revenue share. I rationalize these results in a simple model of competition. Productive industries (with growing oligopolists) expand real output and hold down prices, raising consumer welfare, while maintaining or reducing their workforces, lowering labor’s share of output.

The example I always think about in this regard is WalMart.  For all that there is undue class derogation of WalMart in some circles, its growth in the 1990s was responsible for a significant improvement in household income among the bottom 40% (and really everyone, but perhaps most notable for the bottom 40%).  WalMarts success in the 1990s was among the most beneficial social welfare policies of that era, even though not a social welfare policy.

The other point in the Abstract is that it is always about productivity.  Fairness, and market concentration, and equity, and disproportionate impact, are all well and good.  But without productivity growth there is no improvement.

Cowen pleads:

please do not split up America’s best and most productive firms.

And I agree.  I am materially concerned about the concentration of power in the Tech sector and particularly the misalignment between the culture and values of the Tech sector and the culture and values of the citizens of the country but I think we simply cannot understand the complexity of the interrelated systems well enough to reliably improve outcomes.  We have to wait for the emergent competition to displace the old behemoths with new, more customer aligned, entities.  It always happens.

Just not in the time frame we would prefer.