Market Power and Inequality: The Antitrust Counterrevolution and its Discontents

Market Power and Inequality: The Antitrust Counterrevolution and its Discontents

Lina Khan (Yale University) &Sandeep Vaheesan (Independent)

Abstract:      One unexplored theme in the debate around economic inequality is the role of monopoly and oligopoly power. Despite the relative lack of attention to this topic, there is sound reason to believe that pervasive market power in the economy has contributed to extreme economic disparity in the United States today. Given the affluence of shareholders and executives compared to consumers in most markets as well as the power dynamics inside large corporations, market power, in general, can be expected to have significant regressive distributional effects. Case studies of anticompetitive practices and uncompetitive market structures in several key industries illustrate how large corporations have come to dominate the U.S. economy. On top of their market power, monopolistic and oligopolistic companies translate their economic power into political influence, often successfully pushing for laws and regulation that further enhance their clout and transfer wealth upwards. Pervasive market power in the economy, which appears to be contributing to economic inequality, is the result of an intellectual and political revolution in the 1980s that dramatically reoriented and narrowed the goals of antitrust law. Importantly, this counterrevolution can be reversed. We present a vision ofantitrust that accords with what Congress intended in enacting “this comprehensive charter of economic liberty” and offer specific policy prescriptions.