As Competition Flags, the Rip of Inequality Widens

A look at the long decline of competition in many American industries. It is a decline that stunts entrepreneurship, hinders workers’ mobility and slows productivity growth. Slowing this trend has emerged as a tempting new avenue to address the plight of a beleaguered working class. Reviving flagging American competition might even help stop America’s ever-widening inequality.

In April, President Barack Obama issued an executive order calling on government agencies to look for ways to bolster competition in the industries they monitor. Hillary Clinton drew competition into the campaign trail, chastising dominant corporations for “using their power to raise prices, limit choices for consumers, lower wages for workers and hold back competition from start-ups and small businesses.” And Senator Elizabeth Warren (D-MA) made headlines last month when she called for antitrust agencies to crack down on Silicon Valley powers like Apple, Facebook and Google. Monopoly rents — the excess returns a company reaps when it does not have to deal with pesky competitors keeping prices down — could worsen inequality in a variety of ways. Joseph Stiglitz, the Nobel laureate from Columbia University who served as top economic adviser to President Bill Clinton, has asserted that exorbitant corporate profits are being run up through oligopolies and passed along to stockholders, raising the share of national income accruing to the rich.