January 27, 2020
Free market capitalism can’t work without competition. And competition is suppressed.
Competition motivates companies to produce their best at the lowest prices and gives consumers choice. Instead of nurturing competition, our government stifles it with cronyism and lobbyist-influenced legislation.
American consumers clearly have fewer choices. In many industries, it’s 3-4 competitors at most. That’s not competition, that’s control by a few. Since the early 1980’s, market concentration has increased relentlessly.
Airline mergers have made it so there are only a handful of major players.
Two corporations control 98 percent of all beer consumed in the U.S.
Five banks control half the nation’s banking assets.
In many states, two health insurers combine to own 80-90 percent of the market.
Almost all high-speed internet markets are local monopolies.
Four companies control the entire U.S. beef market and they’ve chopped up the country to keep it that way.
After mergers last year, three companies control 70 percent of the pesticide market and 80 percent of the corn seed market.
Such dominance knows no end and gets worse when it comes to technology.
Google owns 90 percent of the search market. Facebook owns 80 percent of the social media market.
Both have a duopoly when it comes to online advertising. Worse, they’re operating with little regulation or competition.
Plus, Amazon is crushing retailers. It’s also the dominant e-commerce seller and third-party selling platform – a conflict of interest that allows it to determine what is sold and kill any competitors.
There are more examples, all suggesting markets are more concentrated than decades ago.
What do we do about it?
Strong policy is the best countermeasure. But good luck with that in 2020 and beyond. We’ll continue down the same path unless we can compromise. But that doesn’t seem possible today.