Consolidation is also favored by cheap money (yes, back to money monopoly thingy). Above some threshold and especially if you are in good relations with a bank, it is far easier to buy your competitors and dismantle them by selling their assets than to compete with them. It's ironic how in the failed communist centralized economies, the economic policy was dictated by "elected" nomenklatura and it was BAD, while in the "free/democratic" market economies the control is held by unaccountable private banks and nobody worries much.
This opinion piece articulates something I've felt for a long time... consolidation is the biggest problem in America right now, scratch that, in the World.<p>One thing that I can't comprehend is how right-wing free-market ideologues can get behind all the consolidation. Cant they see that consolidation is just like communism?<p>Only a competitive market with many players can ensure progress continues.
I have a different take on this article than most. I'm a proponent of Classical economics, and I reject all modern schools of economics--neoclassical, Austrian, Keynesian, etc.<p>Classical thinkers like Adam Smith expounded how rational self-interest <i>and</i> competition together lead to economic prosperity. There's a balancing act going on between self-interest and competition--competition is the economic faculty that <i>restrains</i> self-interest.<p>Only in perfect competition do we get <i>Pareto efficiency</i>--the state in which it is impossible to make any one individual better off without making at least one individual worse off.<p>Unfortunately, modern schools of economics have diminished the role of competition. Keynesianism lauds government monopoly power; while neoclassicism and Austrianism foster private monopoly power. Both are <i>evil</i>. The result has been a state of affairs wherein the vast majority of people are getting worse off.<p>WRT government intervention in the markets, Adam Smith would not oppose intervention that fosters competition and stifles monopoly. The goal of the 1890 Sherman Anti-Trust Act was to foster competition, not to diminish "economic freedom."<p>"Economic freedom" is a mostly meaningless buzzword that's thrown around by both libertarians and socialists. Indices of "economic freedom" as compiled by the Heritage Foundation and the Wall Street Journal serve no other purpose than propaganda.<p>It's impossible to divorce politics from economics in the real world. Adam Smith understood this. The subject used to be called "politico-economics."<p>Today, the Left favors reforms to give government more monopoly power. While the Right favors reforms that give firms more monopoly power. Until people start to wake up and realize all monopoly power is evil and what we need instead is more competition, things will continue to decline.
Hospitals by their very nature are anti-competitive. There is no way that you as a patient can shop around. You do not have the necessary knowledge to compare the treatments, evaluate the options and decide on what represents the best value.
I am pleased to see that all of the comments up to now deal with the "uncompetitive" aspect of the article and none with the "unequal" aspect. Indeed, it seems to me that "inequality" (the word appears 9 times in the article) was thrown in after the fact to decorate a piece about the adverse effects of monopoly, because post-Piketti it's stylish to talk about inequality. These aren't the same subject; the discussion of inequality is focused on person fortunes, not industrial domination. The former doesn't require the latter.