UN Study Warns: Growing Economic Concentration Leads to “Rentier Capitalism”

As a Republican elected official in a southeastern state, I have a front-row seat to what this article points at.<p>The road construction industry used to be a great opportunity for small business people to create for themselves a substantial income. These days, all the companies in our area are owned by conglomerates, backed by billion dollar financial institutions. If you were to risk a million or two or an asphalt plant, they will undercut your prices till you go bankrupt, then inflate their prices once again. The two companies in our area will bid on all of our projects, but it&#x27;s clear they are in cahoots when it comes to their pricing.<p>By our estimates, the taxpayers are overpaying by at least 15% - 20%. In my mind, this robs others of opportunity and transfers wealth from tax-paying citizens to billion dollar companies.<p>No one points this out because the road builders give a lot to politicians. Go against them, and they&#x27;ll spend enough to have the public label you a RINO which, in this neck of the woods, can get you booted from office.<p>I&#x27;ve wished for some time that someone could create a modular asphalt plant that can be packed up on trucks and taken to wherever the job site is. I think companies like this could help regulate prices and make a lot of money.

This reminds me of a book called Four Futures, that explores different economic futures that humanity might face, and it just so happens that one of those futures is Rentism, similar to what is described in this piece.

The article is very hand-wavy about the core rent seeking argument. There is much discussion about factors such as productivity improvements concentration of market power and mergers and acquisitions.<p>From TFA: &quot;says Blankenburg, “the data show very clearly that the means used to obtain these profits cannot be reduced to the use of productive technologies.” Other mechanisms, such as lobbying or mergers and acquisitions, the authors find, have played a significant role in enhancing the market power of dominant companies. “You can show quite clearly how surplus profits increase with mergers and acquisitions, or how changes in regulation that favor control over intellectual property rights for large corporations have a pretty-instant impact on the profit performance of those companies,&quot;<p>That&#x27;s the sum total of the rent seeking argument. There is nothing in there demonstrating use of IP to extract rent (which, arguably isn&#x27;t even rent seeking behaviour, but for the sake of argument may be granted here). My intuition is that profit extraction due to IP for the very large companies is most obvious in pharmaceuticals, but that&#x27;s just my guess?<p>There are a few interesting points in this article, but it&#x27;s weakly written.

This is a super interesting. 2 interesting bits of history I feel people need to consider on this topic;<p>Firstly in my limited discussions I&#x27;m surprised how many people fail to recognise economic equality the west see&#x27;s today is not normal. It&#x27;s a ~70 year blip in 5,000 years of history that was heavily manufactured to be this way. Not a result of &#x27;capitalism&#x27; as many people I&#x27;ve seen discussing this like to say. As 50 years ago most western countries had more government managed economies than today.<p>And more interestingly, I wonder how society will react under democracy assuming we move to the historic norm of increased wealth inequality. As democracy in terms of masses having the vote is only about 100 years old. Less for other non-white backgrounds. As before this voting was restricted to land owners and men.<p>Anyway I would think democracy would act as a pressure value but maybe not. Have a look at this list for how things played out over the years;<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Timeline_of_labor_issues_and_events" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Timeline_of_labor_issues_and_e...</a>

Why isn&#x27;t the conclusion that the political systems are too powerful then? Regulatory capture and IP issues are the fault of a political system that can wield too much power.<p>The limited government people would seem to have a strong case that power should be removed from the political system since it is so easily corrupted.<p>I don&#x27;t quite understand how the answer to a political system easily manipulated is to make it even more powerful.

Maybe . . . It&#x27;s not intellectual property that keeps internet companies at the top of the pile, for the most part, unless we are counting trade secrets and domain names as intellectual property (and they are in a sense, but not the sense that requires a government to create an artificial market for them).

Pretty much the premise of Thomas Piketty&#x27;s &quot;Capital in the Twenty-First Century&quot;...

I think this phenomenon is visible in the reaction that large corporations have to disruptive technologies or ideas. Take the music industry&#x27;s reaction to efficient audio compression formats like MP3: to pretend they didn&#x27;t exist and&#x2F;or sue people who used them. There also seems to be a whiff of this in the telecom industry&#x27;s aggressive pursuit of anti-net-neutrality legislation. In both cases, there are large industries or entities (with lots of inertia) that have enjoyed a long stretch of dominance and profitability. Then, they&#x27;re challenged by an idea or technology. However, they&#x27;d prefer to simply keep making money in the same way they always have. Therefore, their reaction is not to adapt their business model, but to try to kill the technology or idea.

No wonder it&#x27;s so hard to roll back all the copyright garbage that accumulated in the various laws.