By William A. Galston and Clara Hendrickson – Our paper, “A policy at peace with itself: Antitrust remedies for our concentrated, uncompetitive economy,” shows why antitrust has become an object of public concern and documents the urgent need to reform antitrust enforcement, which has failed, in recent years, to stem rising concentration and prevent declining competition.
Not only are today’s firms astoundingly profitable, they are persistently profitable. While a profitable American firm in the 1990s had a 50 percent chance of finding itself similarly successful 10 years on, a very profitable American firm today enjoys over an 80 percent chance.
That persistently high profits remain unchallenged suggests many firms may be receiving a return on market power.
Under-enforcement has harmed consumers as many mergers have led to higher prices. Declining competition has also resulted in rising inequality as inter-firm earnings disparities deepen the economic divide among workers. more>