Tuesday Morning Links

This and that for your Tuesday reading.

- Noah Smith makes the case for the U.S. Democrats to emphasize trust-busting as a means of restoring power to people rather than the business lobby:

Big companies often argue that mergers will allow increased economies of scale, whose efficiencies will more than cancel out any price rise from increased market power. Corporate acquirers hire expensive consultants to make that case to regulators -- the Chicago school means big money for economists willing to theorize that bigger equals better. But that idea runs counter to the basic theory of market power, which warns that when companies get dominant enough in their industry they raise prices and cut production. That tends to hurt economic efficiency, while simultaneously gouging consumers.

Evidence is piling up that the basic econ theory holds true more often than not. Economists Bruce Blonigen and Justin Pierce, for example, found that mergers tend to increase prices and profits without boosting productivity. In an era where outsourcing to low-cost countries has held prices down for many consumer goods, most Americans may not notice the creeping effects of oligopoly, but they are there nonetheless.

And economists are also starting to realize that industrial concentration may harm the economy in other ways as well. The Democrats’ new plan recognizes that big dominant companies may act not just as monopolists but as monopsonists as well, squeezing suppliers while increasing inefficiency. And research by top labor economists suggests that the profits of quasi-monopolists come out of the pockets of American workers in the form of stagnant or falling wages. The rise of big market players may even play a role in the declining rate of startup formation. Industrial concentration, in other words, might be one of the big culprits in U.S. economic sclerosis.

So it’s good that Democrats are trying to resurrect Teddy Roosevelt’s trust-busting crusade. The trend toward big dominant companies has been allowed to go on too long. A more competitive, dynamic economy would benefit American consumers, workers and small businesses alike.

- Meanwhile, David Penado interviews Ann Pettifor about the political power held by bankers rather than voters. And John Light exposes the Republicans' attempt to prevent authorities from enforcing what few laws still limit the influence of secret corporate money in U.S. politics.

- Kate Aronoff interviews Naomi Klein about the dangers of politics based on corporate branding rather than movement-building, while Bernd Riexinger writes about the importance of connective political parties. And Ian Welsh discusses the dangers of trying to rely on people's vices to shape incentives, rather than treating people with kindness and respect.

- Finally, Katharine Schmidt and Michael Maidment write that food banks are taking over the function of providing social supports which should be guaranteed by government. And the Star's editorial board laments the fact that Ontario's supposed plan toward improved accessibility has gone dark - both in terms of accomplishing little, and preventing advocates from seeking out information.