Powerless: How Lax Antitrust and Concentrated Market Power Rig the Economy Against American Workers, Consumers, and Communities

By Marshall Steinbaum, Eric Harris Bernstein, John Sturm |

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As workers, as consumers, and as citizens, Americans are increasingly powerless in today’s economy. A 40-year assault on antitrust and competition policy—the laws and regulations meant to guard against the concentration of power in private hands—has tipped the economy in favor of powerful corporations and their shareholders. Under the false assumption that the unencumbered ambitions of private business will align with the public good, the pro-monopoly policies of the “Chicago School” of antitrust lurk behind today’s troubling trends: high profits, low corporate investment, rising markups, low wages, declining entrepreneurship, and lack of access to unbiased information. Market power and lax competition policy ensure our economy serves the few over the many.

In a new report, Marshall Steinbaum, Eric Harris Bernstein, John Sturm build on the growing progressive consensus that the economic threat of market power goes far beyond prices. The paper demonstrates the disastrous consequences that unrestrained market power has had on workers, communities, and democracy.

The authors begin by explaining the dangers of market power and the role of competition policy in maintaining a level playing field. They then outline how lax competition policy has handed incumbent corporations and their shareholders an unfair advantage and a more generous slice of the economic pie. They document the consolidation and exploitation of market power that has occurred in this environment and highlight key pieces of evidence that illustrate how weak competition is harming the economy—holding back new businesses, investment, wages, and growth. The subsequent section reviews recent research that shows how concentrated corporate power impacts the everyday lives of Americans, surveying these effects through three lenses: the effects on consumers, on workers, and on society at large. In the final section, the authors propose policy remedies that could help rebuild inclusive growth, foster economic innovation, and restore an equitable economy that serves all of its stakeholders.

Download the Powerless issue brief
Download the Powerless issue brief on race
Download the Powerless issue brief on workers
Download the Powerless issue brief on small business

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Marshall Steinbaum is a Fellow and Research Director at the Roosevelt Institute, where he researches market power and inequality. He works on tax policy, antitrust and competition policy, and the labor market, in particular declining entrepreneurship and labor mobility as well as credentialization and its result: the student debt crisis. He is a co-editor of After Piketty: The Agenda for Economics and Inequality (Harvard University Press 2017), and his work has appeared in Democracy, Boston Review, New Republic, American Prospect, Industrial and Labor Relations Review, and ProMarket. He has a Ph.D. in economics from the University of Chicago.

John Sturm is a PhD student in economics at MIT, focusing on economic theory and systemic risk in economic networks. He previously worked as a Research Associate at the Roosevelt Institute, conducting empirical analyses of market power and monetary policy, and as a Research Assistant for Roosevelt Chief Economist Joseph E. Stiglitz at Columbia University. Sturm holds an MPhil in economics from the University of Cambridge and a BA in physics and math from Harvard University.