An idea to encourage more more competition and less corporate concentration
sleepyrivertroll on
That’s an interesting way of putting antitrust laws into a tax proposal. I do wonder how politically feasible it would be.
Priceless_Pennies on
This populist conception of antitrust as a panacea to everything is one of the worst new strands of thought on the left.
It’s wrong in literally every way: it’s wrong about how much monopoly power there is, it’s wrong about how and how much monopoly power where it is present is causing negative effects, and it’s wrong about how to reach positive outcomes in places where monopoly power is resulting in a negative effect.
The article starts out by referencing housing costs, and difficulty getting employed as problems, but the main factor contributing to both rental and housing costs is not because of monopoly power on either the side of builder or on the side of rental companies; by far the largest contributor is simply lack of supply due to a) regulatory constraints, and b) more recently also due to financing difficulties. There was the realpage thing but in the broader picture that was pretty minor.
The regulatory constraints have predominantly been levied by grassroots movements by homeowners rather than corporations. Financing difficulties are due to tariffs and high interest rates. Tariffs were caused by Trump, and interest rates were due to previous inflation. You could argue Trump got elected due to inflation as well, so going back to inflation, the evidence strongly strongly suggests that inflation was due to supply chain issues from covid plus the large fiscal and monetary stimulus during the pandemic, not monopoly power that was known as the greedflation argument [https://www.sciencedirect.com/science/article/pii/S0165176525000011](https://www.sciencedirect.com/science/article/pii/S0165176525000011) [https://mattbruenig.com/2023/05/04/more-on-inflation-and-profits/](https://mattbruenig.com/2023/05/04/more-on-inflation-and-profits/) [https://xcancel.com/joseazar/status/1530204387146096640](https://xcancel.com/joseazar/status/1530204387146096640)
If anything, in home building, firms are too small, because the patchwork of regulations between different regions makes it hard for home builders to become more efficient by scaling.
With respect to jobs, I don’t even get the through line connecting them. Monopsony power primarily effects low income jobs, which is solved by raising minimum wage laws which has been done in many places, but that’s not about employment, but wages, and also the numbers for employment aren’t as bad as people say. The environment is low hiring low firing, and there are matching problems [https://www.theargumentmag.com/p/the-tinder-ization-of-the-job-market](https://www.theargumentmag.com/p/the-tinder-ization-of-the-job-market) which both make it seem worse than the topline numbers, but that’s not really related to anti-monopoly stuff.
The article then moves on to talking about the Tech industry and AI. AI is the opposite of monopolistic, it’s immensely competitive with OpenAI itself being a startup that surprise took out Google’s lead, and since then there has been strong competition between American (OpenAI, Anthropic, Google, and to a lesser extent Meta and xAI), European (Mistral), and Chinese (Deepseek, Qwen, Kimi) companies, where no company is able to keep a leading edge for more than a month or two and there is rapid competitions to make better models, as well as compete on price.
If we pivot to the search monopoly, AI actually was a huge disruptor to that, with AI usage for search, along with AI search companies like perplexity (who just got a deal to be on all samsung phones btw). If anything the anti-trust case against google actually hurt an adjacent area, browsers, where they have been actively subsidizing Firefox.
The places where tech companies have large concentration of power is largely due to natural monopolies, where the solution of breaking them up is ineffective. The ills of social media for example for instance would be better fixed by regulating things like usage by minors, algorithmic feeds, etc., they aren’t bad because they are big, the technology just has negative externalities, [https://www.theargumentmag.com/p/treat-big-tech-like-big-tobacco](https://www.theargumentmag.com/p/treat-big-tech-like-big-tobacco)
There’s simply very little evidence that corporate power concentration is at a concerning level or causing much if any harm to people in most cases.
In fact, there’s a lot of evidence that this obsession with antitrust is actively harmful, because some level of monpoly profits actually spurs investment and innovation (i.e. bell labs)
The most recent nobel in economics was literally about this, with Philippe Aghion and Peter Howitt creating a model that shows too much competitions prevents companies from investing in future innovation.
sulris on
The written explanation was convincing. But I lack the math chops to truly understand the details. Anyone here smarter than me willing to weigh in?
Vaccinated_An0n on
EFFORT-RESPONSE
After reading and thinking about this article, I have though of several counter arguments and critiques. Apart from the general “past is good, current is bad” intro paragraph, it also uses several misleading statistics. While the big tech companies might be on top at the moment, no company stays at the top forever. Throughout the years, the largest companies have of course changed and evolved as the economy grew. They might have originally been oil and steel companies before becoming Industrial giants and Tobacco companies which have now given way to the big tech companies. Whoever is on top now will not be on top in 20 years and simply Balkanizing whoever is on top simply because they are the largest right now simply incentivizes never growing to be on top.
Also there is no argument for why the Largest Companies contributing a significant portion of GDP is bad. Revenue of course is just the amount of money that has flowed through a company much the way GDP is the measure of the amount of money that has flowed through an economy and has no direct relation to profitability.
Somewhat misleading. The wealth of the tech billionaires is paper wealth that can never be fully unlocked. Most of this value is associated with shares of stock of which they could never fully divest at current market prices. While you can criticize the tech billionaires for their massive influence, saying big is bad is not really a supported argument.
Google is a big company, no one can deny that, but it didn’t get big in a vacuum. There were search engines that came before it like Yahoo and Ask Jeeves that Google beat out by simply being a better search engine. Since then there have been competitors like Bing, DuckDuckGo and Ecosia, yet all have been relegated to various internet niches for the simple reason that they are less good than Google. The thing about Big Tech is that it is strongly driven by network-effects. You want to be on the popular one because everyone is there. It’s the reason why MySpace died, why Facebook lived and why Twitter, Instagram and Reddit are still used despite there being more than a dozen half-baked clones. It also ignores the fact that Google Search and Google Ads are a symbiotic relationship where splitting the two destroys the value of both. Without the data from Google Search, targeted Ads can not be made.
Taxing revenue is also a god-awful idea for the simple reason that it would destroy low margin businesses. Grocery stores famously run on very slim margins and taxing revenue will force everyone to move upscale and fast. Say goodbye to brand name cereal and hello to Whole Foods pricing. There are many well know examples of government policies distorting the shape of companies. In India, companies can not lay employees off without government permission if they have more than 100 employees. This of course creates an incentive for companies to have only 99 employees. Other market distortions like this exist around the world and they all cause unnecessary inefficiency.
What benefit would there be to Balkanizing Walmart apart from some nebulous “stick it to the big guy”? Taking a large streamline company and arbitrarily breaking it up would create a lot of redundant overhead that would raise prices without improving services. Walmart is by no means a monopoly with competitors like Target, Costco, BJ’s, Kroger and others all with similar business models and offerings. The only way I can see someone supporting this is if they are funded by Big Target and doesn’t want to see people Save Money and Live Better.
The fetishization of small business is not beneficial. They provide worse services at higher prices. Telling people they have to turn a single Walmart trip into visiting three half-assed small businesses while paying 25% more is electoral suicide. Americans love cheap stuff way more than they like “buy local” propaganda.
Overall this argument really doesn’t work. It creates an incentive for companies to go upscale, while creating a low margin, high volume void. This void, of course, cannot be easily fixed through foreign labor and materials since it must be present domestically and therefore creates a problem. In addition to this, It assumes that all companies are equal. The oil and steel monopolies of yesteryear where products were interchangeable with each other might have been easier to break up, yet today’s tech-heavy social media giants are neither interchangeable nor all equals due to network effects and symbiotic relationships.
Also what is not explained is what all this new tax revenue would be used for. Time and time again, we have seem governments raise taxes and borrow money to fulfill nebulous social goals only for the goals to never be fulfilled and for the debt to grow. While taxes and government programs can work for the benefit of all, they must be implemented with a plan. **The State Budget of California has more than doubled since Arnold Schwarzenegger left office**, yet I doubt anyone would say that the average Californian is twice as well off. Collecting money in arbitrary ways, to fulfill nebulous goals, will simply lead to more waste, and inefficiency than there already is while creating more distrust in government and it’s ability to make constructive improvements to people’s lives.
We are Neoliberals. We need the market to help improve people’s lives, yet placing arbitrary restrictions on the market to fulfil nebulous goals while creating market inefficiencies is not the way.
5 Comments
An idea to encourage more more competition and less corporate concentration
That’s an interesting way of putting antitrust laws into a tax proposal. I do wonder how politically feasible it would be.
This populist conception of antitrust as a panacea to everything is one of the worst new strands of thought on the left.
It’s wrong in literally every way: it’s wrong about how much monopoly power there is, it’s wrong about how and how much monopoly power where it is present is causing negative effects, and it’s wrong about how to reach positive outcomes in places where monopoly power is resulting in a negative effect.
The article starts out by referencing housing costs, and difficulty getting employed as problems, but the main factor contributing to both rental and housing costs is not because of monopoly power on either the side of builder or on the side of rental companies; by far the largest contributor is simply lack of supply due to a) regulatory constraints, and b) more recently also due to financing difficulties. There was the realpage thing but in the broader picture that was pretty minor.
The regulatory constraints have predominantly been levied by grassroots movements by homeowners rather than corporations. Financing difficulties are due to tariffs and high interest rates. Tariffs were caused by Trump, and interest rates were due to previous inflation. You could argue Trump got elected due to inflation as well, so going back to inflation, the evidence strongly strongly suggests that inflation was due to supply chain issues from covid plus the large fiscal and monetary stimulus during the pandemic, not monopoly power that was known as the greedflation argument [https://www.sciencedirect.com/science/article/pii/S0165176525000011](https://www.sciencedirect.com/science/article/pii/S0165176525000011) [https://mattbruenig.com/2023/05/04/more-on-inflation-and-profits/](https://mattbruenig.com/2023/05/04/more-on-inflation-and-profits/) [https://xcancel.com/joseazar/status/1530204387146096640](https://xcancel.com/joseazar/status/1530204387146096640)
If anything, in home building, firms are too small, because the patchwork of regulations between different regions makes it hard for home builders to become more efficient by scaling.
With respect to jobs, I don’t even get the through line connecting them. Monopsony power primarily effects low income jobs, which is solved by raising minimum wage laws which has been done in many places, but that’s not about employment, but wages, and also the numbers for employment aren’t as bad as people say. The environment is low hiring low firing, and there are matching problems [https://www.theargumentmag.com/p/the-tinder-ization-of-the-job-market](https://www.theargumentmag.com/p/the-tinder-ization-of-the-job-market) which both make it seem worse than the topline numbers, but that’s not really related to anti-monopoly stuff.
The article then moves on to talking about the Tech industry and AI. AI is the opposite of monopolistic, it’s immensely competitive with OpenAI itself being a startup that surprise took out Google’s lead, and since then there has been strong competition between American (OpenAI, Anthropic, Google, and to a lesser extent Meta and xAI), European (Mistral), and Chinese (Deepseek, Qwen, Kimi) companies, where no company is able to keep a leading edge for more than a month or two and there is rapid competitions to make better models, as well as compete on price.
If we pivot to the search monopoly, AI actually was a huge disruptor to that, with AI usage for search, along with AI search companies like perplexity (who just got a deal to be on all samsung phones btw). If anything the anti-trust case against google actually hurt an adjacent area, browsers, where they have been actively subsidizing Firefox.
The places where tech companies have large concentration of power is largely due to natural monopolies, where the solution of breaking them up is ineffective. The ills of social media for example for instance would be better fixed by regulating things like usage by minors, algorithmic feeds, etc., they aren’t bad because they are big, the technology just has negative externalities, [https://www.theargumentmag.com/p/treat-big-tech-like-big-tobacco](https://www.theargumentmag.com/p/treat-big-tech-like-big-tobacco)
There’s simply very little evidence that corporate power concentration is at a concerning level or causing much if any harm to people in most cases.
[https://briancalbrecht.com/Albrecht_Decker_Markups.pdf](https://briancalbrecht.com/Albrecht_Decker_Markups.pdf)
In fact, there’s a lot of evidence that this obsession with antitrust is actively harmful, because some level of monpoly profits actually spurs investment and innovation (i.e. bell labs)
[https://pierpaolocreanza.github.io/website/creanza_jmp.pdf](https://pierpaolocreanza.github.io/website/creanza_jmp.pdf)
The most recent nobel in economics was literally about this, with Philippe Aghion and Peter Howitt creating a model that shows too much competitions prevents companies from investing in future innovation.
The written explanation was convincing. But I lack the math chops to truly understand the details. Anyone here smarter than me willing to weigh in?
EFFORT-RESPONSE
After reading and thinking about this article, I have though of several counter arguments and critiques. Apart from the general “past is good, current is bad” intro paragraph, it also uses several misleading statistics. While the big tech companies might be on top at the moment, no company stays at the top forever. Throughout the years, the largest companies have of course changed and evolved as the economy grew. They might have originally been oil and steel companies before becoming Industrial giants and Tobacco companies which have now given way to the big tech companies. Whoever is on top now will not be on top in 20 years and simply Balkanizing whoever is on top simply because they are the largest right now simply incentivizes never growing to be on top.
>Their unprecedented market share – with revenues totalling[ 15% of US GDP](https://fortune.com/2025/06/02/ceo-daily-fortune-500-americas-biggest-companies-by-revenue/)
Also there is no argument for why the Largest Companies contributing a significant portion of GDP is bad. Revenue of course is just the amount of money that has flowed through a company much the way GDP is the measure of the amount of money that has flowed through an economy and has no direct relation to profitability.
>Trump could assemble the owners of more than 1% of America’s wealth in one room for his inauguration is because that 1% was[ owned by just 10 men](https://theintercept.com/2025/01/20/trump-inauguration-billionaires-oligarchy-wealth-musk-bezos-zuckerberg/).
Somewhat misleading. The wealth of the tech billionaires is paper wealth that can never be fully unlocked. Most of this value is associated with shares of stock of which they could never fully divest at current market prices. While you can criticize the tech billionaires for their massive influence, saying big is bad is not really a supported argument.
Google is a big company, no one can deny that, but it didn’t get big in a vacuum. There were search engines that came before it like Yahoo and Ask Jeeves that Google beat out by simply being a better search engine. Since then there have been competitors like Bing, DuckDuckGo and Ecosia, yet all have been relegated to various internet niches for the simple reason that they are less good than Google. The thing about Big Tech is that it is strongly driven by network-effects. You want to be on the popular one because everyone is there. It’s the reason why MySpace died, why Facebook lived and why Twitter, Instagram and Reddit are still used despite there being more than a dozen half-baked clones. It also ignores the fact that Google Search and Google Ads are a symbiotic relationship where splitting the two destroys the value of both. Without the data from Google Search, targeted Ads can not be made.
Taxing revenue is also a god-awful idea for the simple reason that it would destroy low margin businesses. Grocery stores famously run on very slim margins and taxing revenue will force everyone to move upscale and fast. Say goodbye to brand name cereal and hello to Whole Foods pricing. There are many well know examples of government policies distorting the shape of companies. In India, companies can not lay employees off without government permission if they have more than 100 employees. This of course creates an incentive for companies to have only 99 employees. Other market distortions like this exist around the world and they all cause unnecessary inefficiency.
What benefit would there be to Balkanizing Walmart apart from some nebulous “stick it to the big guy”? Taking a large streamline company and arbitrarily breaking it up would create a lot of redundant overhead that would raise prices without improving services. Walmart is by no means a monopoly with competitors like Target, Costco, BJ’s, Kroger and others all with similar business models and offerings. The only way I can see someone supporting this is if they are funded by Big Target and doesn’t want to see people Save Money and Live Better.
The fetishization of small business is not beneficial. They provide worse services at higher prices. Telling people they have to turn a single Walmart trip into visiting three half-assed small businesses while paying 25% more is electoral suicide. Americans love cheap stuff way more than they like “buy local” propaganda.
Overall this argument really doesn’t work. It creates an incentive for companies to go upscale, while creating a low margin, high volume void. This void, of course, cannot be easily fixed through foreign labor and materials since it must be present domestically and therefore creates a problem. In addition to this, It assumes that all companies are equal. The oil and steel monopolies of yesteryear where products were interchangeable with each other might have been easier to break up, yet today’s tech-heavy social media giants are neither interchangeable nor all equals due to network effects and symbiotic relationships.
Also what is not explained is what all this new tax revenue would be used for. Time and time again, we have seem governments raise taxes and borrow money to fulfill nebulous social goals only for the goals to never be fulfilled and for the debt to grow. While taxes and government programs can work for the benefit of all, they must be implemented with a plan. **The State Budget of California has more than doubled since Arnold Schwarzenegger left office**, yet I doubt anyone would say that the average Californian is twice as well off. Collecting money in arbitrary ways, to fulfill nebulous goals, will simply lead to more waste, and inefficiency than there already is while creating more distrust in government and it’s ability to make constructive improvements to people’s lives.
We are Neoliberals. We need the market to help improve people’s lives, yet placing arbitrary restrictions on the market to fulfil nebulous goals while creating market inefficiencies is not the way.