Antitrust and Competition

Antitrust and Labor

Does antitrust have a labor market problem? The last few years have seen growing interest among academic scholars in the causes and effects of concentration in US labor markets. Concurrently (and not unrelated), there has been an explosion of interest among policymakers and the general public in the impact that firms with market power may have on wages and working conditions. What do the data say regarding employer concentration and its effect on workers? Is antitrust in its current form equipped to address issues related to labor market power? In an attempt to answer these questions and more, we have decided to launch a series of articles on antitrust and the labor market.

Corporate Governance

The system of formal and informal rules by which a company is governed. Corporate governance shapes more than just a given's company value - it dictates who controls the capital in the economy and so how this capital is being put the use. Corporate governance therefore affects and is affected by the degree of cronyism and rent-seeking in society.

Media

Effective media scrutiny can help mitigate many of the problems that lead to regulatory capture, by helping the polity to become informed and mobilized. But what are the conditions that create effective media scrutiny? And why do we observe so little of it in reality? “Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” Justice Louis D. Brandeis

Regulatory Capture

When regulation protects narrow interests – usually the interests of the incumbent industry – at the expense of the public interest. Capture occurs in various ways: from straightforward bribes and threats, to more implicit quid pro quos such as the lucrative future employment (revolving door), to softer forms of cognitive/cultural capture. “... as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.” George Stigler - The Theory of Economic Regulation (1971)

Special interest groups

Special interest groups: Groups with preferences that differ from the preferences of the median voter. There is nothing wrong with special interests forming groups per se; the trouble starts when they disproportionally sway policy in their favor. “...the great enemy of democracy is monopoly, in all its forms: gigantic corporations, trade associations and other agencies for price control, trade-union… Effectively organized functional groups possess tremendous power for exploiting the community at large and even sabotaging the system.” Henry Calvert Simons - A Positive Program for Laissez Faire (1934)

Meet the Sugar Barons Who Used Both Sides of American Politics to Get Billions in Subsidies

Meet the Florida-based Fanjul brothers, who inject money to both political parties and dominate an industry that enjoys billions of dollar's worth of subsidies and protections.  Last week,...

American Antitrust Is Having a Moment: Some Reactions to Commissioner Ohlhausen’s Recent Views

Contrary to what Federal Trade Commissioner Maureen Ohlhausen says, there is in fact no meaningful proof that consolidation generates social benefits. Editor's note: In...

Corporate Culture in Investment Banking: An Inside Look

A former investment banker examines the culture that incentivizes people in the industry to put their interests before their clients’. Part three in a...

How Rich are the Parents of Your Money Manager, and What Does it Tell You About his Alpha?

In the last few decades, numerous studies in financial literature have been devoted to the question of “alpha”—that is, the ability of money managers...

Certificate of Need Laws Show Entry Barriers Can Raise Spending

In most states, health care providers who seek to open a new hospital must obtain a “certificate of need” (CON) from a state board certifying...

Why is Medical Marijuana Still Not Accepted in All 50 States? Ask George Stigler

A new working paper by University of Georgia researchers shows that medical marijuana leads to sharp drops in the number of prescriptions for...

Whistleblowers are Motivated by Moral Reasons Above Monetary Ones

Studies consistently show that whistleblowers are motivated by moral reasons. The primacy of moral concerns makes sense, considering how frequently whistleblowers face exclusion and retaliation rather...

SEC and Revolving Doors: Q&A with Eric Ben-Artzi, the Deutsche Bank Whistleblower Who Rejected a Multimillion Dollar Award

ProMarket interviews Eric Ben-Artzi, the former Deutsche Bank risk officer turned whistleblower who rejected an $8.25 million award from the SEC.  In May 2015, Deutsche Bank...

Combatting External and Internal Regulatory Capture

External and internal capture may be reduced through a more logical division of labor between Congress and agencies. In these hyper-partisan times, one is hard-pressed...

Regulators as Validators

Special interest groups can use their influence over regulation to water down not just potential legal sanctions but also potential reputational sanctions. What deters corporate...

Latest news

New Study Warns Antitrust Inaction May Lead To Acceptable Collusion for Public Policy Considerations

The modernization of EU antitrust laws muddied the water with regard to the ways that antitrust authorities and courts should handle situations...

Dark Money Dominates Spending by Special Interest Groups and Sways Elections

New research on undisclosed and unlimited political contributions, or dark money, exposes the increasing role that such funds play in U.S. elections.

The “Conspiracy” of Consumer Welfare Theory

Matt Stoller argues there was a conspiracy. It was more of an association with a singular purpose.

Researchers Find Reduced Competition After Pandemic

The chart of the week comes from a new research paper that documents the increase in small business closures during the Covid...

Voters Still Believe Politics is About the Common Good, Not Just Rent-Seeking

Do voters still believe that politics can be a source for common-good policies and not just partisan bickering and rent-seeking? With political...

How to Design Data Protection Laws That Actually Work 

More and more countries are passing data protection laws, yet empirical studies show that these laws rarely deliver on their promises. A...

Are Monopolists or Cartels the True Source of Anticompetitive US Political Power?

Trade associations are often the biggest obstacles to competitive markets, especially when those organizations use their influence to change public policy in...