Read Millionaire Fastlane
- May 5, 2014
From plane tickets to cellphone bills, monopoly power costs American consumers billions of dollars a year.
This article caught my eye today. Some interesting quotes here:
None of this has happened by chance. In 1999, the United States had free and competitive markets in many industries that, in Europe, were dominated by oligopolies. Today the opposite is true. French households can typically choose among five or more internet-service providers; American households are lucky if they have a choice between two, and many have only one. The American airline industry has become fully oligopolistic; profits per passenger mile are now about twice as high as in Europe, where low-cost airlines compete aggressively with incumbents.
Basically, the assertion is that the US economy is no longer a free market but an oligopoly, whereas Europe has become more of a free market, and that they are reaping the benefits of competition ($50 flights to Ireland, anyone?).In my research on monopolization in the American economy, I estimate that the basket of goods and services consumed by a typical household in 2018 cost 5 to 10 percent more than it would have had competition remained as healthy as it was in 2000. Competitive prices would directly save at least $300 a month per household, translating to a nationwide annual household savings of about $600 billion.
I'm actually not opposed to oligopolies so long as new entrants have a fair shake (which free market allows). But the lobbying and political climate in the US is so intense, that you can't enter a new market without setting aside a massive lobbying budget or ignoring the rules all together like Uber/Lyft. The sad thing is, the trend doesn't seem to be breaking, because of cronyism.
Just my take.
Maybe Europe is the better place to start a business soon, for those looking for a move...?
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