Document Type

Article

Publication Date

2016

Abstract

Wealth inequality has reemerged as a major political issue and may become one of the defining themes of the 2016 presidential election. Progressives claim a broad set of causes for wealth inequality, from tax loopholes favoring the wealthy to the decline of private sector unionization. Recently, a number of high-profile public intellectuals have begun to finger an additional culprit - lax antitrust enforcement. According to prominent progressives such as Nobel economics laureates Joseph Stiglitz and Paul Krugman, former labor secretary Robert Reich, and Oxford economist Anthony Atkinson, weak enforcement of the antitrust laws has permitted the flourishing of anticompetitive mergers, monopolistic conduct, and other exclusionary and collusive behavior, with the effect of redistributing wealth upward to corporate shareholders and senior executives and away from the less wealthy strata of society. This monopoly regressivity claim is increasingly being repeated in legal and economic scholarship and in the media. The monopoly regressivity claim may have considerable political appeal, but it is vastly overstated. Althought htere are surely some violations of the antitrust laws that exacerbate wealth inequality, the generalization that more antitrust enforcement would lead to a more equitable distribution of wealth misunderstands the actual incidence and effects of antitrust enforcement. Exercises of market power have complex, cross-cutting effects, some of which may be regressive, but many of which may also be progressive or distributively neutral. More antitrust is not the answer to wealth inequality.


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