The Great Reversal

In this much-anticipated book a leading economist argues that many key problems of the American economy are due not to the flaws of capitalism or the inevitabilities of globalization but to the concentration of corporate power. By lobbying against competition the biggest firms drive profits higher while depressing wages and limiting opportunities for investment innovation and growth. Why are cell-phone plans so much more expensive in the United States than in Europe? It seems a simple question. But the search for an answer took Thomas Philippon on an unexpected journey through some of the most complex and hotly debated issues in modern economics. Ultimately he reached his surprising conclusion: American markets once a model for the world are giving up on healthy competition. Sector after economic sector is more concentrated than it was twenty years ago dominated by fewer and bigger players who lobby politicians aggressively to protect and expand their profit margins. Across the country this drives up prices while driving down investment productivity growth and wages resulting in more inequality. Meanwhile Europe―long dismissed for competitive sclerosis and weak antitrust―is beating America at its own game. Philippon one of the world’s leading economists did not expect these conclusions in the age of Silicon Valley start-ups and millennial millionaires. But the data from his cutting-edge research proved undeniable. In this compelling tale of economic detective work we follow him as he works out the basic facts and consequences of industry concentration in the U.S. and Europe shows how lobbying and campaign contributions have defanged antitrust regulators and considers what all this means for free trade technology and innovation. For the sake of ordinary Americans he concludes government needs to return to what it once did best: keeping the playing field level for competition. It’s time to make American markets great―and free―again.