While there has never been a shortage of dissent on the virtues (or lack thereof) of US capitalism, an increasing number of establishment pundits and publications are slowly conceding the system is fundamentally broken.
After the 2008 financial crisis, left wing critiques began seeping into the mainstream, culminating in the publication of French economist Thomas Piketty’s “Capital In the Twenty-First Century.” Piketty was complimented by other more established voices calling bullshit on US capitalism, such as former Nobel-prize economists Paul Krugman and Joseph Stiglitz.
And now, in perhaps the most embarrassing defection to reality from neoliberalism yet, The Economist has admitted US capitalism is in desperate need of government intervention. For those unaware, The Economist has long served as one of the leading and most respected voices promoting market fundamentalism, also called neoliberalism.
Previously, The Economist championed nearly every idea to make countries more subject to market forces, but now the neoliberal rag claims the US has a monopolistic economy the government needs to regulate more aggressively:
Our analysis of census data suggests that two-thirds of the economy’s 900-odd industries have become more concentrated since 1997. A tenth of the economy is at the mercy of a handful of firms—from dog food and batteries to airlines, telecoms and credit cards. A $10 trillion wave of mergers since 2008 has raised levels of concentration further. American firms involved in such deals have promised to cut costs by $150 billion or more, which would add a tenth to overall profits. Few plan to pass the gains on to consumers…
The first step is to take aim at cosseted incumbents. Modernising the antitrust apparatus would help. Mergers that lead to high market share and too much pricing power still need to be policed. But firms can extract rents in many ways. Copyright and patent laws should be loosened to prevent incumbents milking old discoveries. Big tech platforms such as Google and Facebook need to be watched closely: they might not be rent-extracting monopolies yet, but investors value them as if they will be one day. The role of giant fund managers with crossholdings in rival firms needs careful examination, too.
Et tu, banke? Of course, all the establishment figures and institutions that have pointed out the US economy is a game rigged for a kleptocratic elite are correct. But what do these changes of heart really mean?
So far, nothing.