The free market economy is in danger – so you could interpret a study by the International monetary Fund, which he has published today, in the framework of the semi-annual world economic Outlook in advance.
The focus of the study is, however, not on ideological challengers, autocratic regime, or the growing influence of Communist China. The danger threatens from the inside: from the ever-growing Power of less company .
As the study shows, helps the growing market power of a whole series of problematic developments, to explain, worry for some time for concern and for the growing influence of the populists held responsible: declining investment, lower interest rates, low productivity and economic growth and the declining share of employment in the total economic Output, and thus the increase in inequality.
the higher the margin, the greater the market power.
For the study, twelve Economists, around one Million companies across all industries in 27 countries since the year 2000 are examined. Two-thirds of the companies are located in the rich and a third in emerging countries. Switzerland, however, is not among them.
The market, the authors have on the basis of the margin between the prices, which can enforce a company on the market for its products, and the (marginal)costs measured. The higher the margin, the greater the market power.
As the study shows, the market makes less business in all the industrial countries increased. In the U.S., however, greater than in Europe. Particularly evident is shown in the non-industrial sector (the industry has changed a little). The IMF announced the financial and insurance industry and the providers. But a strong market power and market power increase in the case of companies from the IT sector. And while the measured increase in market power altogether, only it is moderate, it shows particularly clearly in the case of the largest and already the most powerful companies.
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Even if the study does not mention any names of companies that are likely to be especially large corporations, such as Google , Facebook , Microsoft and Apple , which are addressed here. In other studies their Power and the consequences on the labour market under the heading of Superstar, the topic of companies. A large proportion of this research, the Zurich-faculty, Economist David Dorn.
The Economists of the IMF support now, the results of Dorn and colleagues. Already they have determined that the power has contributed to the concentration in a few companies, the share of labor income in total economic output has decreased in comparison to the capital income. This is particularly pronounced in the United States, but it also shows in the trend in the world.
Superstar firms pay significantly higher wages
The IMF justified the declining labour share and the growing wage inequality – among other things, that the owners of the more powerful corporations are skimming greater profits, and that these companies can achieve profits even with a lower output, whereby the demand for workers compared to a Situation without market drops. Similarly, Dorn and colleagues have argued. In addition, the Superstar can companies due to their greater Power is also significantly higher wages especially for the top staff pay, which increases the wage inequality.
For the Superstar companies, speaks at the first glance, according to the knowledge of the IMF and of other that it is to be particularly productive and innovative companies which, in turn, to Google, Apple and co. are thinking. But if this Power is once attained, it can also be required for technical reasons, is hardly more out of it.
A basic economies of scale: The cost of a tender, once it is programmed, such as for example Youtube, use a per-user getting smaller and smaller, the more the offer. Network effects finally, to ensure that an offer for the users is always valuable, and indispensable, the more it is also use – that is why it is hard to compete with Facebook or Whatsapp .
prompt to be more vigilant
That the Power of the most powerful companies increase due to your performance for your clientele, troubled, according to the IMF Economists, particularly with regard to the story. Because once at the top, companies would usually try their competition by less honorable methods of entry into your business to stop trying.
An example of this is Google, the wanted to discriminate against other providers in the network through its influence specifically, how the accused, the EU, the US group, and for him a multi-billion penalty it has imposed.
at a certain point, would decrease in addition, according to the IMF, powerful firms in their innovation, since they can hardly be more than competing. Your application will then focus on securing their Power over the political use or to save taxes through a clever international corporate structures.
The IMF therefore calls on the regulatory authorities everywhere to be vigilant and to Act decisively when necessary. In particular, corporate mergers, it is important from the aspect of market power, particularly under the microscope.
(editing Tamedia)
Created: 03.04.2019, 18:59 PM
