Cable on competition

The empirical evidence suggests that Marx was wrong. There is no tendency for capital to become more concentrated. Studies show that firm growth is independent of size (or anything else!), and so the distribution of firm size doesn’t change much over time. The degree of competition or monopoly is roughly stable. Tesco or Wal-Mart might seem monopolistic, but they are less so than 19th century truck stores.

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Comments

[Chris Coleridge]

Hi Anthony

Interesting post. Does your assertion "control" for anti-trust, whether active or latent? For example I tell my Strategy students that Tesco doesn't bother to run a feasibility study on buying J Sainsbury, they know it's not possible... so surely Cable's comments simply presage the start of a periodic uptick in anti-trust action?

All the best
Chris

[aje]

Hi Chris
That's a good point, but I go back to the studies Warren Nutter did comparing capital concentration in the USSR and the USA in the 1950s. I don't know enough about anti trust history to pontificate on the role it had, but I do note that large companies tend not to last over time, regardless of whether they engage in M&A (there's a possible argument that mergers weaken a companies growth prospects...)
For example, if you compare the Forbes 100 in 1917 and 1987, or the Euro Stoxx Index 1987 - 2005, it is very rare for large companies to grow larger.

[Coach Outlet]

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[MBT Shoes]

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[abercrombie]

What a fun pattern! It’s great to hear from you and see what you’ve sent up to. All of the projects look great! You make it so simple to this. Thanks