Opening remarks by Luigi Zingales to the Stigler Center conference: “Is There a Concentration Problem in America?”
What is the role of antitrust in a free-market economy? Historically, economists have been divided on this point. Even Milton Friedman himself admits to having changed his views, turning from a “great supporter of antitrust laws” to “the conclusion that antitrust laws do far more harm than good.” Any economic analysis of the costs and benefits of antitrust enforcement, however, must start from the empirical evidence on the existence of a concentration problem and its potential effects.
Overall, in the last twenty years these questions have received relatively little attention, and the presumption that concentration was not an issue prevailed. Not so in the past year. Starting with a report from the Council of Economic Advisers and an article in The Economist, concerns about an increase in concentration began to surface in the public debate.
Yet, we know that all concentration measures have great shortcomings. Thus, these measures alone cannot be used to infer that there is a concentration problem in America. The more important question is whether this possible increase in concentration has translated into an increase in firms’ market power and whether this increase in market power has caused major welfare distortion.
To try and answer these questions, we decided to bring together world experts on these topics in a conference organized by the Stigler Center. In preparation for this conference, the Stigler Center’s blog ProMarket, has gathered the opinions of many of these world experts. We collect them here for convenience of the conference participants. We hope they can help as stimuli for an ample and lively debate during the conference.
