A pioneering account of the surging global tide of market power--and how it stifles workers around the world
In an era of technological progress and easy communication, it might seem reasonable to assume that the world's working people have never had it so good. But wages are stagnant and prices are rising, so that everything from a bottle of beer to a prosthetic hip costs more. Economist Jan Eeckhout shows how this is due to a small number of companies exploiting an unbridled rise in market power--the ability to set prices higher than they could in a properly functioning competitive marketplace. Drawing on his own groundbreaking research and telling the stories of average workers, he demonstrates how market power has suffocated the world of work, and how, without better mechanisms to ensure competition, it could lead to disastrous market corrections and political turmoil. The consequences are already immense, from fewer startups that can compete, to rising inequality and severely limited social mobility. A provocative investigation, The Profit Paradox also offers concrete solutions for fixing the problem of market power and restoring a healthy economy.
"Eeckhout has done groundbreaking work on the rise in prices in the economy and the dynamics of the labor market. This book is a significant contribution to the field."--Gabriel Zucman, coauthor of The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay