Increasing markups across industries.
Declining worker power and the divergence of pay from worker productivity.
Anomalously low corporate investment, given the low and declining cost of borrowing and the
seeming abundance of profitable opportunities and production factor underutilization.
The explosion of shareholder payouts (dividends and stock buybacks) as a corporate use of
funds, in place of investment, payments to upstream suppliers, workers’ wages, and taxes.
Declining firm entry, labor market dynamism, and initial offerings on public equity markets.
Rising horizontal market concentration and the development of vertically integrated and con-
trolled business models in many industries that have the effect of walled gardens.
This article focuses on two particular elements of the overall market power story: common own-
ership by shareholders of overlapping and potentially competing firms, and the increased power of
employers in labor markets. The basic story linking these two things to the overall narrative of rising
market power is that during the era in whi ch New-Deal-influenced corporate manag erialism was
dominant in the U.S. economy, from the 1930s to the mid-1970s, shareholders were relatively dis-
persed and management structure was concentrated. Conversely, workers were, on the whole, more
concentrated than they are now, given their greater status and bargaining position within the multi-
stakeholding corporation. Since the revolution in corporate governance that has been playing out since
the 1970s, shareholding has become more concentrated and workers more dispersed, shifting power
within the corporation away from workers and toward shareholders. This trend has changed manage-
ment from being an agent that is relatively insulated from shareholders and beholden to workers to
being an agent that is beholden to shareholders and insulated from workers.
Concentrated share ownership is one of the vectors for channelizing capital market power to benefit
shareholders. Notably, owners of capital have continued to enjoy high returns, even though the long-
term decline of risk-free interest rates and corporate costs of borrowing
would seem to suggest that
what they supply to the market is not scarce.
The ability of concentrated shareholders to sway the
decisions of management has been crucial to the maintenance of that capital market power. Moreover,
one way in which concentrated shareholders can sway management to increase their return on
transact. In fact, this definition highlights the reality that market power in the hands of one party, an employer, for example,
entails competition on the part of the counterparty, for example, workers vying for scarce jobs.
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124 The Antitrust Bulletin 66(1)