Statistics show that the rich in the United States have become richer. According to a study by the St. Louis Fed Family Financial Stability Center, in 1989, people with the lowest income, the middle 50% to 90%, and the highest 10%, accounted for 15% of their total pre-tax income. %, 42% and 42%. In 2016, this share changed to 13%, 37%, and 50%, and only the top 10% income group’s share increased.
There are many factors that cause income inequality, and race and education level are very important factors. As pointed out in the previous study, “We found that prosperous families tend to be white, college-educated, and/or older. We found that troubled families tend to have one or more of the following characteristics: black or Hispanic; There is no four-year university degree; and/or younger.”
However, more and more studies believe that monopoly is also one of the causes of income inequality. In June 2016, the American Antitrust Association published “National Competition Policy: Interpreting the Problem of Decreasing Competition and Identifying Priorities for Moving Forward.” This report listed three main symptoms of declining competition: increased concentration and a small number of large companies. Increased profits and widened inequality gap.
Why does monopoly cause income inequality? Because loose antitrust enforcement allows companies to gain market power, which enables them to reduce output, increase prices, and create monopoly profits, and all these activities are beneficial to shareholders. Increasing returns flow to shareholders, so they get the highest proportion of wealth and income distribution, leading to inequality in income and wealth.
Therefore, many researchers and institutions suggest that the anti-monopoly law and regulatory agencies can make the reduction of inequality a clear anti-monopoly goal, instead of taking consumer welfare as a single goal. Specifically, if the behavior harms the interests of middle-income and low-income consumers and benefits the wealthier consumers and shareholders, then it may be regarded as anti-competitive behavior. If it benefits middle- and lower-income consumers at the expense of wealthier consumers and shareholders, it may also be considered permissible.
However, in practice, it is difficult or even impossible to regard reducing inequality as an anti-monopoly goal. Take company mergers as an example. Anti-monopoly agencies need to judge the impact of company mergers on final consumers. For many intermediate products, it is difficult to make such judgments. Even the consolidation of the final consumer goods market is not a simple task.
How to weigh the loss of consumers? If it is those luxury goods that are positioned in the middle and high income class, should they encourage price increases? For many commodities subject to value-added tax and consumption tax, higher prices mean more taxes, and taxes are usually an important tool for redistribution. The problem is that reducing output and raising prices are the original targets of the antitrust law, but if raising prices matches “reducing inequality”, how to resolve this conflict?
One factor to consider at the same time is the investment income of pension funds. In recent decades, more and more pension funds have participated in the stock market and have obtained generous returns by investing in excellent companies. Take Apple as an example, 2.70% of the equity belongs to government pensions, and 0.17% comes from endowment funds. The increase in the wealth of these companies will help pension funds-that is, help the distribution of wealth in the entire society. In the face of this situation, how to deal with the so-called “reduction of inequality”?
It can be seen that adding the goal of “reducing inequality” to antitrust may be difficult to operate. As Professor Carl Shapiro of the University of California, Berkeley said, antitrust is not suitable for solving the problem of income inequality. The problem of income inequality can be achieved through fiscal policies, social security and education policies. Although strengthening anti-monopoly law enforcement may moderately help solve the problem of income inequality, it is unwise to explicitly include income distribution in the anti-monopoly analysis, and in many cases it will even outweigh the gains.
