America's Monopolies Are Worse Than We Thought: Article Analysis

Monopolies are on the rise and wiping out the small businesses. This is bad news for consumers, because where monopolies are concerned there are also higher prices, limited markets, and the degradation of our economy. Just to add the cherry on top, monopolies are diminishing the labor force, as they use machines to replace their workers.

This article, America’s Monopoly Problem, was composed by Derek Thompson and published on the Atlantic Newsletter: For much of the 20th century, small businesses thrived and there was a steady control over big businesses, but in the more recent years, our economy is seeing more large, monopolistic firms popping up in all types of industries. Political power also comes into play under the issue of monopolies.

With the economic power, monopolists are able to buy their way into influencing congress, where they can protect their hold over the markets and keep competition out of the picture. Senator Elizabeth Warren gave a speech where she spoke out against monopolies, and she said that if it is left unchecked, concentration will be the destruction of innovation. Meaning, without the involvement of many innovators contributing new ideas, the economy will be unable to continuously develop, and instead experience a decline.
The article, Monopolies Are Worse Than We Thought, was written by Noah Smith for the Bloomberg View: Market concentration is also bad news for the working class, seeing as it is decreasing the share of national income in which employees earn.

As monopolies grow, labor then decrease because these companies are spending on capital to increase production and efficiency, which the labor force can’t guarantee. As companies continue to build more machines and replace their employees, they take in more money and continue to grow, along with their power, and dominate the markets. Another factor that is allowing monopolies to increase, is the lack of antitrust enforcement. In 1890, congress passed the Sherman Antitrust Act to keep big business in check, but if the laws aren’t being enforced it doesn’t serve much of a purpose. One would think of regulation as a positive thing in many areas of the government, but in the case of monopolies, it is only benefitting them and hurting small businesses, the opposite of what the consumers are in need of. Barriers to entry can cause businesses to shy away from competing in the markets where monopolies are concerned since they have a much lower chance of making it after all the money they would need to shell out in order to get into the race with the monopolistic

companies.
The third article, “What's so bad about monopoly power?”, was written by Mark Thoma, and was published on the CBS News website: Firms with monopolistic power are able to charge high prices that stem from an uncompetitive market, and with these higher prices, consumers will buy less of the product and so the quantity of production as well as consumption is going to be lower than that of a competitive market structure; there is an “inefficient allocation of resources.” When competitive markets are in place, there are more options for the customers to choose from, and when there are choices, business have the power to adjust the prices at which they choose to sell.
The last article, The Delicate Balance Between Competition and Monopoly, was written by Enrique Dans and published by the Forbes website: This last article is used to show examples of monopolies. The smartphone market, which happens to be the world’s fastest growing market, is being dominated by Android. The company is control of eighty percent of the global smartphone market, and its only true competitor is Apple who still only holds less than twenty percent of the market shares. Smartphones are incredibly easy to monopolize because of the fact that whoever holds the power over the operating system, also holds the power over what services are able to operate on the device. It is sad to say, but for companies like Facebook it is necessary for them to stay on the good side of these companies, because if google decides to block access to the website it will lose many of its users. However, it also works both ways because if Facebook chooses to operate only on systems like Microsoft and ban access through google, many of its loyal consumers will then go through the new operating system to gain access to their favorite social media site, and discard the search engine that doesn’t make that possible for them to achieve.
Another article which provides an example of the effects of monopolistic power, Drugs for Rare Diseases Have Become Uncommonly Rich Monopolies, was written by Sarah Jane Tribble and Sydney Lupkin, for Kaiser Health News: When a company finally gets approved to introduce their drug into the market, after jumping through the many hoops it takes to get there, the company gets seven years of exclusive rights to sell in the market. Meaning, the FDA isn’t able to approve another version of the drug which treats the same disease for seven years. This creates the simplest form of a monopoly because of the unrelenting barrier to entry.
Monopolies hold a negative impact over our economy, and our government needs to take more action into breaking up the big businesses to allow smaller businesses to survive in the market. When monopolies are in control, product differentiation isn’t a possibility and the prices for these basic goods are unreasonably high. When the prices are too high, consumers are unwilling to buy extra, or none at all, and as less money is funneled into businesses, less money is then going back into the economy.