On the Importance of the Concept of Monopoly in Introductory Economics

In everyday life economics presents itself to us first and foremost as a problem of distribution, not of output, not of what economists would call “allocative efficiency.” This pizza place is ripping you off. That employer is lowballing you. In our intuitive economics, higher prices mean someone is taking money out of our pockets and […]

The Impractical Consumer Welfare Standard

As I mentioned in an earlier post, the CPI/CCIA conference at Harvard Law School last month brought together establishment scholars from the left and right to consider the calls for radical antitrust reform emanating from the Open Markets Institute (OMI), calls that have captured the imagination of some sections of the press and the political […]

Capitalisms

I’m an engineer by training. I’m a very systems, process, methodical decision maker. He’s an entrepreneur. Different mind-set. Management runs publicly-traded companies like ExxonMobil. Owners run private firms. The former are bureaucracies, the latter, fiefs. The former are a progressive invention, the latter much older. There is managerial capitalism, and then there is finance capitalism. […]

An Unreliable Interest

The trouble with governance by markets is that self-interest is highly unreliable. The theory is that a firm’s owner will optimize management of the firm because it is in the financial self-interest of the owner to do so. But here we have Eddie Lampert, owner of Sears, phoning it in to Indiana from his home […]