‘Markets, monopolies and moguls: the relationship between inequality and competition: John Freebairn Lecture in Public Policy, University of Melbourne, 19 May 2016‘, Andrew Leigh MP website, 20 May 2016
Like a large tree that overshadows the saplings around it, firms that abuse their market power prevent newer competitors from growing. They hurt entrepreneurs and often reduce the scope for innovation. Consumers suffer through higher prices, lower quality and less choice.
But some of the benefits of market power invariably go to the people who run the firms. At the time of his secret meeting at the All Nations Hotel, Richard Pratt was the third richest person in Australia.
The author graphs market concentration in the 20 largest Australian industries; banking is easily top. He compares Australia with the United States; Australia is much worse. He compares banking concentration across the OECD; Australia is about in the middle.
The author looks at how lack of competition contributes to inequality and proposes some policy responses, addressing what Labor would do in government. The lecture is discussed by Ben Eltham on New Matilda. Earlier material from Andrew Leigh on inequality. And a speech from 2017.