In March The Economist magazine rang alarm bells (again) about a rise in concentrated market power: a problem where the biggest firms get ever bigger and more like monopolies, making it easy to extract wealth from the rest of us (as opposed to creating wealth.) This, in turn fosters steeper inequality and poverty and reduces economic growth. As they put it:
“High profits across a whole economy can be a sign of sickness. They can signal the existence of firms more adept at siphoning wealth off than creating it afresh, such as those that exploit monopolies. If companies capture more profits than they can spend, it can lead to a shortfall of demand.”
Yesterday we received an email containing our quote of the day:
“this decades-overdue accounting rule is a historic development of tectonic proportions. It will enable analyses never before possible and vividly tie the opportunity costs of economic development to other public priorities.“
Our emphasis added. We wrote about this recently, but thought we’d underline its importance, with this quote.
This comes from Greg Leroy of Good Jobs First, a non-profit organisation dedicated to exposing and opposing corporate welfare and the race to the bottom between U.S. states on taxes and subsidies. So many of these subsidies and pork are given in the name of ‘competitiveness’ (or some other weasel word.)
This change in the U.S. can and should serve as an inspiration to other countries, and international standard-setters and international financial institutions like the IMF, World Bank or OECD need to push for these kinds of changes, around the world.