I'm kind of over the whole "Anti-monopoly" movement

For many years, I was a big proponent of the idea that increased market power was harming the U.S. economy in various ways. In the 2010s, in the economics world, circumstantial evidence began piling up that implicated increased industrial concentration as the culprit in a variety of recent negative trends. Here’s what I wrote in 2017, after reading a bunch of that evidence:

[B]asically I see the case of the Market Power Story - or any big economic story like this - as detective work. We’re collecting circumstantial evidence, and while no piece of evidence is a smoking gun, each adds to the overall picture. IF the economy were being throttled by increased market power, we’d expect to see:

1. Increased market concentration (Check! See Autor et al.)

2. Increased markups (Check! See De Loecker and Eeckhout)

3. Increased profits (Check! See Barkai)

4. Decreased investment (Check! See Gutierrez and Philippon)

5. Decreased wages in concentrated markets (Check! See Azar et al.)

6. Increased prices following mergers (Maybe! See Blonigen and Pierce)

7. Weakened antitrust enforcement (Check! See Kwoka)

8. Decreased output (Maybe not? See Ganapati)

So, as I see it, the evidence is piling up from a number of sides here.

Some of this is micro evidence, demonstrating some of the pieces of the causal chain that some economists think leads from lax antitrust to bad economic outcomes. The Azar et al. (2017) paper shows that labor market concentration hurts wages. The Blonigen and Pierce (2016) paper shows that mergers raise prices.

The rest is macro evidence and macro theory. Economists see some trend in the economy — a lower labor share of national income, or decreased business investment, or fewer new companies being formed — and they think about whether something like monopoly power could explain those trends.

Just because a single story can explain the trends, of course, doesn’t mean it does. Ultimately you need a whole lot of micro evidence — not just a few papers — to prove each link in the chain of causality from weak antitrust enforcement to higher prices, lower output, lower wages, and so on. But in this case, the market power explanation was very tantalizing, because it had the power to explain so many of 21st century America’s dysfunctions at the same time.

This is why at Bloomberg, I wrote consistently in support of the idea that market power was making the American economy both less efficient and more unequal, and that stronger antitrust enforcement was a good solution to try. (However, I did note that antitrust wasn’t guaranteed to be a remedy, and that Big Tech companies were a bad target for antitrust enforcement.)

When Biden was elected, I was optimistic. His appointment of people like Lina Khan showed that antitrust was finally being taken seriously in Democratic Party circles. Finally, it seemed, the growing clamor of economists was going to result in some real efforts at reform:

The economists' revolt Noah Smith · July 22, 2021 Read full story

In that post, I revisited some of the important recent papers about market power, and I also noted that prominent economists were increasingly putting their reputations on the line by writing popular books advancing the thesis that market power was hurting our economy:

[Economists] have also raised the alarm about corporate power in other forums — Thomas Philippon’s book