SOLUTION: the World Economic Forum | My Assignment Tutor

Economics 201MicroeconomicsCan we live with monopoly?https://www.youtube.com/watch?v=OksUxHOt1xcIn this debate at the World Economic Forum earlier this year, the two debaters put the case for and againstmonopoly power.Jennings argues that big tech, retail and banking companies have monopoly power, which enables them towipe out competition (he refers to Walmart as an example of this). This can be bad for consumer choiceand reduces consumer power in the market. It also gives monopolies power in labour markets so that theycan pay low wages with few benefits (many workers do not have a choice of alternative employment –much as we discussed in minimum wage analysis). He goes so far as to claim that monopolies influencethe way that we think and behave (through social media etc). Big firms have been fined huge amounts(billions of dollars) for tax evasion, which he argues is evidence of their attempts to abuse their power.Autor agrees with some of this analysis but argues that big companies have got big through efficiency(good logistics in terms of Amazon, or network effects in terms of Google for example). Whereas mostlegislation (and our classroom analysis) focuses on controlling monopolies because they charge higherprices, he claims that new monopoles do not work in this way. Amazon and Google have brought pricesdown and consumers have benefitted in many ways. He further argues that fast changing tech has led tosome big companies failing (Myspace for example) and predicts that big firms are still vulnerable to newtech and they have to remain innovative and efficient if they wish to keep their position.