The Vergecast How America gave up on free markets with Thomas Philippon
Nov 12, 2019
Thomas Philippon, a finance professor at NYU Stern and author of "The Great Reversal," dives into America's shift from competitive markets to consolidation. He discusses how consumer prices, particularly in healthcare and tech, have risen unnoticed due to market concentration. The conversation highlights the contrasting market dynamics between the U.S. and Europe, the challenges posed by tech giants, and the need for updated antitrust frameworks. With insights into Amazon's unique market role, Philippon emphasizes the importance of strengthening competition for consumer welfare.
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Price Reversal
- Thomas Philippon noticed prices increasing when he moved to the U.S. from France.
- Items like laptops and internet access were cheaper in the U.S. in the 90s but are now more expensive.
Market Competition
- The U.S. has poorly competitive markets in many sectors, while Europe has more competitive markets.
- This price difference is due to Europe adopting pro-competition policies while the U.S. didn't.
Telecom Prices
- Internet broadband access costs $68 per month on average in the U.S., while in France, it's $31.
- A new entrant in the French cell phone market lowered prices by half, forcing incumbents to match.
