The Myth of Capitalism: an ardent capitalist decries monopoly

Naked Capitalism's Yves Smith reviews Joanthan Tepper and Denise Hearn's The Myth of Capitalism: Monopolies and the Death of Competition, in which Tepper (who does research that is sold to asset managers) condemns capitalism's current state while rejecting Thomas Piketty (who says that capitalism inevitably elevates the already-rich, not the people who create wealth by doing useful things) and Karl Marx.

Like Piketty, though, Tepper seeks to rescue capitalism, rather than jettison it. Piketty prescribes a global wealth tax to erode inequality and make it possible for governments to create evidence-based, pluralistic policies that benefit the many, not the few, while Tepper jumps straight to those policies: specifically, Tepper wants to reinvigorate antitrust and break up monopolies and oligopolies, and ban anti-competitive behavior.

This is an increasingly mainstream position, but, based on Smith's review, it's safe to say that Tepper makes it very well: from his vantage-point as a researcher serving the highest fliers of the finance industry, he is well-positioned to document the sleazy deals that monopolists make to carve up markets rather than compete in them, and the way that we all suffer as a result.

Tepper catalogs the 29 worst rigged markets (while noting that there are many others), from ISPs to online services to milk to funeral homes to dialysis to eyeglasses to airlines to tax-prep to health insurance to agriculture to the media.

And, contra Peter Thiel and the Chicago School, Tepper explains in fine detail how monopolies create disefficiencies of scale, performing worse than smaller companies, and retaining their position not by doing best in the market, but by rigging the market to crush new entrants. Read the rest