These is a dialectical relation, but there was something else going on in
the last thirty years. For instance, in the auto industry. The big three had
a oligopolistic situation in North America. The entrance of the Japanese
firms in the 1970s increased the competition. But now in the world auto
industry a new oligopolistic structure is emerging, because of a new round
of mergers and joint projects. Once the economy is truly global that dynamic
will stop. The entry costs are too high to establish new competition. The
only way the industry will experience a new round of competition is if some
new method of transportation is developed, in which new firms would have the
opportunity to enter.
Rod
Michael Perelman wrote:
> For the first of all, I want to thank Tom and Gene for starting this
> thread. It's been a long time since we had any conversations about the
> economy here. I was getting fairly frustrated with the content of this
> list.
>
> The forces tending to increase competition in the United States were
> deregulation, as Jim mentioned, and the pressure from imports. The
> forces tending to diminish competition were intellectual property,
> mergers, and possibly government contracting. In fact, as Jim seemed to
> suggest -- if he didn't, he should have -- the pressures from
> deregulation and imports have encouraged more mergers and acquisitions.
> Anthony specifically pointed to this dialectical relationship.
>
> I also believe that the degree of macroeconomic activity is a major
> determinant of the level of competition. When the economy is booming,
> there is relatively little competitive pressure. When the economy falls
> into a recession or depression, competitive pressures intensify.
>
> Jim also mentioned that wages are falling relative to labor
> productivity. I associate this trend with intellectual property as
> well. Labor productivity increases with the ability to mark goods up --
> Nike shoes are an excellent example, but the same holds for Microsoft
> software.
>
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail [EMAIL PROTECTED]
--
Rod Hay
[EMAIL PROTECTED]
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