Oligarchies, monopolies, and monopsonies

I highly recommend this article by John Quiggin:

Analyses of the upsurge in inequality since the 1970s have pointed to monopoly and monopsony power as a major factor. As Brett Christophers observed in his book of the same name, competition has ceased to be the “great leveller.” Or, to quote Nobel laureate Joseph Stiglitz, “As inequality has widened and concerns about it have grown, the competitive school, viewing individual returns in terms of marginal product, has become increasingly unable to explain how the economy works.”

The importance of monopoly and oligopoly in generating inequality has also been highlighted by bodies such as the Economic Policy Institute and the Open Markets Foundation, as well as by David Autor and other leading economists.

As is usual in economics, most discussion focuses on the United States. What about Australia? Last December, the Grattan Institute released a report seeking to debunk the idea that monopoly power creates serious costs for Australian consumers. Understanding this counter-intuitive finding takes some digging, but it turns out that the analysis rests on a simple, but dubious, choice of metric.

One useful measure of monopoly power is the proportion of household expenditure that goes to monopoly or oligopoly businesses. On the income side, economists worry about the extent to which large businesses can act as monopsonists (single buyers) using their market power over their suppliers, franchisees and workers. Taken together, the share of household expenditure and income that involves dealings with monopolists represents a reasonable measure of monopoly power.

Grattan’s analysts do something subtly, but crucially, different. They use the “gross value added,” or GVA, recorded in the national accounts to identify industries dominated by a few private firms. Their striking finding is that only about 20 per cent of the economy falls into this category. These firms account for a substantial share of the average household’s expenditure, but a much smaller share of GVA.

Why is this the case? Arriving at the GVA for any given firm involves subtracting from its sales revenue the inputs purchased from other firms. In Australia, those inputs are mostly services supplied by firms ranging from labour hire and cleaning services at the bottom end of the market to legal and accounting services at the top. In all but a handful of cases, these markets are highly competitive.

On any reasonable accounting, the fact that monopoly businesses deal mostly with competitive suppliers — suppliers that can be replaced if they don’t cooperate — makes the problem worse, not better. By using GVA as its measure, the Grattan analysis reaches the opposite conclusion.


591 thoughts on “Oligarchies, monopolies, and monopsonies

  1. I’m watching Jacinda Ardern’s press conference. She’s terrific. Her statement was clear, concise and heartfelt, low on sentiment and high on information. But she did a great job both of condemnation of the perpetrators and calling on national spirit. She stayed and took questions for ages. Of course there were a lot of “how are you to blame?” questions, but she handled them deftly without looking in the least defensive. She inspired confidence in her leadership in a way I haven’t seen in this country for a long time. Reminiscent of Gillard, but without the continual intense pressure Gillard was always under. One great line she had was that the perpetrators had no place, not only in New Zealand, but in the world.

    She confirmed that Morrison had been in contact with her, but she hasn’t spoken to him at this stage.

  2. I’m certainly interested in what role the other two males had and how they were apprehended. Very little information was offered on that, but there seemed to be a suggestion that they were actively involved. There was also a suggestion that the fourth,, was not directly involved (I think the woman, though I’m not sure exactly which three of the four were actively involved). So how she was apprehended is an unanswered question.

  3. How low is it possible to go ? Fraser Anning gives it a go and ”Mariana Trenched’ it .Bustard.

  4. The shooting starting to feel ‘local’ for me. Used to park along Deans Ave. where the mosque is for rugby matches and just saw a former team mate from back in those days quoted in the Guardian . This sort of shit is not meant to happen in NZ grrrrrr.

  5. A hop step and a jump from the shooting you can do this through the middle of the city and no doubt people were as the murderous bustards went to work 😦


  6. If you open the tweet, Andy’s thread explains a lot

  7. I really wanted to attend Melbourne’s students’ climate change protest, but couldn’t.

    However, another PhD student is now (fingers crossed) over the line.

  8. Visited the city in the early 80s and loved it, and have been back a number of times. Beautiful place but being there in April 2011 after the earthquake was shocking. We visited quite a few places especially out on the seaboard where broken houses hung over the cliff edges. We stayed out near the airport and as I walked in towards the city along a beautiful park there was a lone piper practicing.
    As I sat on the Hotel bed doing up my shoes one evening there was a sound like an underground train Andrew the room shook. It was part of regular aftershocks.
    I had been at a conference with Teachers from all over NZ and he stories of the Christchurch Teachers were shocking.
    The city has had a hard time of it lately.

  9. Hi Pubsters
    Happens I’m in NZ this week, checking out Wellington..

    Changed my sightseeing schedule to support the school strike this morning – the kids were awesome, passionate & articulate. HUGE crowd.

    Was on the cable car when people started going wtf while reading their mobiles… stunned and response similar to Jacinda.. this is not NZ…

    Re the media coverage, I’m watching TVNZ (decided it was better to stay in with takeaway tonight) and yes its heaps more appropriate than what I imagine ABC or 7,9,10 are now capable of. More measured, more “take care of each other”, “reach out to muslim friends”, the presenter and on-site reporters are all struggling at times.. more sincere and real… like Port Arthur coverage than anything more recent. Jacinda has a resilience and stature very JG like.

    Some of the social media coverage is pointing out that security services have focused on greenies, social justice warriors etc last few years, should have been watching white supremicists. Thats been a big scandel over here – SIS & various gov agencies using big PI firm to spy on earthquake victims, climate activists, so expect to hear more Qn about that.

    TVNZ anchor, now talking to their Sydney rep who is from Christchurch, talking about on-line hate, very adamant that she would not read anything from the terrorist’s manifesto. Wont assume oz media to be as sensible.

    Heard that 7 played some of the live stream, if true I’m not surprised from those racists scumbags…

    I’ll try to post some twitter from nz accounts but as Leonie has mentioned problems with twitter posts, here are a couple of nz accounts to check out if it doesn’t work.
    Idiot/Savant a lefty who tweets as @norightturntnz

    @radionz has very measured coverage.

    Bloody hell, the toll is now 49..

    KIA KAHA Kiwis
    (Maori for ‘stay strong’)

  10. Maybe if our intelligence services didn't spend the last decade spying on climate activists, and not enough on white nationalists, something like this might have been prevented. I think some hard questions need to be asked about how close an eye is being kept on white extremists— Kirk Serpes (@KirkSerpes) March 15, 2019


  11. Its also happens to be Wellington Pride month, not why I’m here but bonus as lots of activites..
    and just heard that ‘out in the park’ festival cancelled tomorrow, no word yet on tomorrow nights’s Pride Parade..

    Want to borrow this Hilary person anchoring TVNZ & put her on news24… She keeps repeating Jacinda.. “they are us” & emphasising that this hate is not part of NZ and NZers should hang onto that..

  12. Also some talk of port arthur type response re gun control as the wespons used are apparently legal with special permit – i recall some chat on nz social media last year that nz gun laws are sloppily & inconsistently applied..

  13. NZ has had a few smaller multiple shootings but incidents were all DV or mental health related… Never had ‘high’ terror alert before. End of NZ innocence…

    • I can hear him already. WTTE “Vote for us or a ChCh will happen. We’ll keep you safe. Not like those reffo loving Labor peasants”

  14. The first police responders who raced into the scene to help, before the terrorists had been stopped, were un- armed… seems most general duties cops in NZ are still based on UK bobbies.. trained to talk and de-escalate. That will probably change.

  15. Sigh… imagine if JG & JA were PMs either side of the ditch..

  16. WOW ! Just watched Fox News coverage of the shooting. Extremely sensible, saying they will not even name the guy or show a picture of him. Very sober very responsible coverage. In other words the complete opposite of how they would have reported it if it was a muslim doing the shooting.

  17. Broken white men and the racist media that fuels their terrorism

    C.J. Werleman March 15, 2019

    More specifically, Tarrant represents the dangerous convergence between broken white men and extreme right-wing media, bearing in mind that 100 per cent of all terrorist attacks carried out on US soil in 2018 were carried out by right-wing extremists, with the Southern Poverty Law Centre crediting a “toxic combination of political polarisation, anti-immigrant sentiment and modern technologies that help spread propaganda online”.

    These kind of attacks are being carried out in increased frequency and ferocity in mosques, synagogues, and black churches throughout the Western world, with a notable common denominator: the gunmen are always white, male and fuelled by consumption of right-wing media…

    oday, pundits can say and write things about Muslims that would never be published by editors or executive producers. Whereas anti-Semitism, anti-black and anti-Asian racism are rightfully and routinely condemned, Islamophobia remains the only form of racism that remains within socially acceptable limits.

    Last week, for instance, Fox News host Jeanine Pirro suggested America’s first elected black Muslim congresswoman would not be loyal to the US constitution because she wears a hijab, invoking the anti-Semitic “dual loyalty” canard, a slur that would have seen her show pulled had she said similar about a kippah-wearing Jewish American politician.

    For years, tabloid newspapers in New Zealand, Australia, Britain and the US have published a stream of inaccurate stories about Muslims, while also deploying sensationalised headlines, with one study finding British newspapers were pressured into correcting stories about Muslims more than 20 times in one three-month period, and another revealing that crimes committed by Muslims received almost four times as much media coverage as crimes committed by all other groups.


  18. There was a comment that Ardern could have drawn a bit of a long bow in saying NZ was chosen because of ‘who we were’. I think she must have been aware of the contents of the guy’s ‘manifesto’ . It seems there is some truth to it. A couple of comments from articles below. The city he chose and the one he considered , Dunedin , back up the comment re ‘least likely’ .

    “New Zealand was not the original choice for attack,” he said in his manifesto. “I only arrived to New Zealand to live temporarily whilst I planned and trained, but I soon found out that New Zealand was as target rich of an environment as anywhere else in the West.”


    ………..this is perhaps why Brenton Tarrant chose New Zealand as his theatre of action. In fact, he did say that he chose the most unlikely place on earth in order to prove that no place is safe for the “invaders”.

  19. Good morning Dawn Patrollers. Obviously it is wall to wall coverage of the NZ shooting today so I will limit the straight reporting on this act itself. You can seek these out yourselves.

    Experienced journalist CJ Werleman writes about broken white men and the racist media that fuels their terrorism.
    Patrick Begley tells us that a meme character used online by one of the alleged Christchurch mosque attackers is popular among a section of Australia’s far-right community, in particular racist podcasters The Dingoes.
    Greg Sheridan says it is now correct to describe a semi-coherent ideology of right-wing and racist political extremism in the West. It is less organised than some other forms of extremism, but it is deadly.
    Atrocities such as what happened in Christchurch will happen again while the media and politicians create a climate in which far-right ideas can flourish.
    Michael Koziol writes that the dossier seemingly compiled by the self-described terrorist who shot dead Muslim worshippers in Christchurch reveals an obsession with violent uprisings against Islam.
    There has been an outpouring of fury Fraser Anning blamed the Christchurch attack on Muslim immigration.
    Sam Maiden on Anning.
    In a long contribution Jack Waterford ponders whether a victorious Shorten could finally end the commonwealth/states blame game.
    Jason Wilson asks if the Christchurch shootings expose the murderous nature of ‘ironic’ online fascism.
    Crispin Hull declares that politicians are more concerned about their donors than they are about Australians.
    Meanwhile Peter van Onselen says that the Coalition has lost its best fundraisers.
    With wages stagnating since the Coalition took office, Labor is hoping to make the election a fight on industrial relations – even if it doesn’t have solutions writes Mike Seccombe.
    Paul Kelly writes about the chronic disunity of the Coalition, its lack of cultural power, its inability to sustain a message that resonates with the public and its failure to offer a persuasive explanation for the times.
    Laura Tingle says that politicians are on the run on climate change.
    Remember Morrison’s black-rock stunt? Well, look who’s scared now writes Katharine Murphy.
    Paul Bongiorno tells us all about Joyce’s war on metropolitan Liberals.
    Karen Middleton writes that as the Nationals quietly shift positions on climate change and energy, Barnaby Joyce is wreaking havoc as coal’s last defender. It’s Barnaby’s last stand.
    According to George Monbiot capitalism is destroying the Earth. We need a new human right for future generations.
    David Crowe opines that Morrison and Shorten each have a different concept of fairness, and an entirely different voter in mind. But Labor is tapping into the anxiety of younger Australians with astonishing force.
    Elizabeth Farrelly explains what’s driving loyal rural voters away from their party. It’s betrayal.
    Jess Irvine goes into how climate change will affect our mortgages.
    Simon Cowan reckons the living wage is living in the past.
    Nick Miller tells us how the British Parliament has done again what it does best: put off any useful decision on Brexit.
    And the AFR says Brexit’s economic poison will last for years.
    The Australian federal police is losing its independence and integrity and must be separated from Dutton’s home affairs portfolio, police union leaders have warned.
    After the release of the parliamentary report the SMH editorial says that regulation is needed to bring the franchise sector into line.
    Adele Ferguson piles in to Retail Food Group.
    The future of cafe chains such as Gloria Jean’s and Donut King has been cast into doubt after a damning parliamentary inquiry slammed Retail Food Group, the franchisor behind the popular brands.
    Michael West says Lendlease has come under fire in the US from the families of soldiers living in its military housing at Fort Hood for “abysmal housing conditions”. The irony is that this is the same military housing complex which Lendlease had just doubled in valuation, a feat of financial alchemy which must surely call into question Lendlease’s accounting practices across the whole business.
    The AFR’s Andrew Clark posits that when elite institutions unravel, it’s not enough to cite populism and move on.
    The Morrison Coalition Government has now doubled all debt stacked on by all governments in Australia’s history. Alan Austin updates both the budget failure and the media hypocrisy.
    Jacob Saulwick writes that the High Court has listened to Aboriginal people, so must politicians.
    The AFR explains how more than 800,000 homes could end up being worth less than what they were bought for.
    It’s only a matter of time before telcos lift the price of the NBN. That will uncover the risk at the centre of the controversial project’s business model.
    Paddy Manning says that a write-down of the NBN, as well as necessary upgrades, may cost taxpayers tens of billions of dollars, according to leaked emails from an industry expert forum.
    A solution to national debt could be achieved through quantitative easing, a way for new money to be injected into the economy, writes Ellen Brown.
    With just a week to go until the NSW election, the major parties are campaigning hard to woo voters. But it’s the micro-parties that may end up deciding who will govern says Alex McKinnon.
    Nicole Hasham reports that the Morrison government has appointed a long-time Liberal Party staffer to a $350,000-a-year job heading up the agency managing the struggling Great Barrier Reef, fuelling accusations the Coalition is stacking the senior public service with its political allies ahead of the May election. Is there no end?
    The whining Gerard Henderson is still banging on about Pell.
    The Saturday Paper’s Sarah Krasnostein gives an excellent account of her feelings during Pell’s sentencing.
    Rod Meyer reports that the Australian financial regulator has three superannuation funds in the gun for closure after whittling down its hit-list from 28 underperforming “outliers” over the past 18 months.
    Darren Kane tells us that the SCG Trust board won’t be as easy to punt as Labor thinks.
    It gets worse for Boeing.
    The muddled response by US regulators and the Trump administration to the safety risks of the Boeing 737 Max is raising fresh doubt about the international airworthiness not only of a jetliner – but also of American leadership.
    The New York Times says Congress has a breaking point. Trump may have found it this week.
    Fired by the president, the former US attorney has written his first book. He talks about if and when Trump will face justice – and why he fears for his own safety

    Cartoon Corner

    David Rowe has two for us today.

    Alan Moir goes to the UK.

    From Matt Golding.

    Andrew Dyson with a toxic culture update.

    Nice work from Glen Le Lievre.

    John Shakespeare on the standing of Warner and Smith.

    Jon Kudelka thanks the kids for yesterday.

    Sean Leahy on events in NZ.

    David Pope on the kids’ motivation to strike.

    Jon Kudelka ventures to the parliamentary forecourt.

    From the US

  20. Jacinda morning press conference..
    NZ Journalists much more polite while still asking probing Qns.
    Jacinda showing restraint and steel.. gun laws WILL change.

  21. Ouch!

    New Zealand’s prime minister, Jacinda Ardern, says she told the US president, Donald Trump, to show all Muslim communities “sympathy and love” when he asked what he could do in the aftermath of the Christchurch mosque attacks.

    • I prefer this response…

      as we know trump has no empathy, his sympathy is false, probably did not even write it. Trump’s rhetoric & hate speech is empowering & enabling acts of hate from individuals & politicians world wide. Jacinda has to (& should) be diplomatic, but I’m with Lucy.. The same applies to scomo, he can take his prayers and sympathies and F off too…

  22. I really should know better by now, but I fell for it again – reading the pro-government drivel from Laura Tingle.

    For some reason Tingle has an image of being somewhat friendly towards the left. I can’t imagine why. I can’t imagine what she has done to earn that status.

    Tingle writes an entire article which is really about the complete and utter failure of the ATM government to do anything to address climate change, but she never mentions “the government”. Instead she talks about politicians and politics. She can’t even bring herself to refer to “government MPs”, she says “individual MPs”. We all know why she did that. She names names, but still won’t say these names are members of the government.

    Same tired old tactic once again.

    She tries to make us believe all politicians, both major parties are the same and are equally guilty for the mess this country has become.

    She does however have a go at Shorten for not doing what the PG have been demanding over the last week – release Labor’s energy and climate policies.

    Shorten will do that when he’s ready. The PG, by insisting on bringing up this issue at every possible presser are doing their best to distract from the now daily disasters of FauxMo and what’s left of his ministry..

    I really should know better.

  23. I’m on the Welly waterfront this morning, atmosphere is very subdued compared to earlier in the week.. buskers are only playing gentle soothing music, even the ones who look more comfortable with head banging music.
    Welly pride parade postponed..

  24. I totally agree with this –

    I saw a tweet from Mark Latham last night in which he tried to express his sympathy for New Zealanders. The same man who a few days ago was inciting racism by demanding those seeking government benefits should have their DNA tested to weed out “blonde haired blue eyed” allegedly fake aboriginals. The same man who has allied himself to the party that gave us Fraser Anning. The same man who once declared Western Sydney had a “Muslim problem” and just four days ago said his own suburb had become an “ethnic enclave”.

    The former federal Labor leader told Sky News on Monday: “The whole theory of multiculturalism established by Whitlam and Fraser in the 1970s was to have a blended integrated society. It was not envisaged you would have a place like Lakemba in Western Sydney, which is 65 per cent Islamic.”

    “It was not envisaged that you would have ethnic enclaves


    He can frack off, and so can all his right-wing media colleagues.

    • Yep, he can F off too.. Newscorp, Sky/Fox & all their vile commentators should be treated like the vicious hate mongers they are, prosecuted for distributing offensive material. Noticable that Murdoch has no presence in NZ, msm in NZ much less vile than oz. They have a few rwnj commentators, but they’ve kept their heads down the last few hours.

    • All these comments help promote evil. And the terrorists take advantage of this evil climate. It’s a dark time in our life. Australia has changed, but then other countries too. France has changed dramatically under RWer Macron.

  25. TLBD

    He is. It really leapt out at me that he spoke and continued to speak clear plain English rather than bullshit jargon and or management speak. Very reassuring to read/hear.Made such a change from listening to the local drones.

  26. 1. Greg Sheridan : I almost couldn’t believe I was reading something from him but about half-way into BK’s linked article it changed and I detected (tell me I’m wrong) he began to use the tragedy as a vehicle to attack social media but his motives seemed more likely to restrict freedoms that have and ar continuing to have y profound fact of the agendas of right-wing thinkers ( is that an oxymoron?)
    2. Morrison has potentially edged himself with articles coming to light as I type that contradict his words on the subject of the massacre and this will also have spill-over effects on the remainder of his election campaign if the scare tactics against asylum seekers and black gangs is continued.
    3. Anning is doing what he has done all along , most recently at St Kilda, where he is enhancing his brand for the senate race in a few months time. He doesn’t care who votes for him, as long as they vote and we should not be deluded there is a subculture that was cheering him on.
    4. It seems that although NZ was to be a training ground for Tarrant, the descision to do what he did in Christchurch was deliberately focused on letting the world know that even the land of TLOTR is not immune to the rage of sick, angry white men.
    5. Will this solidify the base of the Shooters, Fishers and Wankers Party? Gun tradgegies in the USA typically cause a spike in gun purchases; how the electorate responds to this will be instructive.
    6. I’m so sorry for the people of NZ who last January when HI and I were in the NI they were shocked at the antics of a British family that was running wild and trashing the reputation of tourists. They didn’t have any idea what was coming!

    • Re your No.4 . It sure was. As he wrote in his manifesto.

      Why did you choose New Zealand as a place to attack?

      New Zealand was not the original choice for attack, I only arrived to New
      Zealand to live temporarily whilst I planned and trained, but I soon found
      out that New Zealand was as target rich of an environment as anywhere
      else in the West.

      Secondly an attack in New Zealand would bring to attention the truth of
      the assault on our civilization, that no where in the world was safe, the
      invaders were in all of our lands, even in the remotest areas of the world
      and that there was no where left to go that was safe and free from mass

  27. Bill Maher (I hour earlier due to daylight saving starting of finishing or whatever, I don’t know ’cause we don’t get that over here in the golden west)

    Starts at 8:30 mark (probably be edited later)

    New rules 56:00

    Overtime (geddit while it’s hot)

  28. The Morrison government is considering a ban on Milo Yiannopoulos entering Australia after the controversial right-wing commentator responded to the New Zealand mosque massacre by describing Islam as a “barbaric” and “alien” religious culture.

    The government is reviewing its earlier decision to allow Mr Yiannopoulos to visit Australia in light of the new comments, forcing a rethink on whether his views would incite hatred and division.

    The ban will be the third position the government has held in as many weeks on whether to allow the controversial figure to travel to Australia for a speaking tour later this year.


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