The Profit Paradox: How Thriving Firms Threaten the Future of Work
By Jan Eeckhout
4.5/5
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About this ebook
A pioneering account of the surging global tide of market power—and how it stifles workers around the world
In an era of technological progress and easy communication, it might seem reasonable to assume that the world’s working people have never had it so good. But wages are stagnant and prices are rising, so that everything from a bottle of beer to a prosthetic hip costs more. Economist Jan Eeckhout shows how this is due to a small number of companies exploiting an unbridled rise in market power—the ability to set prices higher than they could in a properly functioning competitive marketplace. Drawing on his own groundbreaking research and telling the stories of common workers throughout, he demonstrates how market power has suffocated the world of work, and how, without better mechanisms to ensure competition, it could lead to disastrous market corrections and political turmoil.
The Profit Paradox describes how, over the past forty years, a handful of companies have reaped most of the rewards of technological advancements—acquiring rivals, securing huge profits, and creating brutally unequal outcomes for workers. Instead of passing on the benefits of better technologies to consumers through lower prices, these “superstar” companies leverage new technologies to charge even higher prices. The consequences are already immense, from unnecessarily high prices for virtually everything, to fewer startups that can compete, to rising inequality and stagnating wages for most workers, to severely limited social mobility.
A provocative investigation into how market power hurts average working people, The Profit Paradox also offers concrete solutions for fixing the problem and restoring a healthy economy.
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Reviews for The Profit Paradox
4 ratings1 review
- Rating: 5 out of 5 stars5/5This is an excellent book that must make you think. It's a book that must make you think about market power, the rise of inequality, and the loss of the dignity of work. It is not an easy book to read - you must read this slowly. The objective of a dominant firm, as he says, is not to innovate. It is to prevent others from entering the market. to quote Warren Buffet, they build walls, or moats around their business, which make it difficult for others to enter. This then creates conditions in which a few firms dominate the landscape, and this is dangerous. the analysis is excellent, and I like the recommendations at the end. This is a book for our times. Read this in conjunction with "The Tyranny of Merit".