Category Archives: Harm through the market

Oligopolies and monopolies are very important ways of obtaining income without providing a productive service. They produce goods, a productive service. However, they receive additional income by raising prices, and their oligopoly/monopoly profits are distinguished by economists from normal profits and other expenses, which are the returns to productive activity. There are other harmful aspects to concentration and large firms as well, including restriction of innovation, using patents to defend market position, labor market power, including non-compete requirements for their employees, and substantial political power.  It is important to bring out that this harm involves the productive sector. Goods are being produced, but part of the income is from harmful activity. This is very often true–harmful activity is intertwined with productive. Also see Obtaining income from the government as both are often involved. Tax havens are another way in which taxes can be minimized and income from corruption can be laundered.

Harm through the market 2022

Prices, Profits, and Power: An Analysis of 2021 Firm-Level Markups Mike Konczal and Niko Lusiani Roosevelt Institute June 2022 (Download of a 12 page PDF file)
How to understand and respond to inflation has become one of the central debates of this economic recovery. This research brief is the first to explore the size and distribution of markups (essentially the difference between sales and marginal costs) and profit margins across 3,698 firms operating in the US in 2021…. The evidence of this unusually and suddenly high jump in markups fits all three of the main explanatory stories of inflation being debated—namely those related to changes in demand, supply, and market power. First, we see broad markup increases across many types and sizes of firms, suggesting a demand side of the story. Second, the data points to a historically unique movement of markups between industries in 2021, suggesting a supply story. Lastly, we find that, adjusting for size, pre-pandemic markups are a strong predictor of the increase in markups during 2021, suggesting a role for market power as an explanatory driver of inflation.

Ten ways billionaires avoid taxes on an epic scale Paul Kiel ProPublica June 24, 2022
After a year of reporting on the tax machinations of the ultrawealthy, ProPublica spotlights the top tax-avoidance techniques that provide massive benefits to billionaires.

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Harm through the market 2021

This tree has stood here for 500 years. Will it be sold for $17,500? Juliet Eilperin Photos and video by Salwan Georges Washington Post December 31, 2021

The worker revolt comes to a Dollar General in Connecticut Greg Jaffe Washington Post December 11, 2021
A call to a union triggers one of the most lopsided battles of the ongoing low-wage-worker revolt.

Starbucks baristas are on the verge of forming a union. The company is pushing back. Joanna Slater Washington Post November 23, 2021

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IMF: Fossil fuel subsidies $5.9 trillion or 6.8 percent of GDP in 2020

Still not getting energy prices right: A global and country update of fossil fuel subsidies Ian Parry, Simon Black, Nate Vernon International Monetary Fund September 24, 2021
Globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of GDP, and are expected to rise to 7.4 percent of GDP in 2025. Just 8 percent of the 2020 subsidy reflects undercharging for supply costs (explicit subsidies) and 92 percent for undercharging for environmental costs and foregone consumption taxes (implicit subsidies). Efficient fuel pricing in 2025 would reduce global carbon dioxide emissions 36 percent below baseline levels, which is in line with keeping global warming to 1.5 degrees, while raising revenues worth 3.8 percent of global GDP and preventing 0.9 million local air pollution deaths.