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Ever since the 1980s – there have been huge changes in the global economy.

And it appears many of these changes have led to the rich getting richer – the poor getting poorer – and the rest of us being squeezed dry.

Now, I’m not making a blanket philosophical opinion here (I am personally a free-market fellow) but the data shows this inequality widening over the last 40-odd years.

To put this into perspective – according to the Federal Reserve’s recent
data1 – overall wealth distribution by percentile group (from the top 0.1% to bottom-50%) has widened since 1989 - specifically with the middle-upper class (50-90% bracket) losing ground.

A graph showing the amount of wealth

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Again, this is just the structure of the current economic system unfortunately. And something that can’t be fixed easily.

But while the mainstream financial media argues over the minor causes to these problems. There’s a major issue that hardly anyone’s mentioned in the inequality argument. . .

And that is – ever since the 1980s – U.S. corporations have grown increasingly concentrated in every major sector of the economy (esp. post-2008).

Put plainly, we’ve seen a surge in rising oligopoly and monopoly powers.

  • An oligopoly is a state of limited competition, in which a market is shared by a small number of producers or sellers.

This has prevented competition; thus, adding to a cocktail of structural issues2 - such as: higher prices, lower wages, moral hazard, declining investment, fewer startups, and most importantly – less freedom.

 Let me explain. . .

Rising M&A and Declining Antitrust Enforcement – A Toxic Combination?

Competition has been the lifeblood of US corporate dynamism. It’s created wealth while leading to innovative products, lower prices for consumers, and high wages for workers.

But since the 1980s – businesses have been aggressively consolidating to gain market share. Thus limiting competition while leading to higher prices, lower wages, and declining quality.

So – what’s caused this reversal?

Well – there are a few reasons – but I believe these are two big factors:

First off – surging mergers-and-acquisitions (aka M&A) volumes (thanks in part to Federal Reserve ‘easy-money’ policies).

To put this into perspective: since the 1890’s (130 years ago) – there have been seven major M&A waves in the US. And yet roughly four out of the seven (60%) have occurred3 in just the last 40 years.

A graph showing the value of a wave

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Keep in mind that almost all M&A waves happen during stock market booms.

Why? Because higher share prices allowed firms to use their shares as currency – allowing them to buyout other firms easily.

Thus, Wall Street and bigger firms have benefited significantly from the Fed’s cheap-money agenda as decades of Fed easing have helped inflate asset prices and made debt financing very cheap.

Second off – declining federal antitrust enforcement.

For context: the Sherman Antitrust Act was passed in 1890 to essentially break up and prevent future monopolies. It was most known for breaking up John D. Rockefeller’s massive oil firm – Standard Oil – and J.B. Dukes’ tobacco monopoly – American Tobacco.

But ever since the 1980s ‘Reagan Revolution’ (aka the supply-side and free-market agenda promoted by President Ronald Reagan’s administration) – there’s been a steady shift in antitrust enforcement policy.

To put it simply: antitrust enforcement in the US has eroded4.

And even though this trend began with Reagan – there have been 32 years since with equal time shared between Republicans and Democrats in office. 

All of which have more-or-less allowed greater concentration to go unchallenged.

Thus – between lax antitrust enforcement and easy money fueling M&As – inequality has spread aggressively throughout corporate America.

Or – putting it another way - big companies have gotten bigger by absorbing competitors while smaller companies struggle to gain any market share.

This has led to firms dominating markets. . .

The Curious Case of Disappearing Public Companies

To put this into perspective – roughly half of all public companies vanished in the last 20-odd-years. And those that remain have gotten significantly bigger. . .

According to data from the SEC and World Bank – there were 8,090 publicly listed U.S. companies in 1996 with a market capitalization value of around $7.5 trillion.

A graph showing the market growth

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But by the end of 2018 – just 22 -years later – there were less than 4,400 public companies with a market capitalization value of over $30 trillion.

Now, unfortunately, the World Bank hasn’t updated the publicly traded U.S. stocks since 2019. So it may have increased since (some data5 shows as of Q1-2023 there are now 4,572 public companies). But my aim here is to show the multi-decade trend.

Thus – there’s been a nearly 50% decline in publicly-traded companies while the ones still around have grown roughly 400% more valuable (according to market capitalization).

·         In fact, as of June-2023, total U.S. market capitalization of public companies hit $46 trillion6 – more than 50% than 2019.

Now, please note this is just public companies. Not all U.S. companies (which would include private).

But another staggering example shows the significant concentration in the food retail market.

According to the USDA7 (as of 2019) - food retailing market concentration increased far more (458%) at the national level than at the state and county levels over the past three decades.

And although this isn’t simply public food retailers, the fear here is that if there’s too much concentration in food markets (like grocery stores), the companies can fix prices higher and wages lower as there’s less competition. Thus, leading to consumers being worse off.

But it doesn’t end there. . .

The number of new public firms being born via initial public offerings (aka IPO’s) has plunged during the same 20-year period – with the sharp increase in 2021 an outlier.

A graph of ipos

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All this shows – I believe – a worrying trend in the economy – which is an absence of new public firms being created while older firms are concentrated in fewer and fewer hands.

Now – it’s become clear at this point that the government isn’t just a passive bystander. But instead – actively participating in this concentration problem.

Keep in mind that most regulations are only really burdensome enough to affect small businesses8not big ones.

In fact, big business likely views regulation as an asset.

Why? Because it keeps out competition via raising barriers and costs of entry - meaning big firms use regulations as a way to help themselves only.

“It Pays To Lobby”: Big Business Loves Regulations That Insolate Them

Thus it shouldn’t come as a surprise that big firms have rapidly increased9 their ‘lobbying power’ (aka how much firms spend to sway politics) over the last few decades.

And it seems to have paid off handsomely. . .

For instance – according to the Harvard Business Review10 - political activity and regulations have played an increasingly large role in corporate profit margins and valuations since the 2000s.

Or put simply, more money goes towards lobbying rather than research and development (R&D) and other costs.

A graph of blue squares

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This implies that as industries grew more concentrated – each ‘lobby-dollar’ has had a greater return by preventing harmful regulations and instead encouraging beneficial ones - such as tax breaks, higher barriers of entry that reduce competition, etc.

Maybe this is why Warren Buffet has a track record for buying firms with monopoly powers. They set prices and effectively keep out competition.

So – as we’ve seen – further regulation appears to only amplify market powers and profits for the big companies while making barriers of entry higher and costs harsher for smaller firms (limiting competition).

This creates a vicious feedback loop: greater corporate concentration –> greater market share –> higher margins –> increased lobbying power –> more favorable regulations –> greater corporate concentration; repeat.

It’s times like these that it’s so important to remember the great Austrian economist – Ludwig Von Mises’ – words.

“Monopolies owe their origin not to a tendency imminent in a capitalist economy, but to governmental interventionist policies directed against free trade. . .”

I believe prices are the most mean-reverting thing in finance. If prices are too high, it attracts competition – which eventually lowers prices from the added supply and vice versa.

So if prices aren’t reverting, then something is artificially holding them up - such as government regulations keeping out competitors (giving big business pricing-powers).

Conclusion: Let’s Wrap This Up

So – in summary – over the last few decades (especially since 2000s), industries have grown increasingly concentrated.

For example – in the US alone – we’ve seen estimates show: 

·         70% of air travel is dominated by just five airlines.

·         Only two companies control 65% of the domestic beer market (by revenue).

·         The nation’s four largest railroads control 86% of all grain and oilseed traffic; a single railroad, BNSF, controls 47%.

·         The five big banks control over 60% of total banking assets. 

·         Only three health insurers dominate the nation. 

·         And roughly 75% of US households have only one option for internet.

And the list11 goes on and on. . .

This has led to a handful of companies having greater and greater market share while exerting their dominance via lobbying to keep out potential competition.

Now – keep in mind that big business itself isn’t necessarily ‘bad’ (many have done great things). But more often than not their size comes about through aggressive M&A’s and lobbying power. Both of which may have undermined the economy.

And this is just touching on a few variables. The topic is wildly complex and deep.

But the gist here is that as new firms are prevented from joining or older firms are absorbed – competition fades – thus leading to potentially anemic wages, higher prices, declining innovation, and weaker dynamism.

I believe all of these have helped widened wealth inequality steadily over the last 40 years.

And may continue to do so in the coming years.

The politicians sure do love their boo-koo bucks. . .

Book Recommendations:

1.       The Great Reversal: How America Gave up on Free Markets by Thomas Phillipon (2017)

2.       The Myth of Capitalism: Monopolies and the Death of Competition by Denise Hearn and Jonathan Tepper (2018)


1.     The Fed - Distribution: Distribution of Household Wealth in the U.S. since 1989 (

2.     America Has an Oligopoly Problem | Maryland Smith (

3.     JRFM | Free Full-Text | Review of the Literature on Merger Waves (

4.     TSP/Vanguard Smart Investor - Monopolies Rule (

5.     Why Has the Number of Public Companies Declined? - Blue Trust

6.     U.S. Stock Market Total Market Value | Siblis Research

7.     USDA ERS - Chart Detail

8.     How Regulations at Every Level Hold Back Small Business | U.S. Chamber of Commerce (

9.     Total lobbying spending U.S. 2022 | Statista

10.   Lobbyists Are Behind the Rise in Corporate Profits (

11.   Monopoly by the Numbers — Open Markets Institute


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