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The Problem of Bigness: From Standard Oil to Google

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  • Lamoreaux, N.
Abstract
This essay sets recent expressions of alarm about the monopoly power of technology giants like Google and Amazon in the long history of Americans’ response to big business. It argues that we cannot understand that history unless we realize that Americans have always been concerned about the political and economic dangers of bigness, not just the threat of high prices. The problem policy makers faced after the rise of Standard Oil was how to protect society against those dangers without punishing firms that grew large because they were innovative. The antitrust regime put in place in the early twentieth century managed this balancing act by focusing on large firms’ conduct toward competitors and banning practices that were anticompetitive or exclusionary. Maintaining this balance was difficult, however, and it gave way over time—first to a preoccupation with market power during the post-World War II period, and then to a fixation on consumer welfare in the late twentieth century. Refocusing policy on large firms’ conduct would do much to address current fears about bigness without penalizing firms whose market power comes from innovation.

Suggested Citation

  • Lamoreaux, N., 2019. "The Problem of Bigness: From Standard Oil to Google," Cambridge Working Papers in Economics 1963, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1963
    Note: nrl34
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    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1963.pdf
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    References listed on IDEAS

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    4. Kwon, Spencer Y. & Ma, Yueran & Zimmermann, Kaspar, 2022. "100 years of rising corporate concentration," SAFE Working Paper Series 359, Leibniz Institute for Financial Research SAFE.
    5. Poege, Felix, 2022. "Competition and Innovation: The Breakup of IG Farben," IZA Discussion Papers 15517, Institute of Labor Economics (IZA).
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    12. Babina, Tania & Barkai, Simcha & Jeffers, Jessica & Karger, Ezra & Volkova, Ekaterina, 2023. "Antitrust Enforcement Increases Economic Activity," HEC Research Papers Series 1488, HEC Paris.
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    18. Christian Reiner & Christian Bellak, 2023. "Hat die ökonomische Macht von Unternehmen in Österreich zugenommen? Teil 1," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 49(1), pages 21-59.
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    20. Randall G. Holcombe, 2022. "Creative destruction: getting ahead and staying ahead in a capitalist economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(4), pages 467-480, December.

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