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In the News

Competition Policy - Biden signs anti-monopoly executive order

Geoff Riley

17th July 2021

“Capitalism without competition isn’t capitalism, it’s exploitation." said Joe Biden last week as an executive order was signed curbing the market power of a raft of businesses and sectors.

Many of the provisions in the executive are encouraged but not mandated, and would be more powerful if enacted into law. But among them is a provision for hearing aids to be sold over the counter and for pharmaceuticals to be imported from Canada at cheaper prices to help make the US market more contestable and lower prices for consumers.

It seems that the Biden administration has decided that the concentration of power in many sectors is increasingly operating against consumer interests.

In the long term, a decline in the intensity of competition as barriers to entry entrench the market power of large corporations, can have a negative effect on innovation and productivity - two key elements of long run aggregate supply.

There is plenty of economics to be devoured in the executive order statement itself which you can find here

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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