By Jonathan Tepper (with Denise Hearn)
Capitalism is the greatest economic system in history. It has lifted people from poverty and created widespread wealth for billions of people. Unfortunately, the so-called capitalism that exists in today's United States is the antithesis of a competitive marketplace. Monopolies and oligopolies dominate the economy, with a few winners and millions of losers.The Myth of Capitalism explains how we got to this state and clearly points the way back to open markets that work for everyone. It tackles the big questions of:
- Why is the US becoming a more unequal society?
- Why is economic growth anemic despite trillions of dollars of federal debt and money printing?
- Why has the number of start-ups declined?
- Why are workers losing out?
The Myth of Capitalism tells the story of how America has gone from an open, competitive marketplace to an economy where a few very powerful companies dominate key industries that affect our daily lives. Digital monopolies like Google, Facebook and Amazon act as gatekeepers to the digital world. Amazon is capturing almost all online shopping dollars. Capitalism without competition is not capitalism, but in industry after industry, competition is dying. Consider these facts:
- Four airlines dominate airline traffic, often enjoying local monopolies or duopolies in their regional hubs
- Two corporations control 90% of the beer Americans drink
- Five banks control over half of the country's banking assets
- More than 75% of households with high-speed Internet access are serviced by a single provider
- Many states have health insurance markets where the top two insurers have an 80-90% market share
- Many hospitals are local monopolies, and drug companies have monopolies through patents that are endlessly extended
We have the illusion of choice, but for most critical decisions, we have only one or two companies, when it comes to high speed Internet, health insurance, medical care, mortgage title insurance, social networks, Internet searches, or even consumer goods like toothpaste.
The Myth of Capitalism is the story of industrial concentration, but it matters to everyone, because the stakes could not be higher. Every day, the average American transfers a little of their pay check to monopolists and oligopolists. Without competition, everyone suffers. Giant corporations squeeze workers' wages. Companies grow fat with record profits, sending trillions to the wealthiest. Unjust inequality rises. Dominant monopolies choke startups and manipulate markets to their advantage. Voters feel that markets are rigged, and populist politicians triumph. A truly competitive system prevents unjust inequality, averts price gouging, fosters economic growth, and encourages startups.
The solution is vigorous anti-trust enforcement to return America to a period where competition created higher economic growth, more jobs, higher wages and a level playing field for all. The Myth of Capitalism bridges the gap between the left and the right. The authors are unabashedly pro-competition, not pro-big business. Big business is not bad, but too often size has come through mergers that have subverted capitalism. The proposed solutions offer a path back to higher economic growth, more jobs, higher wages, and a level playing field for all.
"In the era of the Too-Big-to-Fail banks and corporations, the lessons of The myth of capitalism are more important than ever. They expose the façade of the post-recession 'economic recovery' for what it is: stock buybacks and mergers puffing up the economy. Everyone and everything from workers, consumers, people with medical conditions, startups and the IRS suffer from the corruption of American capitalism. Tepper and Hearn frame their central thesis with liberal ideals and arguments (protecting the consumer, income inequality, maintaining government independence from corporate influence), as well as conservative (market competitiveness, cutting red tape for small business, low consumer prices). A lot is written about the thoughts of Hayek and Friedman, but also leftists like FDR and Marx. The final chapter offers some solutions to the problems of our times, but they’re pretty predictable if you’ve been reading along the whole way. Page after page of charts succinctly illustrate the points T&H make about trust-busting, the corrosiveness of the lobbyist class, the benefits of competitive markets, and livings standards for people on Main Street. The myth of capitalism is a very readable, even-handed and informative primer for anyone questioning whether or not they’re being gas lighted by the nonstop barrage of praise for the economy by the oligopolistic mainstream media."
Videos on The Myth of Capitalism
An 8-minute interview by RealVision, a medium for "investors to share their thoughts about what’s happening in today's markets. Think: TED Talks for Finance":
More time? Watch this 32-minute talk by Tepper, produced by the same organisation, or see this 65-minute recording of talks and a panel discussion by Town Hall Seattle, with both Jonathan Tepper and Denise Hearn.
- "Competition Is Dying, and Taking Capitalism With It" - excerpt of the book published by Tepper on Bloomberg.com
- "American Corporations Are Winning Their War on Capitalism" - second excerpt by Tepper on Bloomberg.com
- Website on the book maintained by the authors, including a list of their favorite research publications.
Table of Contents of The Myth of Capitalism
- Chapter One: Where Buffett and Silicon Valley Billionaires Agree
- Chapter Two: Dividing Up the Turf
- Chapter Three: What Monopolies and King Kong Have in Common
- Chapter Four: Squeezing the Worker
- Chapter Five: Silicon Valley Throws Some Shade
- Chapter Six: Toll Roads and Robber Barons
- Chapter Seven: What Trusts and Nazis Had in Common
- Chapter Eight: Regulation and Chemotherapy
- Chapter Nine: Morganizing America
- Chapter Ten: The Missing Piece of the Puzzle
- Conclusion: Economic and Political Freedom
About Jonathan Tepper and Denise Hearn
Jonathan Tepper is a founder of Variant Perception, a macroeconomic research group that caters to asset managers. Occasionally, he writes books. Earlier in his career, Jonathan worked as an equity analyst at SAC Capital and as a Vice President in proprietary trading at Bank of America. With his friend and partner Turi Munthe, they founded Demotix, a citizen-journalism website and photo agency. He earned a BA with Highest Honors in History and Honors in Economics from the University of North Carolina at Chapel Hill, and a M.Litt. in Modern History from Oxford University. Jonathan is a Rhodes Scholar and is Chairman of the Rhodes Scholars in Britain.
Denise Hearn is Head of Business Development at Variant Perception - a global macroeconomic research and investment strategy firm. She has an MBA from the Oxford Saïd Business School, where she co-chaired the Social Impact Oxford Business Network, and a BA in International Studies from Baylor University. Denise has always been interested in human flourishing. She has managed a variety of projects in this vein including: building new impact investment models in Canada, presenting to over 50,000 people while designing nationwide educational curriculum, and helping to create the world’s first Trustmark for Sharing Economy companies in the UK.