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Since the late 1990s, US industries have become more concentrated, profit margins have widened, and market leaders have become more entrenched, with less turnover at the top. The book argues this reflects weaker competition, not a surge of 'superstar' efficiency, because prices rose relative to Europe while investment and productivity growth did not rise alongside profits.
Concentration is benign when efficient firms grow by winning customers, so industry productivity rises and investment follows. It is harmful when incumbents protect their position through barriers, mergers, or regulation, so margins rise while productivity stagnates. The diagnostic is whether concentration moves together with productivity gains, and in most US industries after 2000 it did not.
EU markets became more competitive than US markets because EU institutions were built to be independent: member states, distrustful of each other's national champions, gave the European Commission strong, politically insulated authority over competition and state aid. US regulators, by contrast, grew more exposed to industry lobbying and adopted a permissive stance toward mergers and dominant firms.
US consumers pay considerably more for mobile service and broadband than consumers in France or Germany, where regulators pushed entry and a new low-cost carrier such as Free Mobile in France cut prices sharply. This shows how entry and contestability, rather than technology or demand, drive the prices households pay for the same service.
Corporate lobbying and campaign contributions in the US grew far faster than in Europe, and they target the rules that shape competition, including mergers, licensing, and regulatory barriers. Incumbents use political spending to raise barriers to entry, so market power and political power reinforce each other in a self-sustaining loop.
When firms face less competition, they raise markups and cut investment and hiring, which lowers the labor share and real wages even without any visible policy change. Seen this way, the high prices of everyday services such as airlines, telecom, and health care act as a regressive transfer from households to shareholders.