Oligopoly & [low] Productivity

From John Mauldin's newsletter - good for the productivity puzzle & concentration ratios:

A large and growing part of the economy is effectively “owned” by powerful monopolies or oligopolies that face little competition. They have no incentive to deliver better products at lower prices or to get more efficient. They simply rake in cash from people who have no choice but to hand it over. This would be impossible if we had true capitalism, at least as Adam Smith, et al., envisioned it. Even if we generously concede that some businesses really are natural monopolies, most aren’t. The industries we now see dominated by a handful of companies got that way because the incumbents found some non-capitalistic flaw to exploit. In theory, this problem should solve itself as technology and consumer preferences change the conditions that let the monopolies arise. Yet it isn’t happening. Axios outlined the problem in a recent article on farm bankruptcies. Across industries, the U.S. has become a country of monopolies. Three companies control about 80% of mobile telecoms. Three have 95% of credit cards. Four have 70% of airline flights within the U.S. Google handles 60% of search. The list goes on. (h/t The Economist) In agriculture, four companies control 66% of U.S. hogs slaughtered in 2015, 85% of the steer, and half the chickens, according to the Department of Agriculture. (h/t Open Markets Institute) Similarly, just four companies control 85% of U.S. corn seed sales, up from 60% in 2000, and 75% of soy bean seed, a jump from about half, the Agriculture Department says. Far larger than anyone — the American companies DowDuPont and Monsanto. As we have reported, some economists say this concentration of market power is gumming up the economy and is largely to blame for decades of flat wages and weak productivity growth.