Responding to Reich, Part 9: The Corporate Concentration Theory of Inflation
Brian Albrecht, chief economist at ICLE, had his work cited in this Foundation for Economic Education article on the corporate concentration theory of inflation. Read the full article here.
The first and most important issue with the concentration theory is that inflation is a general phenomenon. Even if higher concentration explains price increases in certain industries, that hardly explains why prices are rising across the board. Economists Brian Albrecht and Alexander Salter stressed this point in a 2022 article for The Hill:
Inflation is a general economic phenomenon. It affects all markets at once. To explain rising inflation, then, you need to find a change in the basic economic environment. Antitrust, in contrast, deals with business conduct in a particular market. …Collusion, when it happens, does drive up prices… But that doesn’t explain the broad inflation of the entire market. For collusion to be the cause, it would require collusion in nearly every sector of the economy.