The specter of monopolies is getting renewed attention in this age of Amazon and massive corporate mergers that once would have been unthinkable. Market concentration is being blamed for almost everything that is wrong today, from stagnating wages to the rise of fascism.

There are now fewer firms in the US economy since the 1980s, and they are big. The Council of Economic Advisors looked at the number of firms and their revenue in various industries and estimated that market concentration increased in 75% of industries since the 1990s. The dominance of a few firms conjures images of robber barons from the gilded age squeezing everyone from consumers to workers, enriching themselves in the process. But this is a new gilded age, powered by a more inter-connected and more global economy. As markets change, so might the ideal structure of companies. With that change comes a new understanding of monopoly power, and a reappraisal of its costs, and even possible benefits.

In the past, the answer to concentrations of corporate power was to break up firms. Some commentators and legal scholars think we need more trust-busting today. That solution worked well to fix the traditional problems like high prices and low wages, posed by monopolies. But if the problems are different, the solution might be too. Before we beat the anti-trust drum, it’s worth considering what damage, if any, monopolies are actually doing to the economy.

How bad is it?

The Open Markets Institute, an anti-monopoly think tank, released data this week showing an increase in market concentration in a wide range of US industries, from makers of dry cat food to adult websites. In many cases, a handful of firms control more than 50% of the markets. More neutral sources also estimate bigger firms are taking up a larger share of America’s economy.

In many markets for goods and services, there are fewer domestic producers. So instead of going to the local pharmacy, we now go to a chain store. There are fewer airlines, insurance companies, and companies that operate hospitals. In newer industries created by advances in technology there is also lots of concentration. We buy most of our books from Amazon, network socially on Facebook (which also owns Instagram), and have a cell phone contract with one of a few providers. But are we any worse for it?

Are we paying too much?

Traditionally, the problem with monopolies is they stick it to consumers. When there is only one or a few producers of a good, they can charge whatever they want, and we’ll have to buy it if we need it. However, while market concentration has increased since the 1980s, prices on many goods have not. There are fewer airlines, but the prices of flights (after we adjust for inflation) has fallen. Prices on many consumer goods, like washing machines, food, TVs, and electronics (once you control for quality) also became more affordable, even as there are fewer manufacturers. To some extent this is due to technology which allows customers to shop around and easily compare prices. But it’s also because of new advances in manufacturing which makes production more efficient, and increases trade which lowers the costs of production by expanding access to cheaper labor and materials.

Prices of some goods and services have come down, but perhaps we should be paying even less. A measure of monopoly power is price mark-ups, or how much profit a company earns for each good or service it sells. Since monopolies can’t be undercut by competition, they can charge whatever they like. A price that includes a mark-up far above the cost of production is a sign of monopoly power that hurts consumers. Goods might be cheaper because they are cheaper to produce and monopoly firms may still be charging us big mark-ups on top of those lower prices.

The economic literature is divided on the state of mark-ups. It is hard to know for certain because costs are hard to measure. One study found an increase in mark-ups since the 1980s that coincides with more market concentration. But other studies argue mark-ups have not increased once you account for things like marketing costs, which have become more expensive in an increasingly globally connected and competitive economy.

Are we being paid too little?

Another potential impact of monopolies is their pressure on wages. If there are only a few employers for their service, workers have less power to negotiate raises. Market concentration is often blamed for stagnating wages and more returns going to capital instead of labor. But the evidence is mixed over whether we can actually blame market concentration for slow wage growth. Some studies claim that the falling labor share is directly tied to more market concentration. But another study estimates that even if there are more large firms, employment concentration (the share of workers employed in a single firm) has not increased, and may have even decreased.

The discrepancy comes down to measurement. A study from the US Census estimates measured US market concentration going back to the 1970s and found it was at similar levels as today (the decline of market concentration beginning in the 1980s was mostly driven by more competition in the service industry, notably the break-up of AT&T.) But if you look at the local level, employment concentration decreased. For example, a local community may have only had a mom-and-pop general store as one of few employers in the area. Over time, as big companies like Walgreens and Walmart arrive, there are more potential employers at the local level, but because the mom-and-pop stores got out of business everywhere, we see more concentration on a national level. So whether or not market concentration helps or harms you depends on where you live.

Is there too little competition?

Big firms can also limit competition. It is harder for smaller firms to get a toe-hold in a market dominated by big players with deep pockets. It is true there are now fewer start-ups and less entrepreneurship, a trend that started in the 1980s and accelerated after 2000. But this may not be all bad if the global tech-driven world favors big firms, that need to spend more on marketing. Another study, from an economist at UC Berkeley, argues that much of today’s merger activity is due to firms wanting to be more efficient, rather than trying to drive their competitors out of business.

If the economy were less competitive, you’d expect firms would become less productive. The opposite is true. One study observed that firms that grew and came to dominate their industries were those that made better use of proprietary information technology (IT) systems. The paper found IT use is associated with bigger plant sizes, higher labor productivity, and bigger profits.

Jean Tirole, an economist who won the Nobel Prize for his work on market structure and anti-trust, points out that in a more data-driven economy, big technology firms can offer products and services that better serve their users when they have multiple product lines which enables them to leverage data across platforms. In tech, bigness is a distinct advantage.

Too little innovation?

Another concern is that less competition means less innovation. Innovation is expensive and risky for businesses and if big firms don’t have the next upstart nipping at their heels they may not feel a need to invest in new products. Indeed, there appears to be less money spent on research and development in big firms, but that does not mean there is less innovation in the economy.

Economist Jay Ritter argues that it is no longer economically viable for small firms to grow into big firms. It makes more sense for smaller, more agile firms to innovate and then be bought by big firms, which can take the products to market on a global scale. This is often how innovation works in the bio technology industry, where small start-ups come up with new treatments which are snapped up by big pharma.

Is market concentration just bad anyway?

We are naturally skeptical of outsized corporate power. There are good reasons to feel that way. Larger firms have more money which can translate into more political power to enrich their interests. There are certainly many reasons to be concerned about large technology firms, and whether they lack accountability and need to be regulated.

A more concentrated economy can also pose more risks if there is less diversity in the economy. If one firm flops or can’t keep up with foreign competition, the failure can take down a big share of the US economy. And there may be unintended consequences to more market concentration, with the costs things we are unaware of and can’t imagine because they’re unfolding in a new economy we still don’t understand.

This suggests, even if we should be worried about monopolies, the traditional anti-trust strategy of breaking up out-sized companies is not necessarily the right answer. These policies made sense when consumers paid too much and workers were paid too little. But today, there’s no clear evidence big firms are causing the big problems they once did.

Market concentration may cause new problems, however. Tirole warns we need the right regulations to solve these new problems, but old solutions could even make the problem worse by undermining how firms innovate and compete in the global market. If the problem is a few big, companies, the solution isn’t necessarily more smaller companies. After all, it is not clear the economy, or consumers, would be any better off with five different Facebooks.