26 Pages Posted: 17 Jul 2017

There are 3 versions of this paper

Date Written: July 2017

Abstract

Neoclassical theory assumes that firms have no power of fiat any different from ordinary market contracting, thus a fortiori no power to influence the rules of the game. In the real world, firms have such power. I argue that the more firms have market power, the more they have both the ability and the need to gain political power. Thus, market concentration can easily lead to a Medici vicious circle, where money is used to get political power and political power is used to make money.