I was once a stock analyst at Morningstar, where the Warren Buffett-inspired approach begins with analyzing a company’s competitive position, and assigning a “moat” rating to it. A castle with a protective moat around it is Buffett’s metaphor indicating a company that is protected from competition. Superior technology, a name brand, a network effect, or high customer switching costs can all underpin moats.

But there are other sources of advantages in an economy where competition is supposed to keep them to a minimum. Companies can achieve special arrangements with government or influence legislation, entrenching their positions. The government can decline to enforce antitrust legislation, allowing mergers to occur until a few players dominate an industry. These sources of moats, especially the failure of antitrust enforcement, are the nefarious hallmark of today’s economy, according to Jonathan Tepper and Denise Hearn in “The Myth of Capitalism: Monopolies and the Death of Competition.” (John Wiley & Sons).

In their disturbing tour through the economy, Tepper and Hearn show that consumers and workers must contend with oligopoly, duopoly, and monopoly structures in many industries. Companies immune from competition enjoy prodigious profit margins and returns on invested capital, resulting from their abilities to charge customers more and more for their goods and services and to pay less and less to suppliers and labor.

Drug companies, for example, live off patents, and adjust chemical formulae to extend those protections indefinitely. Online advertising is owned by Google GOOGL, +1.23% and Facebook FB, +0.42% while Google has quashed or hampered businesses in “narrow search” such as Foundem and Yelp without punishment. Four airlines now control commercial air travel through dominance of local “fortress hubs,” where they squeeze out competitors with predatory pricing. Most consumers have one or two choices for Internet and cable TV service — a cable company, and sometimes a phone company. A few big banks control banking services in the country, and, after the financial crisis, have tacitly been deemed “too big to fail.” Despite the craft beer movement, mergers have allowed two beer makers, Molson Coors Brewing TAP, and Anheuser-Busch InBev BUD, +1.02% , to control the beer market. Health insurance companies carve up the country so that only a handful of them compete in each state. A few agriculture companies stand as brokers or distributors between farmers and processors, making many farmers servants of the distributors.

Even the seemingly mundane market for eyeglasses is marred by a lack of competition stemming from a failure of antitrust enforcement. Italian eyeglass manufacturer Luxottica has contracts with major designers, giving it nearly 50% of the U.S. frame market. It also owns large eyeglass retail outlets including LensCrafters, Sunglass Hut, Bright Eyes, Sunglass Icon, Pearle Vision, and the optical departments at Sears, Target, JC Penney, and Macy’s. All of this explains why a product that costs $30 to make can retail for 10 or 20 times that cost. Dissatisfied with its position, Luxottica had proposed a merger with French lens maker Essilor EL, -0.28% ESLOY, +1.03% , which owns 40% of the U.S. lens market, at the time this book went to press. The deal has since closed.

If anything, Tepper and Hearn are too gentle with Luxottica, choosing not to recount the firm’s bare-knuckles battle with sunglass maker Oakley . The struggle ended with Luxottica forcing the upstart manufacturer into a buyout after Luxottica first produced Oakley knockoffs and then threatened not to sell Oakley’s products in Sunglass Hut. But the authors move briskly for good reason: they are eager to expose the intellectual roots of antitrust enforcement failure since the 1980s. They lay responsibility for antitrust neglect at the feet of Robert Bork, Milton Friedman, and the Chicago School of Economics.

Antitrust enforcement smacked of too much government involvement in the economy for Friedman and other influential members of the University of Chicago Economics Department. They didn’t think monopolies could exist if all regulation and intervention — including antitrust intervention — were removed. The Chicago economists somehow forgot this line from Adam Smith that Tepper and Hearn quote early in the book: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

In the 1960s, Bork, a judge and law professor before he became a Supreme Court nominee, published a series of articles decrying antitrust interference and defending “consumer welfare,” which he defined as low prices that large, dominant companies could deliver. Antitrust policy protected small players in fragmented industries, and prevented the development of cost efficiencies, Bork argued.

It’s true that size can benefit consumers sometimes; Walmart WMT, +0.91% , for example, squeezes suppliers and streamlines logistics to deliver goods at rock-bottom prices. A fragmented telecommunications industry likely wouldn’t be able to achieve the economic might to construct large networks of cables and equipment. Unfortunately, Walmart’s employees are poorly paid, and the behemoth retailer has driven suppliers into bankruptcy.

Bork, Friedman, and the Chicago School have been wildly successful. Although antitrust enforcement went overboard in the 1970s in preventing mergers between companies that wouldn’t have stifled competition, for two generations now the Federal Trade Commission and Justice Department attorneys charged with reviewing merger proposals seem not to have met a consolidation they didn’t like.

“ Unfettered capitalism tends toward consolidation and monopoly, and government intervention is required to maintain free competition ”

Tepper and Hearn take some pleasure in noting that Bork, renowned for interpreting the Constitution by sticking closely to the text, conjured the standard of consumer welfare without any textual assistance. It’s a fair point, but they have their inconsistencies too. In seeking a return to a more vigorous antitrust regime, they are acknowledging that a powerful government is necessary to maintain competition. Tepper and Hearn want more freedom and more competition — more capitalism — but those things may not maintain themselves organically. Their evidence supports the proposition that unfettered capitalism tends toward consolidation and monopoly, and government intervention is required to maintain free competition.

Also, there may be a strange feature of internet companies that allows them to construct wider, more durable moats than companies in the past. Google, Amazon.com AMZN, +1.69% , and Facebook benefit from the “network effect.” If you want to be connected on a social network, you have to join the one that everyone else is on. It’s the nature of a network that there aren’t competitors; it’s a winner-take-all kind of business. As Tepper and Hearn put it, “The power of platforms makes them a different class of companies. They set the rules that govern their world. We simply live in it.” Renewed antitrust enforcement can break up Luxottica, or prevent companies like it from achieving their current advantages in the first place. But some of today’s competitive advantages may be resistant to renewed antitrust enforcement.

Still, even if investment analysts seeking moats under the influence of Warren Buffett will remain busy, Tepper and Hearn have struck a blow against the orthodoxy that has dominated thinking on antitrust for decades. In the process, they have identified a major cause of increasing wealth and income inequality, middle-class wage stagnation, and flagging productivity. Without knowing the details that Tepper and Hearn recount, many people sense the economy isn’t working for them. And their frustration is finding political expression.

John Coumarianos, a former Morningstar analyst, is a writer in Houston.

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