The Market Power of Technology: Understanding the Second Gilded Age 2/22
Since the 1980s, the United States has regressed to a level of economic inequality not seen since the Gilded Age in the late nineteenth century. Wharton Club members & guests are invited
MS statistics, Stanford; MA/PhD Economics, Yale
Joan Kenney Professor of Economics Emeritus, Stanford University
JRN'07, Senior reporter, Marketplace
Since the 1980s, the United States has regressed to a level of economic inequality not seen since the Gilded Age in the late nineteenth century. At the same time, technological innovation has transformed society, and a core priority of public policy has been promoting innovation. What is the relationship between economic inequality and technological change?
Mordecai Kurz introduces a comprehensive integrated theory of the dynamics of market power and income inequality. He shows that technological innovations are not simply sources of growth and progress: they sow the seeds of market power. In a free market economy with intellectual property rights, firms’ control over technology enables them to expand, attain monopoly power, and earn exorbitant profits. Competition among innovators does not eliminate market power because technological competition is different from standard competition; it results in only one or two winners. Kurz provides a pioneering analysis grounded on quantifying technological market power and its effects on inequality, innovation, and economic growth. He outlines what causes market power to rise and fall and details its macroeconomic and distributional consequences.
Kurz demonstrates that technological market power tends to rise with new innovations to extremely high levels, increasing inequality of income and wealth. Unchecked inequality threatens the foundations of democracy: public policy is the only counterbalancing force that can restrain corporate power, attain more egalitarian distribution of wealth, and make democracy compatible with capitalism. Kurz offers proposals to redress inequality by restricting corporate mergers and acquisitions, reforming patent law, improving the balance of power in the labor market, increasing taxation, promoting upward mobility, and stabilizing the middle class.
Time will be allocated for Q&A.Cosponsored by:
- Yale Club of Washington DC
"Starting with the simple idea that established firms can use their technological innovations to deter entry, Kurz constructs an account of the rise in wealth inequality in modern societies. Beautifully blending analytical reasoning with empirical evidence, the book offers a picture of contemporary macroeconomic growth and development that is at once novel and convincing. This is economics at its best" Sir Partha Dasgupta, University of Cambridge
Mordecai Kurz is Joan Kenney Professor of Economics Emeritus at Stanford University. He served as the economics director of Stanford’s Institute for Mathematical Studies in the Social Sciences from 1971 to 1989. He was a Guggenheim Fellow in 1977, a fellow of the Institute for Advanced Studies of the Hebrew University in Jerusalem in 1979, and has been a fellow of the Econometric Society since 1971. He served as a special economic advisor to President Carter’s Commission on Pension Policy in 1979.
His research work has covered a variety of problems in economic theory and policy. He has written extensively on growth theory, game theory, the formation of beliefs, and the effect of market power on inequality and growth, and he has worked on various policy projects.
His books include Public Investment, the Rate of Return, and Optimal Fiscal Policy (with Kenneth J. Arrow, 1970) and Endogenous Economic Fluctuations: Studies in the Theory of Rational Beliefs (1997), and he has published widely across many fields of economic theory.
Lily Jamali is a senior reporter covering business and the economy at American Public Media's Marketplace, airing on hundreds of NPR stations across the country. Prior to Marketplace, Lily spent three years as co-host and correspondent at KQED’s The California Report. While at KQED, she closely followed and routinely broke exclusive stories about PG&E’s bankruptcy. Lily has also worked as an anchor for Bloomberg TV Canada, reporter and producer at Reuters TV in New York and San Francisco, and as a freelance foreign correspondent in Central and South Asia, and Latin America.
Lily holds a Master’s degree from Columbia's Graduate School of Journalism, an M.B.A. in Finance from New York University’s Stern School of Business, and a Bachelor’s degree in English from UCLA. This year, she was part of the KQED/California Newsroom team honored as finalist for the Scripps Howard Award and an Investigative Reporters and Editors Award. Her investigations have won top honors from the Association of Business Writers (SABEW) and the Society of Professional Journalists NorCal chapter. She was also part of the KQED/California Newsroom team that won a regional Edward R. Murrow Award for continuing coverage.
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