The Shortcomings of Concentration Ratios in the Conglomerate Age: New Sources and Uses of Corporate Power
The U.S. economy is continuing to evolve from a power-dispersed market system into a power-concentrated, administrative system, but that evolution goes on unnoticed by most mainstream economists.' The evolution has been marked by three major merger waves. The first wave involved primarily horizontal mergers; it crested at the turn of this century. The second wave swept over the economy in the 1920s and left behind it a structure of vertically integrated oligopolies dominating the economy's industrial core. This structure, the Galbraithian planned sector, has been in place now for over half a century.2 An investigator familiar with the evolution of this structure would expect standard concentration ratios to remain relatively stable since the Depression because the concentrated, planned sector was already largely in place by then. Nevertheless, investigators with a laissez-faire predisposition downplay the extent and significance of corporate power by pointing out that average census concentration ratios have not risen dramatically over the last several decades. This