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- Title
MONOPOLY AND THE DISTRIBUTION OF WEALTH: REVISITED.
- Authors
Comanor, William S.; Smiley, Robert H.
- Abstract
This section presents a response by William H. Comanor and Robert H. Smiley to a commentary about their article Monopoly and the Distribution of Wealth which appeared in the May 1975 issue of the Quarterly Journal of Economics. We are indebted to Professor Thomas for his comments on our study. The issues raised do require further discussion and concern. Political officials have generally emphasized the distributional consequences of monopoly power, but these consequences have typically been ignored in the economic literature. Economists have traditionally been uncomfortable with distributional issues, where welfare judgments require interpersonal comparisons of utility. The allocation of resources and its implication for efficiency have long been the central focus of our attention. A first step toward a detailed examination of the distributive impact of monopoly was to obtain estimates of the relative magnitudes involved. Despite the arguments of political officials, there is a need to be assured that there is something here worth studying. In a study such as ours, where there is no direct optimizing model, but instead attempts to trace through the implication of monetary flows, conclusions depend directly on the underlying assumptions. A more important assumption deemed to be conservative was that the capital gains resulting from monopoly creation are distributed in proportion to the existing distribution of business ownership claims. Our task was to determine how much of the current degree of inequality in the distribution of household wealth was attributable to monopoly. This concern led us to focus on the upper tail of the size distribution of personal wealth, on households with net worth exceeding $100,000 in 1962, and to be less concerned with the remainder of the distribution.
- Subjects
MONOPOLIES; WEALTH; POLITICIANS; HYPOTHESIS; CARTELS; COMPETITIVE advantage in business
- Publication
Quarterly Journal of Economics, 1980, Vol 94, Issue 1, p195
- ISSN
0033-5533
- Publication type
Article
- DOI
10.2307/1884613