The Great Revealing: Taking Competition in America and Europe Seriously
GAICIL Insights
Thomas Philippon’s The Great Reversal claimed that America now has less competition than the EU. This report challenges that thesis and argues that reports of the death of American competition are highly exaggerated.
It finds that U.S. antitrust remains effective while EU competition policy has failed to stimulate innovation, productivity or growth. The comparison is central to whether the US should import European approaches to AI.
Abstract
With its provocative claim that America now has less economic competition than the EU, Thomas Philippon’s book The Great Reversal has become a bible for neo-Brandeisians. But reports of the death of competition in America are highly exaggerated: While U.S. antitrust remains effective, EU competition policy has failed to stimulate innovation, productivity, or growth.1
Conclusion
Antitrust populists have long argued that the United States should aspire to Europe’s small business structure. While advocates for a more European approach to antitrust assert that their proposals would improve economic conditions in the United States, economic evidence suggests otherwise.
American productivity has long been superior to that of Western European countries, and the gap between the two is widening rather than narrowing. And that productivity gap may be due to America’s tolerance for big corporations. As we have shown, increased market concentration is associated with increased levels of productivity, investment, and innovation.
Takeaway: While U.S. antitrust remains effective, EU competition policy has failed to stimulate innovation, productivity, or growth.
Conclusion quoted verbatim from the report.
Notes
- Hadi Houalla & Aurelien Portuese, The Great Revealing: Taking Competition in America and Europe Seriously (Info. Tech. & Innovation Found., May 15, 2023), https://itif.org/publications/2023/05/15/the-great-revealing-taking-competition-in-america-and-europe-seriously/. Summary quoted verbatim from the ITIF publication page, https://itif.org/publications/2023/05/15/the-great-revealing-taking-competition-in-america-and-europe-seriously/. ↩
Cite as: Hadi Houalla & Aurelien Portuese, The Great Revealing: Taking Competition in America and Europe Seriously (Info. Tech. & Innovation Found., May 15, 2023), https://itif.org/publications/2023/05/15/the-great-revealing-taking-competition-in-america-and-europe-seriously/
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