My Intellectual History of Monopsony

In honor of the release of the second paper I've cowritten with Jose Azar and Iona Marinescu [writeup here], and the growing academic and political interest in labor market monopsony, I recently did a tweetstorm on how I got interested in antitrust, and specifically labor market monopsony as a potential violation of the antitrust laws. This post is meant to store all the links from that tweetstorm, and the basic narrative, in one place.

1. A blog post I did about the search-and-matching labor market models in which I was trained in graduate school--which are valuable mostly because they at least leave room for the possibility that the labor market is monopsonized, unlike most mathematical representations of the labor market.

2. My 2016 paper with Mike Konczal about declining labor market mobility, business dynamism, and entrepreneurship--which we propose is a demand-side phenomenon reflecting market power on the part of employers, thanks in part to the shareholder revolution in corporate governance.

3. My articles with Bernard Weisberger about the intellectual history of progressive economics.

• Richard Ely and the founding of the American Economic Association.
• A first treatment of the criticism of Ely and progressive economists found in the book Illiberal Reformers by Thomas Leonard.
• A longer review of Illiberal Reformers in the Journal of Economic Literature.
• A response on this blog to the "review of a review" written by Nicola Giocoli.

4. A 2016 article I wrote in the American Prospect about an antitrust suit against Uber for fixing wages and prices among its drivers--my first public writing on antitrust. Following an adverse ruling by the 2nd Circuit Court of Appeals, the district court recently sent the case to arbitration, likely ending it. In addition to the regulatory black hole into which Uber drivers have fallen, the perversion of the arbitration process has deprived them of any and all recourse to enforce the law against their non-employer employer. The whole saga makes it quite clear that when it comes to worker protections, we're back to the early 1890s--including because the federal government cares more about enforcing the Sherman Act against Uber drivers bargaining collectively than it does about enforcing it against the actual monopolist involved: Uber.

5. My second foray on antitrust and first on the website ProMarket: an entry in the debate about whether antitrust has a role to play in the "inequality debate," building on the Uber piece. The crucial issue is the "consumer welfare standard."

6. Later in 2016, the Council of Economic Advisors released a paper on monopsony, and I wrote a response to it on ProMarket. At the FTC Microeconomics conference in the fall of 2016, a panelk discussion addressed the matter but glossed over employer power to dwell on the non--issue of occupational licensing.

7. In the spring of 2017, I appeared on a congressional panel on antitrust and the labor market. Here are my prepared remarks.

8. I wrote yet *another* ProMarket article on how to enforce antitrust laws in the labor market, and spoke on the same theme at a Roosevelt Institute public event in September 2017.

9. In December 2017, my first paper on Labor Market Concentration with Ioana and Jose was released. Here's a blog post discussing the paper on Roosevelt's website. That paper received a good deal of coverage in the popular press: in the New York Times, Slate, the Economist, Bloomberg View, the Nation, and elsewhere. It was also cited in several other papers about antitrust enforcement in the labor market, as well as an op/ed by Alan Krueger and Eric Posner. Since we released ours, Benmelech, Bergman, and Kim released their paper documenting labor market concentration in manufacturing over a much longer time horizon.

In short, it's heartening to see so much interest in monopsony, including in Congress, in the press, among academics, and the general zeitgeist. It's a big problem. And recognizing that implicates even larger issues about how the economy works that tend to make it quite difficult to adhere to conventional economic wisdom, at least as it's existed for the last several decades.