"Efficient Markets" Converge to Inefficient Competitive/Economic Conditions . . . This obvious statement[for many] seems to get far too little study amongst economists and industry analysts.
Research seems to assume that with a bit of anti-anticompetitive efforts, industries-economies generally will arrive at efficient supply-demand conditions. However, most also seem to agree that the general level of concentration is rising:
- Within countries, the concentration of suppliers generally are increasing.
- In many cases, the concentration of customers has become extremely high.
- Cross-border expansion/imperialism and less vigilant markets have also allowed greater market power.
- Even technology such as e-commerce have offered tremendous advantages to scale (along with financial institutions, oil cos, agri-trading, content, etc.).
- And as previously discussed, the rise of command economies like China has had tremendous effect.
So Keynes, Sharpe/Markowitz/Miller, et. al. lived in a more efficient world. Industry/economy efforts to develop goals and judge results -- must focus on analyzing how increasing concentration in various industries and countries are distorting the convergence toward "true" efficient industrial and economic structures.
There are plenty of other things to worry about -- but underestimating the inefficiencies of increasing global market concentration would seem to be an increasingly important issue.
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