The Profit Paradox: How Thriving Firms Threaten the Future of Work

The Profit Paradox explains how a few companies have exploited an unbridled rise in market power to set prices higher than they could in a properly functioning competitive marketplace, leading to stagnant wages, rising prices, and limited social mobility. It offers concrete solutions for fixing the problem and restoring a healthy economy.

Format: Paperback / softback
Length: 352 pages
Publication date: 25 October 2022
Publisher: Princeton University Press

In an era of technological progress and easy communication, it might seem reasonable to assume that the world's working people have never had it so good. However, wages are stagnant, and prices are rising, so that everything from a bottle of beer to a prosthetic hip costs more. Economist Jan Eeckhout shows how this is due to a small number of companies exploiting an unbridled rise in market power, the ability to set prices higher than they could in a properly functioning competitive marketplace. Drawing on his own groundbreaking research and telling the stories of common workers throughout, he demonstrates how market power has suffocated the world of work and how, without better mechanisms to ensure competition, it could lead to disastrous market corrections and political turmoil.

The Profit Paradox describes how, over the past forty years, a handful of companies have reaped most of the rewards of technological advancements—acquiring rivals, securing huge profits, and creating brutally unequal outcomes for workers. Instead of passing on the benefits of better technologies to consumers through lower prices, these "superstar" companies leverage new technologies to charge even higher prices. The consequences are already immense, from unnecessarily high prices for virtually everything to fewer startups that can compete, to rising inequality and stagnating wages for most workers, to severely limited social mobility.

A provocative investigation into how market power hurts average working people, The Profit Paradox also offers concrete solutions for fixing the problem and restoring a healthy economy.

Weight: 306g
Dimension: 134 x 203 x 28 (mm)
ISBN-13: 9780691224299