Forget China, the biggest threat to the US economy is the rise of its ‘oligarchs’ and ‘robber barons’

The US-China trade war may be hogging the headlines, but the rise of “oligarchs” across many American industries is the primary culprit of the nation’s rampant inequality, the co-author of a new book said.

A wave of mergers and acquisitions has left sectors like airlines, retail and banking with heavy concentrations of power, allowing big business to set market prices, but also squeezing employment opportunities for citizens in the United States.

Large swathes of the economy are now dominated by “oligarchs” and “robber barons”, terms usually reserved for Russian tycoons and freewheeling, unscrupulous 19th century American industrialists, rather than corporate America, which claims to be “the bastion of free markets”.

Denise Hearn, co-author of The Myth of Capitalism: Monopolies and the Death of Competition, believes that more than offshoring to China, or the US-China trade war, the decline in competition is the biggest issue facing the US economy.

“We would contend that of course China entering the [World Trade Organisation] was an issue, but we don’t believe in mono-causal explanations,” Hearn said.

“Concentration [of corporate power] isn’t the only factor, but it is under appreciated in terms of how pervasive and pernicious it is, how it has slowed the economy in the US, hurt workers, hurt wages, and contributed to all of these societal issues.”

The central thesis of the book is that competition is dying in the US, and this is bad for the average consumer.