Monopsony & Profits

Ezra Klein has an interesting post on monopsony, especially if you read the comments and follow the links. But there is a tone underlying a lot of the thinking which reflects a common unfortunate perspective. Some people don’t like to see big corporate profits. This may have to do with some image of corporate fat cats lounging on yachts lighting their cigars with hundred dollar bills. Even if this were a true picture, it is a tiny fraction of the story. Most corporations use their profits in two ways: to expand the business and to pay shareholders. Do we want to encourage policies that reduce business expansion and shareholder rewards? Do we not want better products and services? Do we not want better access to the things we desire? Do we not want to encourage investment in things which will improve our lives?

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