MONOPOLY

Big business in manufacturing (in the past) and, more recently, giants in the Internet and distribution industry have attracted the attention of both policymakers and economists because of, among other factors, their power to distort competition and to impose conditions on consumers. Market power is therefore a key concept in economics and a central, maybe unwelcome, presence in the economy. On these bases it would be logical to expect full attention to have been paid to the history of this concept and of its causes. But in fact, a gap in the literature seems to exist, and this book aims to fill it. The author’s choice is to do so by looking at the work of four major Italian economists: Vilfredo Pareto, Maffeo Pantaleoni, Antonio De Viti de Marco, and Enrico Barone. In so doing, the book takes on multiple tasks: not only to look for the roots of ideas on market power and competition but also to define these relevant figures and to explore and highlight their more general contribution to the development of economic ideas and to policymaking. The book is organized in five main chapters, completed by an introduction and a final section with some general conclusions. The introduction properly paves the way for the following analysis, putting the reader in the best position to navigate the volume and appreciate the logic behind the connections among the various parts of the book. In the first chapter the author sets the scene for an in-depth analysis of the work of the four Italian economists who are the protagonists of the book by reviewing, with a historical approach, the literature(s) engaging with the concept of monopoly power. Given the complex nature of this idea, the chapter moves along four different paths: the history of formal models of profit maximization under imperfect competition; the history of competition policy; the theory of competition; and the definition of the concept of entry barriers. The following chapter (chapter 2) deals more directly with the contribution by the Italian marginalists, focusing on what looks like one side of the debate on market power: the issue of competition and the conditions that might make it less than perfect. In this, a fundamental distinction is made between “static” lack of competition—resulting from structural barriers to the free movement of actors in the market —and “dynamic” (temporary) situations of limited competition caused by innovations and other factors, a theme central to the so-called classical school of economic thought, too. The view, stressed by Italian Book Reviews / 879