What high ownership concentration means for the economy
Questions remain about barriers to entry, propensity to innovate and rates of reinvestment
The intensity of the debate about the suitable economic model for SA has hit fever pitch, and the fact that most of the population is excluded from meaningful participation in the economy is adding fuel to the fire. A key question is whether there is excessive concentration in the economy and whether it is ultimately at the expense of economic growth and employment. It is in this context that "monopoly capital" has entered the national discourse. The word "white" has since been added to give it strong political overtones, although former president Thabo Mbeki has warned against the use of "white monopoly capital" as "an abuse of a phrase which was used in scientific economic literature". Monopoly capital deals with, among other things, the abuse of market power to maintain high prices, the propensity to underinvest and the creation of artificial high barriers to entry, thereby keeping innovation and new competitors out. We reviewed some of the consumer-facing sectors represented on ...
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