A presentation by James Bessen (Boston University). This event is part of the Digital Governance Research Colloquium hosted by the Centre for Digital Governance.
Historically, competition has powered progress under capitalism. Companies with productive new products rise to the top, but sooner or later, other companies come along with better innovations and disrupt the threat of monopoly. Dominant companies like Walmart, Citibank, and Google argue that this process of “creative destruction” prevents them from becoming too powerful or entrenched.
James Bessen's book argues that capitalist competition has fundamentally changed thanks to a new generation of information technology. Documenting how the threat of competition has sharply decreased over the last twenty years, this book describes the ways today’s corporate giants have come to power through the use of proprietary software systems, creating an unlevel playing field. This development has increased economic inequality and social division, slowed innovation, and allowed firms to evade government regulation. In the face of increasing calls to break up the largest companies, James argues that a better way to restore competitive balance and dynamism is to encourage or compel firms to share technology, data, and knowledge.
James Bessen, an economist and technologist, serves as Executive Director of the Technology & Policy Research Initiative at Boston University. He has also been a successful innovator and CEO of a software company. Bessen studies the major economic impacts of technology on society (see New York Times profile), writing academic papers, magazine articles, and books. His latest book, The New Goliaths (Yale 2022), argues that major firms’ investments in proprietary software systems have allowed them to increase their dominance of industries, slowing aggregate innovation and raising income inequality. Bessen’s work has been widely cited in the press as well as by the US White House and Supreme Court, the European Parliament, and the Federal Trade Commission.
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