Capitalism cannot be reconciled with the market power of some companies. So says the economist Edin Mujagic. ‘Real competition is not a structural thing there.’ Mujagic responds to reports that the Dutch Consumers and Markets Authority (ACM) is investigating the tariffs of some major energy suppliers. “You just don’t.”
“Apparently there is a suspicion that illegal price agreements have been made. If you start looking at how prices are set, you don’t just do that.’ According to Mujagic, there is no industry that doesn’t have a history of illegal price fixing. This, and the market power that some companies acquire with it, conflicts with free market forces and capitalism. And that’s disastrous for a macroeconomy in the long run – after all, economic growth is driven by innovation, and those with market power have no intention of innovating.
podcasts | Macro with Boot and Mujagić
Influence of the price ceiling
‘Gas and electricity prices are close to the maximum price set by the government. Is it a coincidence or is there something else? I don’t know, but it’s a coincidence.” According to Mujagic, companies should split when market forces impede them. As a bad example, he gives the tech sector where innovative companies are bought by big tech giants and then “calt gestellt”.
‘The competition is over. This is bad news for the macroeconomy, because economic growth comes from innovation.
ACM’s investigation focuses on the energy tariffs of the three largest suppliers: Eneco, Essent and Vattenfall. The regulator wants to see if these companies charge reasonable energy rates and has therefore carried out “company visits”. However, it is emphasized that there are no suspicions of any illegal activity yet.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
