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In the 1980s, when the US, as it does today, felt an economic competitor from the Far East breathing down its neck (Japan then, China now), the federal judge Robert Bork oversaw some hugely consequential changes to American competition and antitrust law. As Rana Foroohar observes in her latest column, Bork argued that as long as prices for consumers kept falling, the consolidation of large companies into near-monopolies posed no problem for competition.

The problem with the post-Bork competition law that now obtains in the US, Rana argues, is that mega-companies today no longer function like their predecessors. “Their products are often cheap or free,” she writes, “so consumer prices should not be the measure of competition,” In short, the regulatory architecture has failed to keep up with the evolution of what Rana calls the “superstar company”.

In a number of sectors, the concentration of market power among a handful of players has had a chilling effect on entrepreneurial energy, with a decline in the number of startups and a discernible, and much-discussed, slowing in the rate of innovation. The clustering of economic power has led to geographical clustering too, with talent and investment being attracted inexorably to a few cities, leaving other parts of the country to wither — with the political effects with which we are now all familiar. 

Democrats in the US flirted last week with the idea that Oprah Winfrey might be a plausible opponent for Donald Trump in the 2020 presidential election, But, Rana suggests, a superstar candidate is not going to be the answer to the problem of an economy distorted by the dominance of superstar companies. 

Getting the band back together
Wolfgang Münchau argues that the preliminary agreement for a grand coalition reached between Angela Merkel’s CDU and Martin Schulz’s Social Democrats presages the most decisive shift taken by Germany towards European integration since the Maastricht treaty more than a quarter of a century ago.

Heathrow headaches
Willie Walsh, chief executive of IAG, the parent company of British Airways, says that the Civil Aviation Authority, the UK’s airports regulator, is failing in its duty to keep a lid on the costs incurred in the expansion of Heathrow.

Russian roulette
Russia’s central bank, writes Andrey Movchan, has presided over a catastrophic hollowing out of the country’s banking system. A new supervisory authority is needed — and fast.

Best of the rest

How and why Britain might be asked to vote once more on Brexit — Andrew Rawnsley in The Observer 

Rages, scandal, chaos: it’s a normal White House — Niall Ferguson in The Sunday Times

How Donald Trump degrades us all — Masha Gessen in the New Yorker

Cashing In on Céline’s anti-Semitism — Agnes Poirier in the New York Review of Books

2018: the year of Europe — Thomas Piketty in Le Monde (in French)

What you’ve been saying

Why Dow’s rule remains relevant for changing markets— letter from Dr Frank Boll, Rotselaar, Belgium

Since the end of the crisis of 2007-09, world debt again grew explosively to 325 per cent of world gross domestic product at the end of 2016. This virtually guarantees that world growth, in a declining trend since 2009, will keep decreasing. Too much debt led to the 2000-03 and the 2007-09 crises. And even greater debt today will cause the next crisis, which will lead to even more deleveraging by households, companies and banks than before. That will make for less consumption, less investment and more saving, or a weakening of real growth and inflation, the guiding determinants of the long yield.”

Comment by Debater on Helen Lewis’s article Culture wars cross the Atlantic to coarsen British politics

“Identity politics has discouraged people from thinking in terms of general values and equally in terms of general interest. At its worst, identity politics is simply sharp-elbowed (and probably middle class) jostling for position and hence on the right of what used to be the old political spectrum but it presents itself as on the left. In the same way, those seeking tax cuts and other benefits for the rich present themselves as populists. The hardest thing for any politician now is to get people to think about the future and how everyone is affected by whichever path to the future we choose.”

Short-term considerations shunted railways off course— letter from Tom Brown, London, UK

The charge sheet against rail privatisation is lengthy and the truth is that the break-up of the unified system was a disastrous policy, which has raised the financial break-even point of the system, introduced legal complexity, and ongoing economic rent-extraction through the private leasing of rolling stock and franchising of services without meaningful risk-transfer to the private sector. British railways absorb hundreds of millions of revenue annually in intra- and extra-system contract, settlement and litigation costs. Rolling stock lessors are highly leveraged companies passing on to rail users a cost of capital 200 basis points or more above the rate at which a state-owned lessor would achieve.”

Today’s opinion

How to fix Russia’s broken banking system
The central bank is blind when it comes to oversight despite draconian regulations

For post-Brexit Britain to fly solo, Heathrow must be cheaper
The airport can get away with monopoly pricing because the regulator allows it to

Gavyn Davies’ blog: Ultra low market volatility — friend or foe?

A German coalition deal to radically reshape Europe
The preliminary agreement signals a shift to more agenda-driven EU politics

The rise of the superstar company
In the corporate economy, it is not gender or race that matters, but class

FT View

FT View: The irreversible rise of the investing machines
Automation, if it drives down costs, need not be something to fear

FT View: Keeping the Arab spring’s last hope alive
Tunisia needs help if it is to continue preserving democratic gains

The Big Read

The Big Read: Brexit and agriculture: British farmers to plough new course
The government faces a choice between recreating the bloc’s support for farmers or diversifying the rural economy

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