Editor’s note: Adapted and condensed from a Noahpinion column.
1. Are we mistaken about antitrust?
In the 2000s–2010s the U.S. experienced slow growth, weak business investment, low dynamism, and rising national corporate concentration. Many economists linked concentration to weaker growth, energizing a renewed antitrust agenda. New research complicates that diagnosis.
Albrecht and Decker (2025) find no industry-level relationship between price markups (a common proxy for monopoly power) and business dynamism; higher markups even modestly correlate with more firm entry. Creanza (2025) studies the Great Merger Wave of 1895–1904 and reports that consolidation increased major corporate R&D and raised breakthrough rates (13% overall, 30% in science-led fields) by enabling large firms to support industrial research labs. These findings echo older theories (Galbraith, Schumpeter, Baumol) that some market power can finance costly R&D and spur innovation when competition remains.
AI is a contemporary example: Google, Meta, and Microsoft — big, profitable firms with network effects — have been central to recent foundational AI advances. Their concentration makes them targets of neo-Brandeisian antitrust critics, but it’s plausible that without such concentrated resources the current AI boom would be smaller. The antitrust push of the last decade may have underweighted these tradeoffs between concentration and the capacity to fund long-term, expensive innovation.
2. A concern about passive investing
Passive index funds displaced active managers by cheaply delivering market returns. But if everyone indexes, who does the research and stewardship? Concerns have long included governance risks and reduced competition when a few asset managers hold large stakes.
Kontz and Hanson (2025) add another theoretical worry: widespread indexing raises correlations among stocks, increasing systematic risk (beta). Higher perceived risk can lower valuations, making equity financing more expensive and potentially dampening real corporate investment. Empirically, passive investing has risen since the mid-1990s while corporate borrowing costs fell through 2021—likely driven by low interest rates and other capital inflows—so indexing probably isn’t the dominant explanation for recent weakness in investment. Still, the channel from indexing to higher correlations and underinvestment is plausible and worth watching.
3. Export controls on China appear to slow progress
High-profile debates about Nvidia’s Blackwell chips and U.S. export refusals raised the familiar critique that controls only accelerate China’s self-sufficiency: deny Western tech and China will build its own supply chain. That argument understates how controls can hinder progress in practice.
Evidence indicates export restrictions are delaying China’s near-term advances in semiconductors and AI. China has struggled to replicate ASML’s advanced lithography tools; reported reverse-engineering attempts have failed or damaged machines. SMIC’s movement to advanced nodes seems stalled, and firms such as Huawei have faced yield and production problems, leading some Chinese actors to downplay the immediate necessity of the most advanced nodes. Chinese AI engineers and executives openly acknowledge that export limits constrain their capabilities.
The intent of export controls is not to permanently destroy China’s tech sectors but to slow them, preserve U.S. technological lead longer, and reduce short-term strategic risks. The policy judgment here is to keep—and where appropriate, tighten—controls that genuinely impede adversaries’ rapid progress.
4. A simple fix for Japan’s overtourism
Japan’s surge in tourism has boosted revenues but strained infrastructure and created overcrowding in hotspots like Kyoto and parts of Tokyo. Cutting tourism wholesale would harm local economies, so policy should instead price the congestion externality.
Kyoto’s recent accommodation tax—up to 10,000 yen per person per night on expensive stays—is a straightforward Pigouvian response. Practical refinements make it more effective: exempt domestic business travelers (for example, apply the full levy only to foreign-card bookings), coordinate fees across regions so tourists shift toward welcoming, less-crowded areas (Osaka, Nagoya, and other prefectures), and use proceeds to improve local infrastructure and distribute benefits to communities bearing the costs. Region-specific lodging fees can reduce peak congestion, raise revenue, and steer visitors to places that want more tourists.
5. Selective immigration’s impact on group outcomes
Ru, Kaushal, and Muchomba show that the recent narrowing of Black–White earnings gaps is driven in large part by highly selective immigration from Africa. First-generation Black immigrants earn about the same as native Black Americans, but the second generation—children of immigrants—achieve parity with White Americans, largely because of high educational attainment.
This demonstrates that selective immigration matters: immigrant families who emphasize education can substantially improve group outcomes across generations. Fears that immigrant groups will simply “assimilate down” appear overstated for this population. The results also imply that policies intended to address long-standing disadvantage should be carefully targeted: broadly race-based programs may disproportionately benefit children of highly selected immigrants rather than descendants of slavery (ADOS), who continue to face the deepest, persistent disadvantages.
Taken together, these five threads suggest nuance: big firms can both concentrate power and fund costly innovation; passivity in markets creates new systemic risks even if it’s not the main cause of recent investment trends; export controls can be effective as delaying tools; modest, well-designed pricing can manage overtourism; and immigration policy and social programs must consider selection effects to reach those most in need.
