The Curse of Bigness: Antitrust in the New Gilded Age

by Tim Wu

Concentrated industries have good reasons to invest political influence. Consider, by contrast, the problem of collective action that faces “the middle class,” a large group with some 100 million members. A middle-class tax cut might save each member $500 a year. However, it might also require someone to invest $50 million to lobby and ensure passage of that tax cut. As the math makes clear, there is no individual member of the middle class that has the incentive to make that investment. Even if it were just a $20 million lobbying price tag, there would still be no investment. This is the problem of collective action, and it predicts that large groups—the majority—will often be losers in the legislative process.

Great point