To understand corporate power, we have to measure it. Economists use various metrics to track concentration, the most common being the Herfindahl-Hirschman Index (HHI). The HHI calculates the market share of the top firms in an industry; a higher number indicates a more concentrated, less competitive market.
Across almost every sector of the U.S. economy—from agriculture and airlines to tech and finance—concentration has risen sharply over the last forty years. In some industries the top four companies hold most of the market; in beef packing, for example, four firms handle about 85% of the cattle slaughtered (USDA).
This isn’t just a theoretical concern. High concentration is empirically linked to higher prices for consumers, lower wages for workers, and less innovation. When companies don’t have to compete, they don’t have to improve.
Measuring concentration in the digital economy is particularly tricky. Traditional metrics rely on revenue or unit sales, but how do you measure the market share of a “free” search engine? Regulators are increasingly looking at metrics like “time spent” and “data accumulation” to understand the true scale of digital monopolies.
When reading economic reports or news about mergers, look for the concentration data. If an industry is already highly concentrated, allowing another major merger is almost guaranteed to harm consumers and workers. The data provides the objective basis for demanding stronger antitrust enforcement.