Competition Paradox: Political Origins of Market Structures in US, EU, and China

Twentieth-century history has taught us to imagine that competitive markets compliment democracies while closed markets serve authoritarian states. However, a glance at the global scene in the first quarter of the twenty-first century turns that assumption on its head, especially with regard to emerging high-tech industries. 

In his dissertation research Jingtian Chen, PhD candidate at the Massachusetts Institute of Technology, observes that the United States has a highly concentrated tech sector and a relatively democratic state, while China has a highly competitive tech sector and a relatively authoritarian state, and the European Union lies somewhere in between along both axes. Chen’s project is to determine why this seemingly paradoxical arrangement exists. Using collections held in the Hagley Library, Chen suggests that American business associations played pivotal roles in devising and promulgating trade policies that favored concentration. In contrast, the decentralized incentive structure of Chinese economic development encouraged the development of vibrant and competitive industries in new tech sectors like EVs and photovoltaics. 

In support of his work Chen received funding from the Center for the History of Business, Technology, and Society at the Hagley Museum and Library. For more information, and more Hagley History Hangouts, visit us online at hagley.org.

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