Restoring competition in digital economy

The digital economy is carving out new divides between capital and labor, by allowing one company, or a small number of companies, to capture an increasingly large market share. With "superstar" companies operating globally, and dominating markets in multiple countries simultaneously, market concentration in G20 economies has increased considerably in the past 15 years.

To address this phenomenon, that is, to restore competition and reduce income inequality between capital and labor, the G20 should create a "World Competition Network". As a larger share of total income shifts to capital across many G20 countries, the World Competition Network would seek to reverse the decline in labor's share of GDP.

For a period after World War II, 70 percent of national GDP accounted for labor income, with the rest being capital income. John Maynard Keynes described the stability of the labor share as something of a "miracle". But the rule has since broken down. Between the mid-1980s and today, labor's share of world GDP declined to 58 percent, while that of capital rose to 42 percent.