Markets That Work

Why Strengthening Competition Policy Beats the Myth of Endless Overtime

In times of rising inflation, public debate often drifts toward a familiar narrative: people should simply work more. More hours, more output, more sacrifice. But this framing misses the real issue.

Inflation today is not primarily driven by a lack of effort—it is driven by structural inefficiencies, concentrated market power, and weakened competition.

When markets become dominated by a small number of firms, prices stop behaving competitively. Instead of reflecting real costs, they begin to reflect pricing power. This leads to what economists describe as “sticky upward prices,” where costs rise quickly but fall slowly—if at all.

Strengthening competition policy directly addresses this problem. By reducing market concentration, lowering entry barriers, and enforcing antitrust rules, policymakers can restore price discipline across key sectors such as energy, food, housing, and telecommunications.

This is not about punishing success—it is about ensuring that success is earned through innovation and efficiency, not protected through dominance.

At the same time, increasing overtime hours does little to solve inflation. While it may temporarily increase output, it risks reinforcing wage-price spirals, exhausting workers, and masking deeper structural problems. In other words, it treats the symptom—not the cause.

A competitive economy, on the other hand, naturally limits excessive price increases. Firms must compete, innovate, and optimize. Consumers gain choice. Prices stabilize not through pressure on workers, but through pressure on markets.

The real path forward is clear: better competition, smarter regulation, and stronger market transparency. Not longer workdays—but better-functioning systems.

Because in the end, inflation is not just a macroeconomic phenomenon—it is a reflection of how fairly and efficiently markets operate.

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