Papers presented by Marc Levinson since 2019

2024 Providence, Rhode Island

"The Battle for the Doorstep: The Creation of the Parcel Delivery Industry in Postwar America"

Abstract:

“The distribution of small shipments is one of the most perplexing subjects facing the transportation industry today,” Interstate Commerce Commission economists declared in 1967. The comment was accurate but remarkably ill-timed: parcel service was on the verge of an explosion that would eventually reshape commerce in the United States and around the world. That explosion followed a twenty-year battle that reshaped the parcel delivery industry in the United States. When it began, in the aftermath of World War II, small parcels were transported mainly by the U.S. Post Office Department’s money-losing parcel post service, which faced constant complaints about the quality of its service—not least, its insistence that shippers bring outbound packages to a post office for mailing. Its main competitor for small packages was Railway Express Agency, owned by the railroads, which was eager to expand but was accustomed to delivering freight by rail for industrial customers to pick up, not trucking packages to individual homes and offices. United Parcel Service, hitherto limited to delivering customer purchases for big-city department stores, forced its way into the domestic parcel business during the 1950s and 1960s, upsetting the regulatory structure and triggering a three-way struggle for dominance. This paper will explore the reshaping of the parcel delivery business from the 1950s to the early 1970s. It is part of a larger project examining the emergence of a global industry that delivered an estimated 161 billion parcels in 2022—an average of 300,000 every minute of every day—and underpins dramatic shifts in wholesaling, retailing, and manufacturing worldwide.

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2023 Detroit, MI, United States

"What’s a Grocery Store? Kroger, Albertsons, and Competion in a Reinvented Industry"

Abstract:

In the face of renewed public interest in antitrust enforcement, two of the largest U.S. supermarket operators announced merger plans in October 2022. The proposed fusion of two companies selling similar arrays of essential products, with over 5,000 stores and 700,000 employees between them, would seem to offer a tempting target for trust busters. But over the past century, the formerly prosaic sector once known as grocery retailing has reinvented itself repeatedly, in ways that will make it difficult for competition authorities even to define a relevant market, much less to quantify the anticipated impact of the merger on prices. Further, structural changes in manufacturing and distribution, notably the diminishing number of independent wholesalers, increasing sales of private brands, and the growing importance of information about customer behavior, may favor concentration in the future regardless of whether this merger proceeds. The paper will evaluate corporate strategies in food retailing over several decades, as well as extensive historical market data, to consider this rapidly changing industry in the context of U.S. antitrust law.

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2023 Detroit, MI, United States

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2022 Mexico City

"Deregulation and Market Structure: The Case of Television "

Abstract:

For half a century, a television broadcast license from the Federal Communications Commission was a permit to mint money. Over the past two decades, though, regulatory and technological change have altered the very meaning of “television” and dramatically redistributed rents across the U.S. television industry. Relationships among television stations, broadcast networks, cable and satellite distribution systems, program producers, and viewers have increasingly been shaped by market forces rather than FCC regulations. This deregulation has had significant consequences for industry structure, driving mergers and acquisitions as industry participants have sought to increase their bargaining leverage with respect to one another. This paper will consider the television industry as a case study of how deregulation has disadvantaged small firms and encouraged consolidation throughout the U.S. economy.

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2020 Charlotte, North Carolina

"What's a Comparative Advantage?"

Abstract:

Generations of graduate students have studied a concept called “revealed comparative advantage”—basically, the idea that what a country exports shows what it is most efficient at producing. It is hard to find an idea that is more widely accepted among experts. When value chains began to spread around the globe in the late 1980s, they were presumed to be organized on the basis of comparative advantage: the role each country played in producing raw materials, intermediate goods, finished products, and related services such as research and marketing was assumed to reflect the skills of its workforce, the sophistication of its companies, and the depth of its capital markets. The shift of manufacturing out of high-wage countries was said to reflect the comparative advantage of lower-wage countries in labor-intensive activities, while the high-wage countries specialized in what are now referred to as “headquarters activities” in which their highly skilled workers gave them a competitive edge. This paper will argue that the global value chains that undergirded globalization starting in the late 1980s were not mere reflections of comparative advantage. Directly and indirectly, governments aggressively shaped economic geography, providing land and low-cost financing to build factories and distribution centers, offering tax breaks and trade preferences tailored to the desires of specific corporations, and subsidizing transportation and warehousing to hold down the cost of both importing and exporting. These subsidies were critical in determining trade flows and investment patterns. The logical consequence, which economists have been slow to acknowledge, is that globalization reached excessive levels that were not efficient in any economic sense.

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