[BurningFrog]

"Cost disease" has affected some large sectors in the US economy for the last 5 or so decades, but not most other countries, and not the US before that.

Your general assertion about competition not working proves too much. If true, it would affect all market economies all the time.

[js8]

The claim is not about "competition not working", the claim is about the price. It's actually quite tricky to determine whether the price level corresponds to monopolistic or marginal cost price, because it depends (in neoclassical theory, at least) on supply and demand and these are often not known. So people can easily mistake the (actual) monopolistic price for the (expected by neoclassicals) price at marginal cost, and I would argue they often do.

And there are other mechanisms, in play, too. For example, if there is friction in the market, and it often is, then the prices can be lower due to competition for market share.

[BurningFrog]

I still don't see anything in this argument that is specific to the affected sectors of the economy in the last half century US.

If you're right, you might win a Nobel Prize in Economics, but I don't see how you've explained Cost Disease.

[js8]

IMHO, the affected sectors are specific because they are very hard to substitute. Ordinarily, when prices start to grow towards monopolistic price, the demand curve will shift (due to substitution) to counter this effect. But these sectors have demand curves that cannot be shifted easily, and so they seem as a special case, but in fact they are not.

Speaking of Nobel prize, I think Steve Keen deserves one (and maybe two), but he will never get one, unfortunately.