I'm touring my new, nationally bestselling novel The Bezzle! Catch me SUNDAY (Apr 21) in TORINO, then Marin County (Apr 27), Winnipeg (May 2), Calgary (May 3), Vancouver (May 4), and beyond!
Combine Angelou's "When someone shows you who they are, believe them" with the truism that in politics, "every accusation is a confession" and you get: "Every time someone accuses you of a vice, they're showing you who they are and you should believe them."
Let's talk about some of those accusations. Remember the moral panic over the CARES Act covid stimulus checks? Hyperventilating mouthpieces for the ruling class were on every cable network, complaining that "no one wants to work anymore." The barely-submerged subtext was their belief that the only reason people show up for work is that they're afraid of losing everything – their homes, their kids, the groceries in their fridge.
This isn't a new development. Back when Clinton destroyed welfare, his justification was that "handouts" make workers lazy. The way to goad workers off their sofas (and the welfare rolls) and into jobs was to instill fear in them:
This is also the firm belief of tech bosses: for them, mass tech layoffs are great news, because they terrorize the workers you don't fire, so that they'll be "extremely hardcore" and put in as many extra hours as the company demands, without even requiring any extra pay in return:
Now, there's an obvious answer to the problem of no one taking a job at the wage being offered: just increase the offer. Capitalists claim to understand this. Uber will tell you that surge pricing "incentivizes drivers" to take to the streets by offering them more money to drive during busy times:
(Note that while Uber once handed the lion's share of surge price premiums to drivers, these days, Uber just keeps the money, because they've entered the enshittification stage where drivers are so scared of being blacklisted that Uber can push them around instead of dangling carrots.)
(Also note that this logic completely fails when it comes to other businesses, like Wendy's, who briefly promised surge-priced hamburgers during busy times, but without even the pretense that the surge premium would be used to pay additional workers to rush to the restaurant and increase the capacity:)
So bosses knew how to address their worker shortage: higher wages. You know: supply and demand. For bosses, the issue wasn't supply, it was price. A worker who earns $10/hour but makes the company $20 profit every hour is splitting the surplus 50:50 with their employer. The employer has overheads (rent on the shop, inventory, advertising and administration) that they have to pay out of their end of that surplus. But workers also have overheads: commuting costs, child-care, a professional wardrobe, and other expenses the worker incurs just so they can make money for their boss.
There's no iron law of economics that says the worker/boss split should be 50/50. Depending on the bargaining power of workers and their bosses, that split can move around a lot. Think of McDonald's and Walmart workers who work for wildly profitable corporate empires, but are so badly paid that they have to rely on food stamps. The split there is more like 10/90, in the boss's favor.
The pandemic changed the bargaining power. Sure, workers got a small cushion from stimulus checks, but they also benefited from changes in the fundamentals of the labor market. For example, millions of boomers just noped out of their jobs, forever, unwilling to risk catching a fatal illness and furious to realize that their bosses viewed that as an acceptable risk.
Bosses' willingness to risk their workers' lives backfired in another way: killing hundreds of thousands of workers and permanently disabling millions more. Combine the boomer exodus with the workers who sickened or died, and there's just fewer workers to go around, and so now those workers enjoy more bargaining power. They can demand a better split: say, 75/25, in their favor.
Remember the 2015 American Airlines strike, where pilots and flight attendants got a raise? The eminently guillotineable Citibank analyst Kevin Crissey declared: "This is frustrating. Labor is being paid first again. Shareholders get leftovers":
Now, obviously, the corporation doesn't want to offer a greater share of its surplus to its workforce, but it certainly can do so. The more it pays its workers, the less profitable it will be, but that's capitalism, right? Corporations try to become as profitable as they can be, but they can't just decree that their workers must work for whatever pay they want to offer (that's serfdom).
Companies also don't get to dictate that we must buy their goods at whatever price they set (the would be a planned economy, not a market economy). There's no law that says that when the cost of making something goes up, its price should go up, too. A business that spends $10 to make a widget you pay $15 for has a $5 margin to play with. If the business's costs go up to $11, they can still charge $15 and take $1 less in profits. Or they can raise the price to $15.50 and split the difference.
But when businesses don't face competition, they can make you eat their increased costs. Take Verizon. They made $79b in profit last year, and also just imposed a $4/month service charge on their mobile customers due to "rising operational costs":
Now, Verizon is very possibly lying about these rising costs. Excuseflation is rampant and rising, as one CEO told his investors, when the news is full of inflation-talk, "it’s an opportunity to increase the prices without getting a whole bunch of complaining from the customers":
But even stipulating that Verizon is telling the truth about these "rising costs," why should we eat those costs? There's $79b worth of surplus between Verizon's operating costs and its gross revenue. Why not take it out of Verizon's bottom line?
For 40 years, neoliberal economists have emphasized our role as "consumers" (as though consumers weren't also workers!). This let them play us off against one-another: "Sure, you don't want the person who rings up your groceries to get evicted because they can't pay their rent, but do you care about it enough to pay an extra nickel for these eggs?"
But again, there's no obvious reason why you should pay that extra nickel. If you have the buying power to hold prices down, and workers have the labor power to keep wages up, then the business has to absorb that nickel. We can have a world where workers can pay their rent and you can afford your groceries.
So how do we get bosses to agree to take less so we can have more? They've told us how: for bosses, the thing that motivates workers to show up for shitty jobs is fear – fear of losing their homes, fear of going hungry.
When your boss says, "If you don't want to do this job for minimum wage, there's someone else who will," they're telling you that the way to get a raise out of them is to engineer things so that you can say, "If you don't want to pay me a living wage for this job, there's someone else who will."
Their accusation – that you only give someone else a fair shake when you're afraid of losing out – is a confession: to get them to give you a fair shake, we have to make them afraid. They're showing us who they are, and we should believe them.
In her Daily Show appearance, FTC chair Lina Khan quipped that monopolies are too big to care:
https://www.youtube.com/watch?v=oaDTiWaYfcM
Philosophers of capitalism are forever praising its ability to transform greed into public benefit. As Adam Smith put it, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." The desire to make as much money as possible, on its own, doesn't produce our dinner, but when the butcher, the brewer and the baker are afraid that you will take your labor or your wallet elsewhere, they pay more and charge less.
Capitalists don't want market economies, where they have to compete with one another, eroding their margins and profits – they want a planned economy, like Amazon, where Party Secretary Bezos and his commissars tell merchants what they can sell and tell us what we must pay:
Capitalists don't want free labor, where they have to compete with rival capitalists to bid on their workers' labor – they want noncompetes, bondage fees, and "training repayment agreement provisions" (TRAPs) that force their workers to stay in dead-end jobs rather than shopping for a better wage:
Capitalists hate capitalism, because capitalism only works if the capitalists are in a constant state of terror inspired by the knowledge that tomorrow, someone smarter could come along and open a better business, poaching their customers and workers, and putting the capitalist on the breadline.
Being in a constant precarious state makes people lose their minds, and capitalists know it. That's why they work so hard to precaratize the rest of us, saddling us with health debt, education debt, housing debt, stagnating wages and rising prices. It's not just because that makes them more money in the short term from our interest payments and penalties. It's because it de-risks their lives: monopolies and cartels can pass on any extra costs to consumers, who'll eat shit and take it:
A workforce that goes to bed every night worrying about making the rent is a workforce that put in unpaid overtime and thank you for it.
Capitalists hate capitalism. You know who didn't hate capitalism? Karl Marx and Freidrich Engels. The first chapter of The Communist Manifesto is just these two guys totally geeking out about how much cool stuff we get when capitalists are afraid and therefore productive:
https://pluralistic.net/SpectreHaunting
But when capitalists escape their fears, the alchemical reaction that converts greed to prosperity fizzles, leaving nothing behind but greed and its handmaiden, enshittification. Google search is in the toilet, getting worse every year, but rather than taking reduced margins and spending more fighting spam, the company did a $80b stock-buyback and fired 12,000 skilled technologists, rather than using that 80 bil to pay their wages for the next twenty-seven years:
Monopoly apologists like to argue that monopolists can rake in the giant profits necessary to fund big, ambitious projects the produce better products at lower prices and make us all better off. But even if monopolists can spend their monopoly windfalls on big, ambitious projects, they don't. Why would they?
If you're Google, you can either spend tens of billions on R&D to keep up with spam and SEO scumbags, or you can spend less money buying the default search spot on every platform, so no one ever tries another search engine and switches:
How do we get capitalists to work harder to make their workers and customers better off? Capitalists tell us how, every day. We need to make them afraid.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
Catch me in Miami! I'll be at Books and Books in Coral Gables on Jan 22 at 8PM.
Just in time for Davos, here's 'Taken, not earned: How monopolists drive the world’s power and wealth divide," a report from a coalition of international tax justice and anti-corporate activist groups:
The rise of monopolies over the past 40 years came about as the result of specific, deliberate policy choices. As the report documents, the wealthiest people in America funneled a fortune into neutering antitrust enforcement, through the "consumer welfare" doctrine.
This is an economic theory that equates monopolies with efficiency: "If everyone is buying the same things from the same store, that tells you the store is doing something right, not something criminal." 40 years ago, and ever since, the wealthy have funded think-tanks, university programs and even "continuing education" programs for federal judges to push this line:
They didn't do this for ideological reasons – they were chasing material goals. Monopolies produce vast profits, and those profits produce vast wealth. The rise and rise of the super rich cannot be decoupled from the rise and rise of monopolies.
If you're new to this, you might think that "monopoly" only refers to a sector in which there is only one seller. But that's not what economists mean when they talk about monopolies and monopolization: for them, a monopoly is a company with power. Economists who talk about monopolies mean companies that "can act independently without needing to consider the responses of competitors, customers, workers, or even governments."
One way to measure that power is through markups ("the difference between the selling price of goods or services and their cost"). Very large companies in concentrated industries have very high markups, and they're getting higher. From 2017-22, the 20 largest companies in the world had average markups of 50%. The 100 largest companies average 43%. The smallest half of companies get average markups of 25%.
Those markups rose steeply during the covid lockdowns – and so did the wealth of the billionaires who own them. Tech billionaires – Bezos, Brin and Page, Gates and Ballmer – all made their fortunes from monopolies. Warren Buffet is a proud monopolist who says "the single most important decision in evaluating a business is pricing power… if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business."
We are living in the age of the monopoly. In the 1930s, the top 0.1% of US companies accounted for less than half of America's GDP. Today, it's 90%. And it's accelerating, with global mergers climbing from 2,676 in 1985 to 62,000 in 2021.
Monopoly's cheerleaders claim that these numbers vindicate them. Monopolies are so efficient that everyone wants to create them. Those efficiencies can be seen in the markups monopolies can charge, and the profits they can make. If a monopoly has a 50% markup, that's just the "efficiency of scale."
But what is the actual shape of this "efficiency?" How is it manifest? The report's authors answer this with one word: power.
Monopolists have the power "to extract wealth from, to restrict the freedoms of, and to manipulate or steer the vastly larger numbers of losers." They establish themselves as gatekeepers and create chokepoints that they can use to raise prices paid by their customers and lower the payout to their suppliers:
https://chokepointcapitalism.com/
These chokepoints let monopolies usurp "one of the ultimate prerogatives of state power: taxation." Amazon sellers pay a 51% tax to sell on the platform. App Store suppliers pay a 30% tax on every dollar they make with their apps. That translates into higher costs. Consider a good that costs $10 to make: the bottom 50% of companies (by size) would charge $12.50 for that product on average. The largest companies would charge $15. Thus monopolies don't just make their owners richer – they make everyone else poorer, too.
This power to set prices is behind the greedflation (or, more politely, "seller's inflation"). The CEOs of the largest companies in the world keep getting on investor calls and bragging about this:
The food system is incredibly monopolistic. The Cargill family own the largest commodity trader in the world, which is how they built up a family fortune worth $43b. Cargill is one of the "ABCD" companies ("Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus") that control the world's food supply, and they tripled their profits during the lockdown.
Monopolies gouge everyone – even governments. Pfizer charged the NHS £18-22/shot for vaccines that cost £5/shot to make. They took the British government for £2bn – that's enough to pay last year's pay hike for NHS nurses, six times over,
But monopolies also abuse their suppliers, especially their employees. All over the world, competition authorities are uncovering "wage fixing" and "no poaching" agreements among large firms, who collude to put a cap on what workers in their sector can earn. Unions report workers having their pay determined by algorithms. Bosses lock employees in with noncompetes and huge repayment bills for "training":
Monopolies corrupt our governments. Companies with huge markups can spend some of that money on lobbying. The 20 largest companies in the world spend more than €155m/year lobbying in the US and alone, not counting the money they spend on industry associations and other cutouts that lobby on their behalf. Big Tech leads the pack on lobbying, accounting for 82% of EU lobbying spending and 58% of US lobbying.
One key monopoly lobbying priority is blocking climate action, from Apple lobbying against right-to-repair, which creates vast mountains of e-waste, to energy monopolist lobbying against renewables. And energy companies are getting more monopolistic, with Exxonmobil spending $65b to buy Pioneer and Chevron spending $60b to buy Hess. Many of the world's richest people are fossil fuel monopolists, like Charles and Julia Koch, the 18th and 19th richest people on the Forbes list. They spend fortunes on climate denial.
When people talk about the climate impact of billionaires, they tend to focus on the carbon footprints of their mansions and private jets, but the true environmental cost of the ultra rich comes from the anti-renewables, pro-emissions lobbying they buy with their monopoly winnings.
The good news is that the tide is turning on monopolies. A coalition of "businesses, workers, farmers, consumers and other civil society groups" have created a "remarkably successful anti-monopoly movement." The past three years saw more regulatory action on corporate mergers, price-gouging, predatory pricing, labor abuses and other evils of monopoly than we got in the past 40 years.
The business press – cheerleaders for monopoly – keep running editorials claiming that enforcers like Lina Khan are getting nothing done. Sure, WSJ, Khan's getting nothing done – that's why you ran 80 editorial about her:
The EU and UK are taking actions that would have been unimaginable just a few years ago. Canada is finally set to get a real competition law, with the Trudeau government promising to add an "abuse of dominance" rule to Canada's antitrust system.
Even more exciting are the moves in the global south. In South Africa, "competition law contains some of the most progressive ideas of all":
It actively seeks to create greater economic participation, particularly for ‘historically disadvantaged persons’ as part of its public interest considerations in merger decisions.
Balzac wrote, "Behind every great fortune there is a crime." Chances are, the rapsheet includes an antitrust violation. Getting rid of monopolies won't get rid of all the billionaires, but it'll certainly get rid of a hell of a lot of them.
I'm Kickstarting the audiobook for The Bezzle, the sequel to Red Team Blues, narrated by @wilwheaton! You can pre-order the audiobook and ebook, DRM free, as well as the hardcover, signed or unsigned. There's also bundles with Red Team Blues in ebook, audio or paperback.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
Tonight (November 29), I'm at NYC's Strand Books with my novel The Lost Cause, a solarpunk tale of hope and danger that Rebecca Solnit called "completely delightful."
Not all ads are created equally sleazy. The privacy harms from surveillance ads, though real, are often hard to pin down. But there's another kind of ad - or "ad" that picks your pocket every time you use an ecommerce site.
This is the "sponsored listing" ad, which allows merchants to bid to be among the top-ranked items in response to your searches - whether or not their products are a good match for your query. These aren't "ads" in the way that, say, a Facebook ad is an ad. These are more #payola, a form of bribery that's actually a crime (but not when Amazon does it):
Amazon is the global champion of payola. It boasts of $31 billion in annual "ad" revenue. That's $31 billion that Amazon sellers have to recoup from you. But Amazon's use of "most favored nation" deals (which requires sellers to offer their lowest prices on Amazon) mean that you don't see those price-hikes because sellers raise their prices everywhere:
Forget Twitter: Amazon search is the poster-child for enshittification, in which Amazon locks you in (for example, with a year's shipping prepaid through Prime) and then you get recommended worse products while sellers make less money and Amazon pockets the difference.
Sellers who don't sell on Amazon are dead in the water, because most US households have Amazon Prime and overwhelmingly, Prime users start their search on Amazon, and, if they find the goods they're seeking. After all, they've prepaid for shipping.
So sellers suck it up and pay a 45-51% Amazon tax and pass it on to us - no matter where we shop. A lot of the junk fees sellers pay are related to Prime and other fulfillment services, but an increasing share of the Amazon tax comes from the need to pay to "advertise," because if they don't buy the top result for searches for their own products, their competitors' ads will push them right off the first page (those competitors spend money on advertising, rather than manufacturing quality).
There's a lot of YOLO/ROFLMAO in those ads: search for "cat beds" and 50% of the first five screens are ads - including ads for dog products, apparently bought by companies adopting a spray-and-pray approach to advertising. Someone selling a quality product still has to outbid all of those garbage sellers:
This is at the root of Amazon's Pricing Paradox: while Amazon can defend itself against regulators by citing sellers whose prices are lower and/or whose quality is higher, it's nearly impossible for shoppers to get those deals. If you click the top result for your search, you will, on average, pay 29% more than you would if you found the best bargain on the site:
What's more, you can't fix this by simply sorting by price, or by reviews, or some mix of the two. The sleaziest sellers have mastered tricks like changing the number of units they sell so the total price is lower. For example, if batteries are normally sold $10 for a four-pack, a sleazy seller can offer batteries at $9 for three units. A lowest-to-highest price-sort will put this item ahead of a cheaper rival.
Researchers found that getting a good deal at Amazon requires that you make a multifactorial spreadsheet by laboriously copy/pasting multiple details from individual listing pages and then doing sorts that Amazon itself doesn't permit:
There's an exception to this: Amazon and Apple have a cozy, secret arrangement to exclude these "ads" from searches for Apple products. But if you're shopping for anything else, you're SOL:
These payola markets are bad for buyers, and they cost sellers a lot of money, but are they at least good for sellers? A new study from three business-school researchers - Vibhanshu Abhishek, Jiaqi Shi and Mingyu Joo - shows that payola is a very bad deal for good sellers, too:
After doing a lot of impressive quantitative work, the authors conclude that for good sellers, showing up as a sponsored listing makes buyers trust their products less than if they floated to the top of the results "organically." This means that buying an ad makes your product less attractive than not buying an ad.
The exception is sellers who have bad products - products that wouldn't rise to the top of the results on their own merits. The study finds that if you buy your mediocre product's way to the top of the results, buyers trust it more than they would if they found it buried deep on page eleventy-million, to which its poor reviews, quality or price would normally banish it.
But of course, if you're one of those good sellers, you can't simply opt not to buy an ad, even though seeing it with the little "AD" marker in the thumbnail makes your product less attractive to shoppers. If you don't pay the danegeld, your product will be pushed down by the inferior products whose sellers are only too happy to pay ransom.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
Obama's turncoat antitrust enforcer is angry about the Google breakup
The DoJ’s antitrust lawsuit against Google triggered an avalanche of pearl-clutching editorials from establishment lawyers and economists who argue that such a move is both counterproductive and legally incoherent. These Very Bad Takes are only to be expected, since they emanate from ideologues who volunteered to serve as Renfields for vampiric monopolists.
If you’d like an essay-formatted version of this post to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
The DoJ’s antitrust lawsuit against Google triggered an avalanche of pearl-clutching editorials from establishment lawyers and economists who argue that such a move is both counterproductive and legally incoherent. These Very Bad Takes are only to be expected, since they emanate from ideologues who volunteered to serve as Renfields for vampiric monopolists.
If you’d like an essay-formatted version of this post to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
A prime example is the Washington Post’s unsigned editorial, which starts with the conclusion that monopolies are both legal and generally beneficial, then works backwards to invent facts to support that conclusion:
As Jason Kint writes, the editorial simply handwaves away the factual record cited in the 153-page lawsuit, with howlers like “no one is forcing advertisers and publishers to use Google’s advertising services” — this is, in fact, exactly what the DoJ alleges:
They back that allegation up with some pretty damning eviddence of deceptive and illegal tactics that Google used to block competitors and punish publishers who tried to use their service. Kint’s got a great breakdown of the case:
It’s wild to see the Post go all in on the idea that monopolizing the ad market is legally sound and economically beneficial, given how much of the DoJ suit turns on the fact that Google (and Facebook) have been stealing ad revenues from publishers like the Post.
Why does the establishment fall all over itself to invent reasons that the DoJ’s case is both wrongheaded and doomed? They may not be particularly invested in defending Google itself. Rather, they represent the last gasp of a 40-year-long conspiratorial legal ideology that embraced the Reagan-era idea of “consumer welfare”:
This ideology begins with Robert Bork, Nixon’s crooked solicitor general, whose crimes scuttled his Supreme Court nomination (his failed confirmation hearing was so cringe-inducing that it spawned the term “borked”). Bork codified this ideology in a 1978 book called “The Antitrust Paradox,” which argued that monopolies are engines of efficiency.
You can tell they’re efficient because they are able to take over their markets. Attacking monopolies is counterproductive — why should we punish companies for success? This is the heart of the “consumer welfare” theory, but it’s underpinned by a much weirder and risible idea: not only is this how the law should be written, it’s how the law is written.
That is, Bork claimed that a close reading of existing antitrust laws — the Sherman Act, the Clayton Act, the FTC Act — would reveal that Congress didn’t want regulators or judges to prevent or break up monopolies. No no no! These laws were only drafted to punish bad monopolies.
A “bad monopoly” is one that uses its market power to raise prices or lower quality. These bad monopolies hurt “consumers” — but (Bork says) they probably don’t exist, because if they did, new companies would spring into existence to compete them out of existence. For Bork, America’s landmark antitrust laws exist to fight a mythical bogeyman, the “bad” monopoly, which probably doesn’t exist, and if it does, it only lives long enough for entrepreneurs to take notice of it and hunt it to extinction.
This is just bonkers. It’s what physicists mean when they say something is “not even wrong.” As a technical matter, it’s plain that monopolists can capture their markets and use that market capture to prevent new companies from taking the field and disciplining them with competition — that’s painstakingly obvious from the factual record developed in the DoJ brief against Google.
But even more bonkers is the conspiracy theory at the heart of consumer welfare economics: the idea that not only should antitrust laws tolerate monopolies, but they actually are tolerant of monopolies, and everyone who enforced these laws from their inception until the Reagan era was reading them wrong.
That is an unsupportable, laughable idea. I mean, think about Senator Robert Sherman’s senate-floor speech in support of America’s first antitrust law, Sherman Act: “If we will not endure a King as a political power we should not endure a King over the production, transportation, and sale of the necessaries of life. If we would not submit to an emperor we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity.”
Those are not the words of a man designing a law to shield monopolists from government overreach except in those rare instances where a monopolist turns out not to be a benevolent dictator. Rather, Sherman — and, later, Henry “Clayton Act” Clayton — didn’t want any monopolies. These laws were unambiguously animated by lawmakers’ fear that if corporations grew too powerful, they would be too big to fail and too big to jail. In other words, a “benevolent dictator” was still a dictator:
I want to draw a parallel here to chiropractic. On the one hand, chiropractic’s theoretical foundation has some serious scientific problems that should give potential patients pause:
But beyond the technical critique of chiropractic, there’s also some profound foundational problems, including the fact that the founder of chiropractic said that he learned how to fix people’s backs from a ghost:
Consumer welfare antitrust is like chiropractic, then, in that it has serious technical deficiencies — monopolies do exist, they do raise prices and lower quality, markets don’t correct them, and they can and do corrupt the political process, and therefore Bork-believing economists are factually wrong and bad at managing economies.
But then there’s the other way in which consumer welfare is like chiropractic: its foundational tenets are just bonkers. Chiropractic’s founder talked to ghosts, and Robert Bork found gnostic meaning in Qanon-grade close readings of the text of the Sherman, Clayton and FTC Acts that revealed that their drafters were secretly in favor of monopolies. That’s the “not even wrong” part.
Even skeptics of chiropractic have largely forgotten that it is ghost-based medicine, and even skeptics of consumer welfare have largely stopped talking about whether the string of court decisions that followed from Bork’s ascendancy are simply wrong as a matter of law (that is, even if you think these cases resulted in good economic policy, the judges clearly misinterpreted the law).
American antitrust law always was, and continues to be primarily concerned with power — namely, the power of large companies to usurp democratic accountability and act with impunity, able to use their economic might to buy off or scare off lawmakers and regulators who would otherwise hold them to account.
The fact that we’ve largely forgotten this truth — a truth that can be easily verified simply by reading the Sherman Act and its successors — isn’t an accident of history. Some of the richest people in the history of the human race poured enormous fortunes into burying it. Take the Manne Seminars, lavish junkets for federal judges that bamboozled them with the Bork’s conspiratorial account of antitrust laws’ true intent:
40% of the federal judiciary processed through the Manne Seminars when they were running, including Supremes like RBG, who later parroted their dogma in their written opinions, which shifted measurably and dramatically to support monopolies:
https://www.nber.org/papers/w29788
Bork-driven antitrust’s ghost-based foundations were so thoroughly buried that anyone who broke from its orthodoxy was considered a lunatic-fringe radical. Until, that is, Biden appointed three effective, brilliant, charismatic trustbusters who dared to speak the long unspeakable truth that monopolies are both bad, and illegal.
These three — Tim Wu, recently departed from the White House; Lina Khan at the FTC; and Jonathan Kanter at the DOJ — wasted no time turning word into deed, taking on mergers, addressing anticompetitive conduct (like blocking noncompetes and protecting Right to Repair), and filing suit against abusive firms:
This naturally triggered an exodus of the government economists and lawyers who’d presided over the ghost-based antitrust era in which monopolies were encouraged and celebrated. Economists who’d built their careers on this collapsing idea wept into their beers, describing this as the end of “independent thinking” at the FTC (“independent thinking” being a synonym for “repeating billionaires self-serving dogma”):
This was genuinely surreal! Imagine if a new NIH chief declared a commitment to evidence based-medicine and think-tankies published feverish editorials lamenting the brain-drain as chiropractors and reiki healers left government service.
This requiem for the ineffectual monopoly-enablers of the waning Bork era continues to this day. The DoJ’s Google suit has triggered fresh rounds of garment-rending from corporate shills who once presided over catastrophic mergers while drawing a public salary.
Writing for The American Prospect, Jeff Hauser and Andrea Beaty from the Revolving Door Project do what they do best — reveal the glaring conflicts of interest these monopoly enablers fail to disclose in attacking the DoJ’s case:
Exhibit A: Dave Gelfand, who served as the DoJ’s antitrust boss during Obama’s second term. Gelfland has spent his career rotating between BigLaw firms like Cleary Gottlieb Steen & Hamilton and public service. His rap sheet includes advising T-Mobile on its acquisition of Sprint, a catastrophic merger that has since plunged the enshittification of American telecoms to new lows. Gelfand also represented Coors before the DoJ when it bought Miller, accelerating the process whereby two companies sell nearly all the beer in the world.
And before that? Gelfand represented Google in its acquisition of DoubleClick — one of the anticompetitive mergers the DoJ is currently seeking to unwind.
Given this history, the fact that Obama — a self-style progressive Democrat — put this guy in charge of the nation’s antitrust enforcement is darkly hilarious. You couldn’t ask for a more canid dingo babysitter. But even more grimly funny is the fact that Law360 — a trade journal for lawyers — got Gelfand to write its op-ed on the DoJ’s Google suit:
In his editorial, Gelfand laments that the DoJ’s action against Google is “pushing aside decades of bipartisan antitrust enforcement.” Ummm…yeah, that’s the point. Gelfand, who built his career enabling monopolistic mergers and today makes millions helping monopolists extract billions, is not a reliable narrator on the subject of antitrust.
Shamefully, the Law360 piece includes no disclosures of Gelfand’s current clients and which mergers they might be contemplating, nor does it describe whether his partners at Cleary Gottlieb Steen & Hamilton represent Google or other firms that would be adversely affected by a precedent in favor of the DoJ in the Google suit.
Gelfand says that Kanter and the DoJ are “throwing out 40 years of learning” about the correct way to regulate monopolists. Anyone who’s paying attention can see through this self-serving nonsense. As Hauser and Beaty write, “Getting Law360 to publish a piece where Gelfand takes credit for steering one of the most consequential and harmful mergers of the 21st century through the merger review process is terrific marketing for Cleary!”
As trustbusters go after monopolists, you’re going to hear a lot of this: “fighting monopolists goes against 40 years of precedent.” It does. It should. It must. We’ve just been through 40 years of ghost-based antitrust, founded on a surreal, easily-debunked conspiracy theory about the intent of the drafters of antitrust law. The task before us is precisely to overturn these precedents.
Another common rejoinder you’re likely to encounter as we banish Bork to the scrapheap of history: “You can’t break up a company like Google — that’s like ‘unscrambling an egg.’” This week on the Capitalisnt podcast, Dina Srinivasan makes short work of this claim, pointing out that if Google’s CEO announced that he was spinning the adtech businesses out as standalones, he’d be praised for his vision and the stock price would shoot up. If an activist investor like TCI Fund Management demanded that the company spin out the business, they’d be lionized for their aggressive business tactics. It’s only when regulators propose breaking up a sprawling and unweildy conglomerate like Google that we’re told that such a thing is impossible:
This week (Feb 14–17), I’m in Australia, touring my book Chokepoint Capitalism with my co-author, Rebecca Giblin. We’re in Melbourne tonight (Feb 14), Sydney tomorrow (Feb 15), then Canberra (Feb 16/17). More tickets just released for Sydney!
[Image ID: 'What a Funny Little Government,' Horace Taylor's 1899 editorial cartoon from The Verdict, depicting John D Rockefeller as a giant holding the White House in his hand, peering intently at it through a jeweler's loupe. In the background, the Capitol dome rises, surrounded by smoke-belching chimneys. The whole scene is set on a plane of oil-barrels.]
बिजली उपभोक्ताओं के लिए बड़ी राहत: सातवें साल भी नहीं बढ़ेंगी दरें, स्मार्ट मीटर के बोझ से भी मिल सकती है मुक्ति
Uttar Pradesh News: उत्तर प्रदेश के बिजली उपभोक्ताओं के लिए एक बड़ी खुशखबरी है। प्रदेश में लगातार सातवें वर्ष भी बिजली की दरें यथावत रहने की प्रबल संभावना है। इसके साथ ही, उपभोक्ताओं पर स्मार्ट मीटर के खर्च का अतिरिक्त बोझ डालने की योजना पर भी सवाल उठ रहे हैं, जिससे जनता को बड़ी राहत मिलने की उम्मीद है।
हाल ही में हुई एक महत्वपूर्ण बैठक में पावर कारपोरेशन के वार्षिक राजस्व आवश्यकता (ARR)…
बिजली उपभोक्ताओं के लिए बड़ी राहत: सातवें साल भी नहीं बढ़ेंगी दरें, स्मार्ट मीटर के बोझ से भी मिल सकती है मुक्ति
Uttar Pradesh News: उत्तर प्रदेश के बिजली उपभोक्ताओं के लिए एक बड़ी खुशखबरी है। प्रदेश में लगातार सातवें वर्ष भी बिजली की दरें यथावत रहने की प्रबल संभावना है। इसके साथ ही, उपभोक्ताओं पर स्मार्ट मीटर के खर्च का अतिरिक्त बोझ डालने की योजना पर भी सवाल उठ रहे हैं, जिससे जनता को बड़ी राहत मिलने की उम्मीद है।
हाल ही में हुई एक महत्वपूर्ण बैठक में पावर कारपोरेशन के वार्षिक राजस्व आवश्यकता (ARR)…
Anti-profiteering deposit ordered as Delhi High Court held that suppliers must mandatorily pass GST rate-reduction benefits through commensurate price reduction and that NAA holds wide suo-motu powers under Section 171 CGST Act.
L’Oreal India Pvt. Ltd. v. Union of India & Ors., High Court of Delhi, W.P.(C) 12557/2022 — Anti-profiteering deposit directed as Court held that benefit must be passed by commensurate price reduction and NAA possesses suo-motu powers
Court: High Court of Delhi, New DelhiPetition Number: W.P.(C) 12557/2022Date of Judgment: 06 October 2022Category: Anti-Profiteering (Section 171 CGST Act),…
The "Winner Takes All" Phenomenon: Exploring Its Nature and Market Implications
In the dynamic landscape of modern economics, the concept of “winner takes all” represents a phenomenon where a disproportionately large share of rewards or market influence accrues to a single dominant player or a select few, leaving competitors with relatively little. This phenomenon, also known as “market concentration” or “winner-takes-most,” manifests across various industries and markets,…
