One weird trick to make monopolies self-destruct
Kim Stanley Robinsonâs 2020 novel Ministry For the Future was a groundbreaking work: itâs the tale of a detailed, plausible transition from a world on a collision course with civilization-ending climate catastrophe to one where the challenge is met, with humanity collectively deciding to save itself:
https://pluralistic.net/2020/12/03/ministry-for-the-future/#ksr
Robinsonâs book is important: it not only disproves the (variously attributed) capitalist realism aphorism that âit is easier to imagine the end of the world than it is to imagine the end of capitalismââââit also imagines the means by which that ending was brought about.
Itâs a tale of what Iâve called âThe Swerveâ: the day we stop listening to the first class passengers at the front of the bus thatâs barreling towards a cliff, rush the driver and yank the wheel before we go over the edge:
https://locusmag.com/2022/07/cory-doctorow-the-swerve/
Since the bookâs publication, it has been the subject of intense foment, such as the excellent Crooked Timber seminar on the bookâs strengths, flaws, and future:
https://pluralistic.net/2021/05/12/seminar-for-the-future/#imaginations
The latest project inspired by the book comes from NESTA and The Prospect: Minister For the Future is a series of policy proposals to someone holding that office, as proposed in Robinsonâs novel, for dealing with inequality, food, demographics, networks, mental health, automation, pandemics, health, and other subjects:
https://www.prospectmagazine.co.uk/specialreports/minister-for-the-future
I also contributed a piece: âEnticing monopolies to unwind themselves,â which addresses the existential risk of monopolies: when monopolies reign, it is all but impossible to make good policy, because the monopolists can outbid all comers and turn every truth-seeking exercise into an auction that they win:
https://www.prospectmagazine.co.uk/politics/enticing-monopolies-to-unwind-themselves
That is, after all, the story of the climate emergency itself: a handful of giant firms colluding to distort science, delay actionâââand risk billions of lives to make trillions of dollars. Monopolies create superdense concentrations of power that, like a black hole, warp the normal rules:
https://pluralistic.net/2022/12/05/eldritch-physics/#wouldnt-start-from-here
The best time to tackle monopolies would have been 40 years ago, when all over the world, regulators stopped enforcing anti-monopoly law. The second best time is now. Lucky for us, antitrust regulators have the bit between their teeth and have vowed to halt the march towards market concentration, blocking mergers rather than waving them through:
https://pluralistic.net/2021/08/13/post-bork-era/#manne-down
Theyâve also promised to take on existing monopolies, unwinding the predatory acquisitions and anti-competitive mergers that produced so much concentration in so many industries, which now rule over their regulators, hurting us in a million ways with utter impunity:
https://www.openmarketsinstitute.org/learn/monopoly-by-the-numbers
But while breaking up monopolies is important work, itâs also slow work. It took 69 years to break up AT&T!
https://doctorow.medium.com/podcasting-jam-to-day-c451dd289f2
Blocking future monopolies without ending existing ones is a huge risk. Any monopoly in an industrial supply chain can destroy the smaller firms it buys from and sells to. Think of how Big Pharmaâs mergers let it gouge hospitals on drug prices, leading to regional hospital monopolies that had the bargaining power to push back. But then those hospitals turned around and started screwing insurers, who also formed regional monopolies in order to defend themselves from price-gouging.
In the end, monopoly leads to monopoly, with workers and consumers at either end of the supply chain, unorganized and vulnerable, which is why health workers make less money under worse conditions and patients spend more money for worse care. Itâs not enough to prevent future monopoliesâââwe also have to break up the ones that are all around us.
How can we make that happen without waiting 69 years while the monopolists use their vast cash reserves and influence to delay the reckoning? Thatâs where my proposal comes in.
https://www.prospectmagazine.co.uk/politics/enticing-monopolies-to-unwind-themselves
I am old enough to remember when corporate raiders took over companies in order to break them up and sell them for parts, rather than merging them into monopolies. Rapacious, remorseless finance assholes once stalked the corporate world, shattering firms with impunity.
What if we brought those monsters out of retirement for one more job?
My proposal is simple: a two-year capital gains tax holiday on profits from unwinding any 21st century merger involving a firm with more than ÂŁ10b in market cap: âWatch them do in months what decades of courtroom grinding couldnât hope to accomplish.â
This is a very Ministry For the Future kind of ideaâââone of the novelâs subplots involves bribing oil companies to leave oil in the ground by buying up all their stranded assets, and swallowing the galling proposition of giving still more money to the people who wrecked the planet.
Iâm ambivalent about my proposal for the same reason I was ambivalent about Robsinsonâs stranded-assets thought-experiment. But the last time I talked with Robinson, he shrugged and said, âWeâll just take it all back with a wealth tax.â
https://www.youtube.com/watch?v=Dfgfh3SYu8Y
The whole âMinisterâ package is a fascinating one, and there is something extremely refreshing about imagining a post-Swerve future, where high officials are bent on actually addressing our most urgent problems, backed by an unstoppable political will.
Image: Sam Valadi (modified) https://www.flickr.com/photos/132084522@N05/17086570218/
CC BY 2.0 https://creativecommons.org/licenses/by/2.0/
Jimmy Baikovicius (modified) https://www.flickr.com/photos/jikatu/22143653260/
CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0/
[Image ID: The Google 'Googleplex' office by night. It has been split in two by a giant axe, whose handle is emblazoned with the Wall Street 'raging bull' statue.]