Neo-Brandeisians led by Khan et al put forward the narrative that inflation was driven by corporate consolidation and "greedflation..."
They were proven immediately incorrect, e.g. egg prices skyrocketed due to avian flu supply shocks and subsequently crashed when flocks recovered, proving prices fluctuate based on supply, not because corporations suddenly decide to be "less greedy." Did they revise their statements? Of course not
Before them, the 2010s argument was that large corporations were short-termist and quarterly-focused. This idea brought people like Warren to power. Well, now we have the biggest tech companies in the world blowing large-nation-state levels of CapEx on long-term planning with gigantic structural investments in America, and the exact same people still accuse them of acting in bad faith regardless of the industry or the behavior.
Before then, the 90s/00s argument was that large corporations executed huge CapEx in extractive ways that destroyed the environment. This brought people like Nader into power. Now, big tech companies invest exponentially more in green energy and grid retrofitting than the Green New Deal even considered. The same ideological compatriots now pretend data centers are equally extractive by fabricating water use issues. The reality is the opposite. Massive AI infrastructure (like MSFTs new Wisconsin facility) uses the same amount of water annually as a single neighborhood restaurant. They're literally some of the most water and energy efficient businesses on the planet.
As I've written about before and as Noah points out, we deserve far better advocates for real antitrust issues. The 'Consumer Welfare Standard' should absolutely remain the legal baseline. Instead, these "advocates" abandon empirical harm metrics to accuse anyone who disagrees of being part of the oligarchic Epstein class or whatever other schoolyard nonsense they can throw and believe will stick.
Isn't Lina Khan the pre-eminent standard bearer of the Antimonopolists?
But the Democratic Party admittedly has a weak bench when it comes to pro-entrepreurial, pro-growth experience and sentiment. Which was why I especially appreciated the attention VP Harris gave--whether just lip service or not--to actively supporting small businesses.
But regarding the ills of excessive market concentration, it'd be interesting to read Noah's take on to what degree highly concentrated market sectors--like Airlines, Banks, Meat Packers, etc.--have on A) Depressing industry wages, and B) Overcharging consumers.
I agree with you that the monomaniacal approach to blaming all ills on monopoly is counterproductive.
Regarding this point:
> The causal chain that runs from weak antitrust to all sorts of social harms necessarily runs through profits. If companies aren’t making profit, they aren’t controlling the market.
I wouldn't be so quick to look at profit margins as an exclusive component of the causal chain. Nonprofits can absolutely behave monopolistically, with timely examples being the Mayo Clinic (eliminating overnight respiratory therapy positions) and executives at the Cal Academy enriching themselves over the academy's mission. Make sure to look at a monopolist's employees (especially executives and unions) and suppliers (especially landlords, people who hold patent rights, and people with elite professional licenses). It could be that the direct owner class is getting a raw deal, while nearby rentiers are massively enriched.
One of the weirdest contradictions in economic theory is the idea that monopoly or monopsony are bad and should be dismantled in favour of ‘competition’. By definition, competition is all about getting one over on the opposition – trying to corral resources to build your brand which gives you an advantage, so competition is always seeking to create monopoly. Economists think they can identify a set of conditions which by breaking up monopolies optimizes resources across the economy, and that therefore measures should be taken – and can be taken - to manage markets towards that nirvana.
But the question is whose efficiency and whose optimization. In trying to ‘win’, people striking a bargain have reconciled all their emotions and decisions down to a single figure which by definition is their optimal way of applying their resources for that deal. That does not necessarily make it the optimal way for the economy as a whole. All are competing to win in accordance with their individual definitions of winning (their ‘strategies’). From the monopolist’s point of view everything is optimised as he uses his resources to control the market. For anyone who buys from him, the confluence of motives in that buying decision to agree the purchase are personally optimal, because they by definition have overall outweighed an underlying displeasure at having to pay the power-driven monopolistic price.
Like beauty, ‘efficiency’ is in the eye of the beholder. It is a relative concept shifting with the ebb and flow of the markets, not some absolute, stable, neutral equilibrium. This is not competitive resource/equilibrium efficiency but competitive power efficiency. The dynamic nature of markets ensures that the power relationships change, and power structures reinforce their position by creating barriers to entry. Like the medieval guilds of London, they set up rules, regulations, the need to belong to a trade association and they lobby government to put up more barriers to protect them. Tearing down the rules and regulations that protect monopolistic operations allows money to flow to competing brand-builders. Forcing a break up may not be the right solution. The result may be smaller companies, but that is an effect, not a cause. The nirvana you are looking to achieve is not optimisation but innovation, and that is driven by people hungry to compete, whatever the size of their business.
Not devil's advocate: It is a shame that anti-monopoly and anti-corporate power is taking on more than it can reasonably support because the very root of the left of center in America is the idea that corporate power is more dangerous than government power if the people running the government are taking it at all seriously
To be devil's advocate on the corporate power and racism thing (especially since I just finished Susana Morris's book on Octavia Butler which is nominated for a Hugo yesterday)* increased corporate power may encourage people to think more in terms of hierarchical power and to scapegoat others. These others may not be Americans at all though. Increased corporate power may be systemic racism by definition if skilled BIPOC individuals who have the ability to found startups do not have a choice but to work for one of the powerful companies.
* This was the third book about/inspired by Octavia Butler I have had to read in my Hugo voting career and the most straight biography of all of them. Morris seems to think that the straight literary analysis book on Butler has already been written (for University of Illinois Press) so what she says about the novels is not as insightful as you would expect from an actual literature professor who has taught Afrofuturism but she made good use of the Butler archive and gave the reader a sense of many of the overarching themes in Butler's work.
Neo-Brandeisians led by Khan et al put forward the narrative that inflation was driven by corporate consolidation and "greedflation..."
They were proven immediately incorrect, e.g. egg prices skyrocketed due to avian flu supply shocks and subsequently crashed when flocks recovered, proving prices fluctuate based on supply, not because corporations suddenly decide to be "less greedy." Did they revise their statements? Of course not
Before them, the 2010s argument was that large corporations were short-termist and quarterly-focused. This idea brought people like Warren to power. Well, now we have the biggest tech companies in the world blowing large-nation-state levels of CapEx on long-term planning with gigantic structural investments in America, and the exact same people still accuse them of acting in bad faith regardless of the industry or the behavior.
Before then, the 90s/00s argument was that large corporations executed huge CapEx in extractive ways that destroyed the environment. This brought people like Nader into power. Now, big tech companies invest exponentially more in green energy and grid retrofitting than the Green New Deal even considered. The same ideological compatriots now pretend data centers are equally extractive by fabricating water use issues. The reality is the opposite. Massive AI infrastructure (like MSFTs new Wisconsin facility) uses the same amount of water annually as a single neighborhood restaurant. They're literally some of the most water and energy efficient businesses on the planet.
As I've written about before and as Noah points out, we deserve far better advocates for real antitrust issues. The 'Consumer Welfare Standard' should absolutely remain the legal baseline. Instead, these "advocates" abandon empirical harm metrics to accuse anyone who disagrees of being part of the oligarchic Epstein class or whatever other schoolyard nonsense they can throw and believe will stick.
Isn't Lina Khan the pre-eminent standard bearer of the Antimonopolists?
But the Democratic Party admittedly has a weak bench when it comes to pro-entrepreurial, pro-growth experience and sentiment. Which was why I especially appreciated the attention VP Harris gave--whether just lip service or not--to actively supporting small businesses.
But regarding the ills of excessive market concentration, it'd be interesting to read Noah's take on to what degree highly concentrated market sectors--like Airlines, Banks, Meat Packers, etc.--have on A) Depressing industry wages, and B) Overcharging consumers.
The idea that health insurers have "low margins" so they are OK is nuts.
Private health insurers in the US do not lower costs and do not improve patient care.
In the flow of money between patients and providers, private insurers just sit in that flow like a tapeworm and take money out to sustain themselves.
What's the evidence for this?
I agree with you that the monomaniacal approach to blaming all ills on monopoly is counterproductive.
Regarding this point:
> The causal chain that runs from weak antitrust to all sorts of social harms necessarily runs through profits. If companies aren’t making profit, they aren’t controlling the market.
I wouldn't be so quick to look at profit margins as an exclusive component of the causal chain. Nonprofits can absolutely behave monopolistically, with timely examples being the Mayo Clinic (eliminating overnight respiratory therapy positions) and executives at the Cal Academy enriching themselves over the academy's mission. Make sure to look at a monopolist's employees (especially executives and unions) and suppliers (especially landlords, people who hold patent rights, and people with elite professional licenses). It could be that the direct owner class is getting a raw deal, while nearby rentiers are massively enriched.
One of the weirdest contradictions in economic theory is the idea that monopoly or monopsony are bad and should be dismantled in favour of ‘competition’. By definition, competition is all about getting one over on the opposition – trying to corral resources to build your brand which gives you an advantage, so competition is always seeking to create monopoly. Economists think they can identify a set of conditions which by breaking up monopolies optimizes resources across the economy, and that therefore measures should be taken – and can be taken - to manage markets towards that nirvana.
But the question is whose efficiency and whose optimization. In trying to ‘win’, people striking a bargain have reconciled all their emotions and decisions down to a single figure which by definition is their optimal way of applying their resources for that deal. That does not necessarily make it the optimal way for the economy as a whole. All are competing to win in accordance with their individual definitions of winning (their ‘strategies’). From the monopolist’s point of view everything is optimised as he uses his resources to control the market. For anyone who buys from him, the confluence of motives in that buying decision to agree the purchase are personally optimal, because they by definition have overall outweighed an underlying displeasure at having to pay the power-driven monopolistic price.
Like beauty, ‘efficiency’ is in the eye of the beholder. It is a relative concept shifting with the ebb and flow of the markets, not some absolute, stable, neutral equilibrium. This is not competitive resource/equilibrium efficiency but competitive power efficiency. The dynamic nature of markets ensures that the power relationships change, and power structures reinforce their position by creating barriers to entry. Like the medieval guilds of London, they set up rules, regulations, the need to belong to a trade association and they lobby government to put up more barriers to protect them. Tearing down the rules and regulations that protect monopolistic operations allows money to flow to competing brand-builders. Forcing a break up may not be the right solution. The result may be smaller companies, but that is an effect, not a cause. The nirvana you are looking to achieve is not optimisation but innovation, and that is driven by people hungry to compete, whatever the size of their business.
Not devil's advocate: It is a shame that anti-monopoly and anti-corporate power is taking on more than it can reasonably support because the very root of the left of center in America is the idea that corporate power is more dangerous than government power if the people running the government are taking it at all seriously
To be devil's advocate on the corporate power and racism thing (especially since I just finished Susana Morris's book on Octavia Butler which is nominated for a Hugo yesterday)* increased corporate power may encourage people to think more in terms of hierarchical power and to scapegoat others. These others may not be Americans at all though. Increased corporate power may be systemic racism by definition if skilled BIPOC individuals who have the ability to found startups do not have a choice but to work for one of the powerful companies.
* This was the third book about/inspired by Octavia Butler I have had to read in my Hugo voting career and the most straight biography of all of them. Morris seems to think that the straight literary analysis book on Butler has already been written (for University of Illinois Press) so what she says about the novels is not as insightful as you would expect from an actual literature professor who has taught Afrofuturism but she made good use of the Butler archive and gave the reader a sense of many of the overarching themes in Butler's work.
Elizabeth Sandifer's "Cuddled Little Vice" gets the award. Probably.