Last month President Biden designated Rebecca Slaughter as acting chair of the Federal Trade Commission, where she has served as a commissioner since 2018. During a recent public forum, she gave some fascinating comments about ideological differences over antitrust, the tech sector, and economic policy that could serve as a guide for how she will lead the Commission. Unfortunately those comments—coming in the shadow of the Capitol Hill riot—presented a false dichotomy and ignored how much progressive and populist policy advocates already have in common.
On the hot button issue of content moderation and social media de-platforming, Slaughter said, “One thing I've found really interesting is a lot of the voices that are decrying the actions of the platforms to remove some of this dangerous content are the same ones who resist government antitrust intervention.”
This echoes the conventional wisdom that left-of-center critics favor more aggressive antitrust enforcement and right-of-center voters are more worried about being de-platformed. But that’s a misleading narrative, given that many of the most aggressive critics of Twitter, Facebook, and other large Internet companies are Trump-aligned politicians who have called for federal antitrust regulators to be unleashed on so-called Big Tech firms.
Populist conservatives who advocate for trade tariffs, domestic producer preferences, and tax penalties for offshoring have a string of specific remedies with only the vaguest of connections to the problems they purport to address.
We often hear that left-wing and right-wing politics couldn’t be more polarized, but two of the loudest interest groups in the economic policy world these days have an oddly similar approach. Progressives are trying to use antitrust law to address dilemmas that have nothing to do with antitrust, and economic nationalists are trying to solve problems that, ultimately, have little to do with economics. What they both say they want would increase government power beyond a mere centrally planned economy and require a centrally planned society. Not only is this a foolish goal, but these efforts could kneecap the US economy at exactly the time, post-COVID, when we will most need resilience and renewal.
In progressive antitrust terms, it’s taken the form of calls for abandoning the “consumer harm” standard and substituting demands for undefinable goals like “inclusiveness” and “fairness.”
This approach opens the floodgates to complaints by anyone who doesn’t like how a particular firm is operating or how any given industry is constituted. Senator Elizabth Warren claims, for example, that we should be breaking up companies that are too big “even if they are generally providing good service at a reasonable price.” Defending the Department of Justice’s antitrust case against Microsoft in the late 1990s, she writes “Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?” So Google was good in 1999 but it’s bad now, and we can judge that based on the market share it’s earned in the meantime by becoming the top competitor in its industry? Are we sure we should be using one politician’s vague feeling about search engine options twenty years after the fact to guide policy choices with multi-billion dollar implications in 2021?
While the enemies of Big Tech aggressively demand redress from Congress and the courts, they are also squishy on defining what exactly justifies their intervention.
Here’s how the Open Markets Institute, a leading voice in this push, describes its goal: “develop and promote law and policy designed to structure markets and corporate behaviors in ways that ensure a fair and equitable distribution of opportunity, wealth, and power within our society.” This constitutes shrugging off actual, observable concerns about restraint of trade, reduced production, and higher prices—the traditional concerns of antitrust law—in favor of deciding how much wealth and opportunity everyone should have, and using the legal system to punish anyone who appears to have too much. No need to prove anything as antiquated as collusion or price-fixing—just claim some company or CEO has “too much” of anything, and you’re good to go.
Similarly, the populist conservatives who advocate for trade tariffs, domestic producer preferences, and tax penalties for offshoring have a string of specific remedies with only the vaguest of connections to the problems they purport to address. Senator Josh Hawley (R-MO) has spoken often of his love for small businesses, “whether it’s a local grocery store [or a] a local hardware store,” while attacking large multinational firms with “global aspirations and commitments.” Even while acknowledging the overwhelming consensus of economists that, when it comes to freel trade, “the United States benefits on net,” he and his fellow populists have decided their sepia-toned nostalgia for mom and pop is more important than allowing American investors and managers to make the best decisions for the future—rather than attempting to recreate the past.
As with those local grocery and hardware stores, populist advocates for blue-collar workers have long lamented the closure of domestic manufacturing facilities and declining employment in that sector. But US manufacturing output itself has not declined—it’s higher than ever, just produced more efficiently. The only way to turn back this trend, as with industries like agriculture, would be to force producers to intentionally make processes less efficient and more expensive. This idea, while it would no doubt temporarily create more low-paying jobs, would not do much for US global competitiveness.
But ultimately, populists, like their progressive cousins, are less concerned with employment in any particular sector, or even objective standards of living, as they are with intangible emotional states. Populist rhetoric is littered with outraged complaints about being “ignored” and “not respected” by politicians and “the establishment.”
This approach treats every other economic actor as a mindless chess piece to be rearranged into a more amenable configuration, according to the planner’s whim.
Oren Cass of American Compass laments an alleged “sense of powerlessness” about the “strain of unpredictability” in American life. But what are the legal and policy responses to societal alienation supposed to be? It may very well be the case, for example, that an increasingly tech-focused economy will have fewer opportunities for people with few tech skills. But attacking the nation’s most innovative and successful firms will not cause laid off coal miners to magically qualify for six-figure salaries.
While the enemies of Big Tech aggressively demand redress from Congress and the courts, they are also squishy on defining what exactly justifies their intervention. Lina Khan, a high-profile advocate for altering and expanding the scope of antitrust law, insists (along with Sen. Warren) that even firms that reduce prices and expand production are harming Americans. A 2018 profile in The Atlantic describes her initial interest in the issue: “Combing the papers for corporate-consolidation news, she started seeing monopoly power in everything.” [emphasis in original]
Which is exactly the problem. Khan is, for example, upset that book publishers now allegedly publish fewer unprofitable titles due to price competition from Amazon. But how many consumers are interested in paying higher prices so that Khan’s favorite obscure authors can get hardcover publishing deals? And more importantly, why are the individual consumer preferences of antitrust researchers suddenly the basis for regulating companies with hundreds of millions of customers?
Part of the problem is sloppy political rhetoric. Policy advocates and politicians alike rely on lazy terminology that calls for “society” or “the economy” to do or be something specific. Then Vice President-elect Kamala Harris tweeted in December that Joe Biden nominee Neera Tanden “knows firsthand the importance of an economy that treats all people with dignity and respect.”
This is precisely the road to serfdom that Friedrich Hayek described more than 75 years ago.
This is an emotionally arousing phrase, but obviously not literally true. “The economy” is a national (or global) abstraction, not a sentient entity that is capable of exhibiting human characteristics. People, and the specific institutions they collaborate to build, can and do address such things. It is not a mere point of semantic pedantry to insist on the difference. Government agencies can do certain things, as can corporations, nonprofit groups, educational institutions, fraternal organizations, and individuals. None of these are synonymous with “society,” or “the economy,” and anyone who presumes to speak on behalf of those abstract entities, over the multiple objections of a diverse population, is a totalitarian in training.
This is precisely the road to serfdom that Friedrich Hayek described more than 75 years ago. When people decide that “society” hasn’t yielded their preferred mix of products and jobs, this view insists, then it must be the responsibility of the government to force the rest of America into compliance. This approach treats every other economic actor as a mindless chess piece to be rearranged into a more amenable configuration, according to the planner’s whim. The free choices of millions of workers, suppliers, investors, and consumers have yielded a certain mix of jobs, products, prices, and dividends. But if a handful of people on a congressional committee or a federal task force decide that mix makes them feel uncomfortable, apparently it should all be slashed and burned—with the confident assurance that just the right bits and pieces will survive.
The United States was founded on the premise that the government exists to exercise a bundle of specific and limited powers, centered on the protection of the rights of citizens—including their right to own and dispose of their own property. Notably missing from the mandate of government is the guarantee of a certain number of firms in each industry or lifetime employment for anyone who has ever worked in a manufacturing plant in Ohio.
If you can’t show a specific legal harm or violation of your rights, you need to live with the fact that the rest of the world isn’t exactly how you’d like it to be.
The remedies demanded by the antitrust and populist camps would constitute an attack on innovation, economic growth, and, in case those seem too abstract, the retirement security of millions of hard-working Americans. All this for the emotional satisfaction of people who are unhappy that Instagram feeds you ads for things you actually want, or that underwear at Walmart is too cheap. This is hectoring Karenism raised to national policy. It is the world’s worst homeowners association as economic planning, except that instead of a cranky neighbor yelling about the color you painted your mailbox, it’s a US senator trying to unilaterally micromanage the software engineering of a multi-billion dollar tech company.
If you can’t show a specific legal harm or violation of your rights, you need to live with the fact that the rest of the world isn’t exactly how you’d like it to be. The powers of the federal government are not a plaything, and they certainly aren’t there to be used as a weapon against the people you dislike, just because they’re arrogant, annoying, or operate a business that you don’t think “deserves” to be as successful as it is.
There are many ways to work for the positive outcomes you’d like to see in the world, but too many of us seem to prefer the have-politicians-attack-people-I-don’t-like strategy. It’s less work, but a lot more destructive.
Americans need to reject that path and get to work building a better future together.