Anti-lib antitrust

How the next Trump administration's attitude toward corporate competition could be worse than nothing.

“The kind of antitrust legislation that is needed,” J.S. Pughe, Nov. 29, 1902. (Library of Congress)

Knowledge of antitrust doesn’t come easily. It can be taught, usually to especially bent or nerdy lawyers and economists, or learned, primarily by the hapless victims of nonenforcement.

Now maybe the knowledge can be transmitted by malenforcement.

This week Donald Trump selected a purported antitrust hawk, J.D. Vance aide Gail Slater, to take over competition enforcement at the U.S. Department of Justice. Trump is reportedly “expected to be tough on tech and media companies seeking to do deals but was likely to be more lenient with major oil, natural resource and healthcare companies,” with one Trump source telling the FT, "Trump has no problem with Exxon and Chevron merging, but he won't let Big Tech do anything."

This is anti-liberal antitrust, suggestive of selective enforcement of the Sherman Act to harass Trump’s enemies while allowing allies to consolidate control over larger swaths of the American economy, which is recently presenting even more acute symptoms of oligarchic decadence than usual.

When mother of the world’s wealthiest midlife crisis sits in on government budget planning meetings, you know the cruft has been swept away as the meritocracy finally delivers us the best people for the job. “It’s going to be very easy,” Maye Musk told Fox News.

The incoming era of illiberal enforcement will be an education for all of us, the new management and suffering public alike. Nobody is born with a natural passion for competition policy. That would be like saying your favorite childhood food was stale bread. Something would have to be seriously wrong with you, maybe medically. Bullying conditions would prevail in the schools.

Boringness has been a critical defense mechanism of antitrust, at least the practice of it over the past half-century, both in terms of the dryness of the data-driven evidence and the nonexistence of enforcement.

By introducing the consumer-welfare standard of harm, Robert Bork’s “Antitrust Paradox” had ended the more exciting “coonskin hat” era of competition enforcement inaugurated by Teddy Roosevelt, "the blind firing of muskets at companies that just seemed bad," as Tim Wu summarized the criticism in his book “The Curse of Bigness.”

“A young head on old shoulders,” Udo J. Keppler for “Puck” magazine, Nov. 1, 1899. (Library of Congress)

As a layperson who has carefully surveyed our present corporate landscape, I cannot tell a lie: Blindly firing antitrust muskets at companies that just seem bad would probably have a pretty high accuracy rate.

The startling durability of COVID-19-era business startups, by people dislodged from their old offices and sitting on sweet stimmy cash, suggests that incumbent corporate squatters have been strangling the dynamism even of their own talent across much of the U.S. economy. (Fellow journalists, the stalling-out of digital startups in our own corner of the economy is a sad exception.)

But I also appreciate that practicing judges want more falsifiable criteria to justify smashing giant companies acting irresponsibly. Antitrust rules like the Sherman Act are laws, and laws should be applied fairly.

Wu, however, thought this was a “culture war” Bork won rather than a scientific one, “by convincing a vast middle comprising practicing lawyers and judges seeking respectability with the appearance of rigor.”

Bork radically narrowed and altered the meaning of Congress’ Sherman Act, which mentions neither consumers nor prices, but does say that “every person who shall monopolize, or attempt to monopolize … any part of the trade or commerce among the several States” shall be criminally guilty of a misdemeanor with up to a year in prison. One could dream.

“The Senate that trusts build,” L.M. Glackens, ca. 1890-1918. (Library of Congress)

“Absolute certainty in the face of much contradictory evidence is classic Bork," Wu wrote, adding, “Bork, who styled himself an opponent of 'judicial activism,' was perfectly happy to allow his own political and economic preferences to trump the clearly expressed will of Congress.”

For such a purportedly evidence-based standard — and I stress here that the purportedness was a primary feature — the gospel of consumer welfare happily held open the door for massive reconsolidation in the American economy. The premise was that competition is protected, but not the existence of competitors.

In slithered central-planning tentacle creatures like Amazon’s Jeff Bezos, who drove costs lower for consumers to the point of eliminating competitors, often by squeezing the workers and producers supplying everything. Those rock-bottom-priced packages landing on your doorstep come from Amazon warehouses with worker injury rates 71% higher than peer facilities.

“Amazon’s closest encounter with antitrust authorities was when the Justice Department sued other companies for teaming up against Amazon,” now-FTC Chair Lina Khan wrote in “Amazon’s Antitrust Paradox,” the decades-in-the-making retort to Bork that made her famous. “It is as if Bezos charted the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them. With its missionary zeal for consumers, Amazon has marched toward monopoly by singing the tune of contemporary antitrust.”

And it’s still not good enough! “We do have too many regulations in this country,” Bezos said at the New York Times’ DealBook Summit in New York yesterday. Bezos said that Trump “seems to have a lot of energy around reducing regulation. If I can help do that, I’m going to help him.”

"Next!" by Udo J. Keppler, 1904. (Wikimedia)

In one sense, this crumpling of billionaires and powerful CEOs at Trump’s feet could be seen as an elite reaction to the Biden administration. Biden briefly made antitrust interesting again by embracing trustbusters like Wu and Khan, who follow the democratic-minded approach to antitrust advanced long ago by Supreme Court Justice Louis Brandeis — the dream of a far more decentralized economy where more freedom can flourish.

A noticeable chill fell over the progressive antitrust agenda after Biden’s withdrawal, as some campaign supporters openly lobbied replacement Kamala Harris campaign to dump Khan in particular. “She’s hitting the pocketbooks of Biden donors,” Dmitri Mehlhorn, a recent political advisor to Reid Hoffman, told Bloomberg. “The money that was going to be given to Democrats isn’t there.”

During its most recent Justice Department antitrust trial, Google lead defense counsel, Karen Dunn, darted out of opening arguments to prep Kamala Harris for debating Donald Trump. Following Trump’s reelection, the Democratic super PAC Priorities USA courted activists ready to "resist the Republican agenda," with an afterparty "co-hosted by our friends at Google." It turns out that monopoly money has been helping prop up the Democratic Party through its abandonment by working-class voters.

But the even darker interpretation of the curtsying by Bezos and co. is that Trump, by offering the carrot of deregulation alongside the stick of an overtly illiberal trustbusting, can pervert the breadth of neo-Brandeisian trustbusting into neo-fascist discipline. The monopolization of Hungarian media under Viktor Orbán’s illiberal regime has been critically enabled by selective enforcement by competition regulators. The domination of centralization is the bounty for the state’s allies, and the enfeeblement of decentralization the lot of the state’s enemies.

At least the consumer-welfare standard was supposed to be an equally and consistently applicable standard — even though its ultimate inapplicability paved the road for our new plutocrats, whose once-varied interests in infrastructure, transportation, communication, media and regulation are merging into a dominating mass. Into a single, reactionary trust.