It is not often that a Pulitzer Prize-winning dramatist gives the keynote speech at a competition policy conference. But last week in Washington, I introduced PEN America president Ayad Akhtar before he gave the lunchtime address at a conference on monopoly policy sponsored by the Open Markets Institute.
The pairing wasn’t as random as it might seem. The narrator of Akhtar’s most recent book, Homeland Elegies, is a Pakistani immigrant whose family came to what they believed to be the land of opportunity, only to realise that America had turned, over time, into a country in which hyper-individualism had collided with the money culture. The result? A society in which it is easier to protect shareholder rights than civil rights.
The novel, read in book clubs across America, contains not only lengthy excursions into antitrust jurisprudence, but also critiques of financialisation and healthcare for profit. It also examines all the ways in which “protecting the consumer’s right to the ‘lowest price’ as a first principle has operated as the legitimising discourse of the takeover of the political process by big (and ever bigger) business”, as Akhtar put it. “In other words, our political order — by which I don’t just mean legislative — is increasingly defined by corporate thinking and interest.”
When monopoly power becomes a kitchen table topic in America, something embedded in popular fiction, business leaders should listen carefully. The popularisation of antitrust is part of a much larger shift in which economic policy discussions are increasingly the purview of not just economists, but also lawyers, activists and ordinary people. These groups are less interested in technocratic debates about market mechanisms than in a grassroots discussion about how corporate power has distorted the market in ways that they find absurd.
Consider sales contracts that make it impossible for farmers to repair their own equipment rather than paying for the costly services of the manufacturer. Or the minimum wage cleaning staff stuck with non-compete clauses that prevent them from doing janitorial work for a company that might offer a dollar or two extra per hour. Or the fact that, until recently, simple over-the-counter hearing aids weren’t available because device makers made it impossible to buy them without a costly prescription (Senator Elizabeth Warren’s bill overturning that in 2017 was one of the very few things that she and Donald Trump agreed on).
Part of this shift towards a kitchen table sensibility in competition policy is down to an increasing public sense that the economics profession itself has been captured by corporate interests. As Cristina Caffarra, an economist and consultant on hundreds of corporate mergers, put it at the event, “economists make up useful narratives and sell them to lawyers”. They then use this seemingly scientific testimony to argue their cases.
But the current crop of regulators in Washington is much less interested in economic assumptions about how markets, many of which are increasingly questioned, particularly in the digital space, should work. Instead they prefer a more inductive approach to the truth, in which facts are laid out in a reported fashion and judged on their own merit.
This sort of approach is what brought Federal Trade Commission chair Lina Khan and Department of Justice antitrust chief Jonathan Kanter to their positions. Their starting point is that economics is structured by politics, and politics tends to be structured by those people with the most money. Thus, traditional economic theories about markets are no more, or less, useful than the collection of real world facts that either side can bring to a case.
As Kanter, who sat on one of the panels, put it, “the discussion [about corporate power] now is about real people, and that’s very different than the technocratic conversation we were having when I came into the field. And I think it’s crucial to having an honest conversation.” To him, thinking around antitrust policy should include anything that makes it impossible for individuals to have full self-determination, in the sense of being able to make the choices that might afford them a better life. That’s an antitrust philosophy that’s much more aligned with ideas of constitutional democracy than with the Chicago school.
It’s also a broad definition, and one that has yet to be fully proven out in court. Despite more federal resources, more state antitrust cases and an explicit 2021 White House executive order with 72 different initiatives from federal agencies designed to tackle competition problems, the global mergers and acquisitions market hit an all-time high in 2021 (2022 numbers were lower but still healthy compared with pre-pandemic levels).
Perhaps that’s why Warren, who also attended the conference, called for an even broader competition agenda, going beyond her arguments about breaking up Big Tech. Among other things, she called on policymakers to oppose more questionable mergers outright rather than deploying “remedies” (which are costly to enforce and easy to game), to hold executives personally responsible in criminal cases if their companies violate antitrust laws and to halt private equity roll-up strategies. Warren has a record of setting the policy agenda in antitrust. CEOs should watch this space carefully.