DriveByCuriosity: Economics: The Real Purpose Of The New Antitrust

(Drivebycuriosity) - There is a new antitrust in the US. The old antitrust politics aimed to protect consumers, especially against unjustified price hikes and other wrongful corporation behavior. The new trustbusters, called Neo-Brandeisians (after Supreme Court Justice Louis Brandeis, 1916-1939) don`t care about consumers, they want a fundamental change of America´s economic structure (ftc.gov pbwt.com).

The sea-change is led by Lina Kahn, Chair of the powerful Federal Trade Commission (FTC), America´s antitrust authority, Jonathan Kanter, head of the antitrust division of the department Justice (Justice ATR) & Tim Wu, Special Assistant to the President for Technology and Competition Policy. The powerful Neo-Brandeisians are supported by Senator Amy Klobuchar & other Senators who drafted altogether five antitrust bills (!) which are working their ways through Senate & Congress. The new antitrust movement, also known as hipster antitrust, has the blessing of President Biden, who issued an executive order to empower the antitrust enforcers across different agencies.

The new trust busters have to two goals: (1) an official and (2) a hidden.

1. Antitrust Counterrevolution

FTC Chair Khan and her fellow Neo-Brandeisian activists try to expand significantly the government’s role in the U.S. economy ( dailyjournal promarket). Kahn announced an "Antitrust Counterrevolution" and Barry Lynn, Kahn´s Coauthor & Mentor, compared the previous antitrust enforcers with Vladimir Putin and Xi Jinping and claimed they ignored outsized influence of tech companies, environmental problems and wealth inequality (newyorker theinformation ).

The new trustbusters loathe consumer welfare, meaning protecting the consumer (which is still the logo of the FTC). Sandeep Vaheesan, another Kahn Co-author, declared consumer welfare as "nonsense" ( law.columbia). Instead they want to fix issues like underemployment, income disparity, political power, and wealth accumulation (thehill ). FTC commissioner Rebecca Slaughter demands that “antitrust should be used to accomplish political and social goals” ( thecentersquare).

The Neo-Brandeisian activists view large companies as evil and they prefer that the government, rather than the private sector, orchestrates the functioning of the economy" writes ( .ftc.gov). Biden adviser Tim Wu claims that, "efficiencies (caused by size), productivity, declining costs, and cheapening of commodities" are bad. Some activists regard consume as vulgar and bad for the planet ( vox.com). The rhetoric of the Neo-Brandesians is close to the Marxist ideology which aims for a socialist society, where the means of production is controlled by the state, and planning will substitute for competition as the economy’s steering mechanism ( ftc.gov).

Biden protege Lina Khan has an explicit beef with Amazon and has stated publicly, absent any formal hearing, that the company is guilty of antitrust violations and should be broken up." (yalejreg.com wsj.com). Instead of fighting against price hikes Lina Khan and other Brandeisian Big Tech crusaders fight against low prices (yalelawjournal reason). They claim that low prices destroy competition, hurt workers and ruin the environment (vox ).

2. Control & Power

The Neo-Brandeisians - like all politicians & bureaucrats - want to profile themselves, foster their careers and boost their power. "Nothing stops politicians looking to make names for themselves" says Patrick Hedger ( insidesources).

There is already a cult around Lina Khan. New York Times, The New Yorker and the Twitter crowd celebrate her like a rock star. Khan became famous when she - then still a law school student - published an anti-Amazon paper (claiming that Amazon`s prices are too low which are destroying competition, ignoring Walmart and the rise of Shopify and myriad other onlineshops), which was celebrated by New York Times and other Amazon haters. Short after his inauguration President Biden announced Kahn as Chair of the FTC.

Khan has swiftly consolidated her power and undermined the Congressionally-mandated Commission structure. She claims that she has the "authority to decide what is & isn't unfair competitive conduct" ( twitter). By a command-and-control style approach Khan fundamentally changed the FTC and how America approaches competition policy" (insidesources politico truthonthemarket twitter twitter). Khan`s harsh regiment already caused turmoil in the FTC and influenced many talents to leave (marginalrevolution).

Like Kahn are opportunistic senators & representatives like David Cicilline, Josh Hawley, Ken Buck, Pramila Jayapal and others building their careers on Big Tech bashing. And former star high school basketball player Karl Racine, Attorney General of the District of Columbia, is collecting headlines in the media by harassing Amazon with lawsuits ( twitter).

The Neo-Brandeisians and their crusade against Big Companies get a lot media attention which might attract potential voters and impress political leaders (including the President). Biden already expanded the budgets of the FTC & Justice ATR. Senator Klobuchar´s antitrust bill aims to expand the budgets of the antitrust authorities even further. It seems that Klobuchar wants to follow Biden as President and is using her famous antitrust Senate Bill 2992, the “American Innovation and Choice Online Act,” to gain the reputation she needs to leap to the front of the pack running for president the next time the Democratic presidential nomination is up for grabs, writes Peter Roff (noozhawk ).

"All of this is coupled with an oversized federal presence for enforcement, from greater congressional oversight to enhancing the powers of both the Department of Justice and the Federal Trade Commission through expanded budgets, more onerous reporting requirements, and an invigorated use of merger retrospectives" writes Wayne T. Brough (aier.org ). More regulation also encourages corruption because powerful politicians & bureaucrats can blackmail corporations by threatening them to regulate them more (ssrn).

Conclusion:

The Neo-Brandeisian activists are a threat to the US economy (nationalaffairs ). They want to turn antitrust law upside down so that it may be weaponized to shape and plan all sectors of the economy and they want to shape. FTC & the Justice ATR already hold - unlike private businesses - a legal monopoly on the right to use or authorize the use of force (truthonthemarket ). The hipster antitrust crowd wants to turn these agencies into Big Brother overseeing the whole economy.