Facebook, John Sherman, Lena Khan discussed on What Next | Daily News and Analysis


Check big business is to make sure that they have rivals so they have to compete with each other instead of fighting to just take over the government which is what they're doing now and that's what the point of antitrust is and was and price is only part of that story this out in two thousand seventeen and it really was explosive and you see a lot of skepticism around big tech right now but the reason is largely because of the movement that lena con has been leading. So that's what's so important about her is she's reoriented. The intellectual foundations of antitrust in the political foundations of antitrust and basically how we do business in america. You're talking about how. Lena connoisseur reorienting to an earlier idea of antitrust and i was reading that she found a quote from nineteen zero five from a journalist named ida tar bell. Who's writing about john rockefeller. And when she read this quote which basically describes rockefellers patient like a general who looks out at the field. And it's like okay need to capture that tiny little hill over there that tiny little hill. And if i do all that. I'm going to get the whole field. She looked at this and she thought this is exactly what jeff bezos is doing like he's just capturing all these little pieces of the market and all the sudden he's going to be running the whole thing. Yeah i it's funny. I remember when she was she was working on that article and she you know she's just was like it's amazing. You know you read about rockefeller. And it's like you're reading about bezos you know. In many cases they use some of the same tactics fighting the same political battles. You know it's it's it's pretty much all the same. There really are no new scams or no new ways to monopolize. It's always the same thing it's always. Acquiring bargaining power surveillance rebates kickbacks bribes. A lot of the coercive practices. You know you have new things like data but but you're basically using the same techniques to to acquire power with whatever technology is lying around. Can we talk about. Why the idea of what antitrust was or could be changed over the course of the twentieth century. You've alluded to that a little bit about. How the idea of antitrust evolution. So can you explain why we ever moved away from what we had back in the thirties. Sure so so. The anti monopoly. Tradition actually really goes back to the foundation of the country. Although antitrust is a late nineteenth century thing having to do with the formation of of industrial corporations but the anti monopoly tradition goes back much further and from kind of the moment that big business appeared. Big industrial corporations appeared eighteen eighties to all the way to kind of like the nineteen thirties. There were kind of debates about what do you do. How do you have a liberal democracy. Our republic and american state and society consistent with these big businesses. We've never had that kind of concentration of power. The only thing it looked like to americans that day was sort of some of the aristocrats elements. America had broken off from the kingdoms. And that's how. John sherman justified. The sherman act in eighteen ninety Talks about autocrats have trade and and kings of commodities. So you know there. There were a bunch of fights about what to do about like rockefeller and the firms that they had formed by the nineteen thirties. In the new deal. And what what have ultimately happened is is. The fdr smashed the power of the financiers. And while there were big businesses they were. They were forced to compete for network systems like. At and t. They were heavily. Regulated by the government and then for a lot of industries like banks us retail stores a lot of small light manufacturing farms. It was family size or slightly bigger and that was kind of the way that we organize. The economy and antitrust was a key. Part of that antitrust prevented big business for merging. It prevented them from cramming down their suppliers. It protected a retail stores from distributors. Did that look like just constant fines and lawsuits and approvals of mergers. What would it look like. It looked like a la mancha lawsuits. And you know and then lawyers. You know knew that this is what you can do this. But you can't do because the laws were the rules. Were pretty clear. They were interpreted through the courts but there were lawsuits in their work a lot of breakup of firms. And then also you had a private litigation so if someone is screwing me. I can sue them. It's possible to bring a case and and win that case and so you had a as an incentive system to prevent coercion things began to change in the nineteen seventies to academic schools of thought started having an argument about concentration of economic power on the left scores. Were happy to see. Businesses grow dominant as long as the government taxed them in redistributed. Some of that wealth on the right scholar saw hegemonic business as a natural growth of skill and needless to say the right didn't think such businesses should be highly taxed for their success but mad. Stoler he says. Both sides agreed monopolies. We're not inherently bad. If something looks unfair you know that's just maybe your perspective but it's if the big companies doing something that looks unfair. That's because the big company is good at what it's doing and you don't really understand it. Let's let's let those economists kind of the scientists figure it out and so i'm getting some real. Gordon gecko vibes here. Yeah i mean. That's gordon gecko. The the movie wall street was filmed in written in the nineteen eighties. Which was kind of just after this ideological transformation at happened that idea greed is good so liberal and conservative agreement like. Let's just not do this anymore. Yeah that's right. I mean the liberals the left and the right is still hated each other but the whole intent monopoly. Tradition fell away this agreement between the left and the right. You really see it. Take hold during the presidency of ronald reagan. He started dropping antitrust cases firing lawyers relaxing laws and appointing judges who didn't believe an antitrust enforcement the crucial point. Though is this this attitude continued. You can see it in decisions of both conservative and liberal supreme court justices you can see guiding the policies of the clinton administration and matt stoler. Says you can see it. During president obama's term to the obama administration was actively bad on this stuff. So what's what's really difficult. I think for most people understand about the monopoly. Problem is that it's really not a partisan issue and these ideas came from both the right in the laughed and they came from both political parties. So you know the ftc. Under obama had evidence of monopolization by google and instead of bringing a case in they decided to drop the suit in two thousand thirteen. A month after obama's re election when google ceo eric schmidt was sitting in obama's election war room seeing voter turnout. I mean conflict of interest much. Well there's tremendous. There was a lot of suspicions about deep corruption. But i think also the philosophical point. I'm making you know these guys really don't believe in decentralizing power because they think oh it's concentrate power and put our friends in charge and put the experts in charge. They know how to do stuff right. That's really their philosophy. And so i think it's it's really hard for. i think. Democrats to internalize that. It really is and democrat but it really is our fault and same thing with republicans. It it really. It really is kind of their fault to you. And so it's it's weird because everyone's looking for you know. Oh well it's the other guy that did it and we need to invest more on the ftc. And you know obama was good but he didn't go far enough and no actually what happened is there is this ideological revolution. That happened and reagan to obama even to trump somewhat that ideological revolution just continued and now we are reversing it going back to a traditional more traditional american view of the danger of monopolies counter revolution and antitrust take metzelaars. Got some ideas back in a minute in the right hands money can change the world. Another is a new kind of crypto currency. That is one hundred percent accessible to one hundred percent of everybody as more of us. join and use. Not the tokens. More value is created and return to people on the network. It is an economic system designed from the ground up to return value to the hands of its participants specifically you as you do. Well we all do well. Learn more at a nafa dot eye. High eye remedial. I'm a program manager at google right now. Lots of people are looking for ways to learn new job skills. That's why we created. Google career certificates and online training program for fast growing fields like it support project management data analytics user experience design. And more. you don't need any prior experience and you can be job ready in about six months so put your skills to work. Go to grow dot. Google slash certificates said that part of. What's hard for people to kind of get about what's happening at the ftc. Right now is how much what's going on. There is really about democrats and republicans. And what's interesting to me about. That is the fact that the confirmation of lena khan was bipartisan. As well and it seems like both parties have kind of come together to maybe not say oops out loud but to realize that. There's a problem here and they need to take a different tack. I'm wondering if watching her confirmation hearings you sort of saw. Democrats and republicans working through this life on air. Yeah i mean it's been happening for a few years. What is fascinating is that. Lena con is a progressive. And she's not shy about it. She's aggressive to like so during her confirmation hearing. She said there's potential criminal activity and she was alluding to price fixing between facebook and google in ad markets. I'm a some of the lawsuits that were filed last year. I think underscore these issues as well as potential criminal activity as well so i think it will be important to continue seeing how those lawsuits play out. You would think just a few years ago if you had somebody in one of these positions making allegations about some of the most powerful firms in the country you would think are. They're going to really have a rough road right for confirmation to put someone progressive. The republicans are gonna hater and the moderate surgery. Nfl all squishy. But what's interesting. Is that in fact what happened. Is that the moderates are the ones on the ropes. Because the moderates are the ones who led us to the status quo which everybody hates the fact that seventy five percent of industries in america have gotten more concentrated over the last twenty years and of top five tech companies. They bought a thousand firms and nobody. They didn't stop a single one. They're everyone's really angry about that. And so lee kong gets up there and says you know. Here's my philosophy. Here's my track record. And then she gets twenty two republican votes in the senate. And that's just. It's just astonishing and a real sea change in how we understand politics. I wonder if there's kind of a sense of relief in washington bringing someone like lena con in because having lena con allows them to feel like she's gonna handle it for us. We don't need to solve this one right now. you know. we're putting this person in place and hopefully that all right the ship here. There's definitely some of that. I think when you write a letter to the ftc your senator and you're like hey we pass this law asking you do this thing. The ftc usually takes those ladders and ignores them and so senators and members are really frustrated because because ftc staff and and leaders really don't believe in governing they really don't want to interfere in the business world they feel like that's inappropriate and so to have someone who's going to govern who's going to start using the authority the late night the ftc. I think is a relief. And i think it'll be interesting to see what happens when you know. When and if con- is able to start governing and starting start to say we are going to start restructuring these industries and banning unfair practices. And not letting monopolist run the show. What happens then and that's kind of an. That's kind of an open question. Yeah i mean you've written about. How even when ftc does do something. It's often not enough. And they don't seem to be taking charge of their role like they find facebook five billion dollars which sounds massive for being careless with users personal information but the ftc didn't even announce it facebook announced it an earnings call and even five billion dollars. It's not even that much for facebook. Facebook stock went up by forty billion dollars when they announced it so it was just kind of like a joke. And that's what i think. The ftc is perceived. You know. I think so. Commissioner row hit chopra. Who's a different ftc commissioner. He said that having a consent decree from the ftc is seen now kind of as a right of passage by silicon valley firms. Right so it's it's it's pathetic but there's a broader issue here and this is i think why lena connoisseur important which is that you have a crisis of the rule of law more broadly. So if you look at something like the sackler family and purdue pharmaceuticals which is the whole opioid crisis. You know these guys are drug dealers and it really should have been in jail for what they did you know but the the doj and the government let them off the hook and you saw this with the financial crisis were not a single banker of any importance went to jail and you know you see this over and over there is simply lawlessness. In our economy writ large and the ftc's a big part of it. It's not the only agency that's proven to be. You know feckless. But i think having somebody who's going to really focus on fairness in competition in america can really change that dynamic notches at the ftc. But i think kind of across the government in general and that is actually what the people want it's increasingly. I think what congress wants. People are very confused. They're very afraid of the idea of wielding power to govern. But i they're open to it. Here's what i think is going to be a little bit interesting about what happens with lena con once she gets going you say the people behind what she wants to do but once you start to corral big companies i just wonder if prices are gonna go up for people and if that will then become a big stick that can be used politically against whoever's in power to say. Listen people your prices are going up. Because he's people are being regulated more. And that's the way the cookie crumbles. We're already seeing already. Seeing this happen with inflation when it comes to stimulus money going out the door. So i wonder if you think about that too. Yeah i mean what you're essentially saying in in different words is that these firms are so powerful that they are ungovernable. Yeah and. I think that that is an open question. The idea that we the people through our governing institutions with people that we elect cannot touch. these firms. Leads us to the question. I mean i don't necessarily believe that that's true. But i don't know that it's not true but i think it does lead to the question of do we really live in a democracy if our government can't touch the corporate sector. What does the history tell you about how long this work takes this kind. Of course correction. I think it'll take generation. I mean every generation gets its chance to secure freedom or to give up on freedom because freedom liberty is a scary thing right because it means that that governing you have to govern yourself fundamentally as a human being and what the monopolist ultimately promises. Don't worry i'll take care of you. All you have to do is surrender your liberty to me. And it requires a sense of confidence. Among the people among policymakers in our democratic institutions. And it's a never ending struggle. If you stop fighting for your own freedom if you stop having courage that you can be a free person live in a free society you lose that free society so we earn a pretty deep hole. So i think it'll take twenty to thirty years but it can. We can have some stuff almost immediately but to get back to where we were in terms of like our institutions. Like yeah we can. We can It'll it'll take a while but it's gonna be fun. That's the other thing is this stuff is really fun and really innovative matt. Stoler thank you so much for joining me. Thanks a lot. Thanks for having man. Stoler looks at the american economic liberties project. He's also the author of the book goliath the hundred year war between monopoly power and democracy. You can go check out his subject. It's called big and that's the shelf. What next is produced by mary. Wilson carmel shot lena. Schwartz daniel hewitt and davis land. We are led by allison benedict unleashing. Montgomery and mary harris. You can find me on twitter. I'm at mary's desk. And if you wanna make us the most dominant monopoly of a daily news podcast. Go leave us a review. Go do that on itunes or wherever you listen in the meantime i will catch you back.

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