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"Free markets killed capitalism," Or really, the other way around.
June 30, 2014 8:59 PM   Subscribe

Monopoly is back: Barry Lynn on the concentration of American economic power — and how we can restore fairness. Highlights:
"There is no market here whatsoever. Any real market is open. Prices are transparent. You can enter it or exit a real market at will. You can compare contracts. So the free market ideology basically leaves us free of markets. The free market ideology is the fastest way to complete concentration of power."
"We’ve got a lot of old-fashioned 'small d' democrats, 'small r' republicans in our party, people who believe in community based democracy and industrial liberty. That’s probably the great bulk of us, probably 90% of the members of the Democratic party believe in a Jeffersonian, Wilsonian, Brandeisian political economics. And that’s probably true for the majority of Republicans too. But then in our party you have this overlay of the old-fashioned Progressives, of people who still really believe that the main thing we should aim at is efficiency, and these people wield real power in the party. And then in the Republican Party you’ve got a leadership controlled by a weird amalgam of straight up feudalists and insane libertarians, who live entirely in a realm of theory and myth, and who also say that the main thing we should aim at is efficiency."
posted by cthuljew (47 comments total) 47 users marked this as a favorite

 
Leftists like to deride positions petit bourgeois, the efforts of small capitalists to retain their privileges against both the inexorable tendency of capital to concentrate and the resistance of workers. But man is this ever stereotype-confirming.
posted by wobdev at 9:05 PM on June 30 [2 favorites]


The More You Know!

"Well, legally what happened was that in the early days of the Reagan Administration, one of their very first actions was to say, hey, these anti-monopoly laws and antitrust laws that you use to make markets, and create competition, and spread out opportunity, and insure industrial liberty, and, protect our democratic institutions—all these many laws that make up our competition policy, wouldn’t it be better if we take all of these laws and simplify them, so we aim at one outcome only, efficiency? Because if we are able to make our economy more efficient, we’d be able to produce more stuff for you, the consumer. Won’t that be a swell world to live in, with more stuff for you, the consumer?"

"The Reagan people came in and said, we’re going to impose this radical change to your antitrust laws which you’ve been using since 1773 to protect yourselves against concentrated power. . . Here we have laws that go back 200 years in America, and 400 years to Elizabethan times, and 800 goddamn years to the Magna Carta, and the Reagan people came along and said hey, ya know what, we’re so much smarter nowadays, we’re technocrats, we’re scientists, so let’s take these laws and enforce them in a slightly different way, based on this slightly different goal, this scientifically determined goal of efficiency, and you’re going to be so much happier because we’re going to help you live better as a consumer, we’re going to get you so much more stuff. When they said that, there was some real opposition from both Democrats and Republicans. Metzenbaum was against it. Arlen Specter was against it.

Not much of a Republican.

Well, back then he was a pretty mainstream Republican."



Seriously a great article. Everybody should read it.
posted by QueerAngel28 at 10:42 PM on June 30 [7 favorites]


This interview puts the rise of the tea party into an entirely different light.

So, first question for all candidates from here on out is, "What's your position on the enforcement of the Sherman Antitrust Act?" Yeah?
posted by ob1quixote at 10:56 PM on June 30 [2 favorites]


Leftists like to deride positions petit bourgeois, the efforts of small capitalists to retain their privileges against both the inexorable tendency of capital to concentrate and the resistance of workers.

What?
posted by cthuljew at 11:13 PM on June 30 [5 favorites]


His book on this is the best book I have read in a year. Helps bring some history and perspective to what we have been observing: leveraged buyouts, offshoring, starving R&D. all in there.
posted by brewsterkahle at 12:22 AM on July 1 [3 favorites]


GODDAMNIT WHY IS NO-ONE GETTING THE MEMO. SHIT IS OVER. YOU'RE SQUABBLING OVER NONEXISTENT MORSELS.
posted by Token Meme at 2:05 AM on July 1 [4 favorites]


We were warned, but we said, what brilliant satire.
posted by thelonius at 2:15 AM on July 1 [3 favorites]


Really fantastic interview.

One thing that I think is under-appreciated is how much neo-conservatives and other anti-communists were motivated by their belief that the Soviets actually held an advantage over us due to communism. You don't fear a country whose economic, political and military system is inferior to your own. They may have held a belief that democracy and capitalism was important because of individual liberty and happiness, but they thought that communism was more efficient and would eventually defeat us in the long run.

A lot of the Team-B second guessing in the 70s, etc, was because they simply couldn't believe that the US held such a vast military and economic advantage over the Soviets. They believed they were an existential threat to us until the day they collapsed.

Regulated monopolies are really kind of an attempt to implement a command economy without labeling it as such.
posted by empath at 3:36 AM on July 1 [17 favorites]


You don't fear a country whose economic, political and military system is inferior to your own.

Maybe not really, but the American public has certainly been fed a lot of bullshit about how dangerous small, inefficient, powerless states are to the US. Afghanistan, Iraq, Iran and the whole "axis of evil" stupidity.

Its always useful for someone in power to have an external enemy to point to.
posted by Harald74 at 3:56 AM on July 1 [5 favorites]


But then in our party you have this overlay of the old-fashioned Progressives, of people who still really believe that the main thing we should aim at is efficiency, and these people wield real power in the party.

I...don't think that's what "old-fashioned Progressives" are known for. At all.
posted by clockzero at 4:10 AM on July 1 [6 favorites]


I am investing in torches and pitch-forks.
posted by Flood at 4:17 AM on July 1 [1 favorite]


One thing that I think is under-appreciated is how much neo-conservatives and other anti-communists were motivated by their belief that the Soviets actually held an advantage over us due to communism.

Some of that was due to the demonstrated intelligence advantage the Soviets had over the United States and other powers in the 1950s and 1960s, which made overestimating Soviet capability in other areas that much easier.

More generally, though, anti-communism was never a pro-democracy movement. Really, it wasn't even pro-free market in the usual sense, since it was perfectly happy to create economic client states ruled by friendly dictators in the cause of pro-market reformism.

Most ideological counterformations tend to attribute vast, unethically wielded powers to their opponents and then try to mimic that power fantasy themselves. Take extreme anti-federalism, which is resistant to a national centralized government but is often perfectly happy to hand over incredibly intrusive powers to the states. In such circles the language of "natural rights" is quite misleading, as it's less an opposition to government overreach than a desire to give considerable powers to local government officials. Notice how many opponents of a strong federal government cheer for folks like Sheriff Joe Arpaio.

And they, similarly, have a view that the Federal government or the supposed "world government" is incredibly powerful, efficient, and organized tot he point of having absolute power over daily life.
posted by kewb at 4:44 AM on July 1 [7 favorites]


My consciousness of this topic came through Michael Parenti's Democracy for the Few and the last time I recall this topic receiving the attention it deserves was due to Clear Channel. A meaningful analysis should include US history, but also acknowledge corporations presently supercede the agendas of nation states. And that's where the topic becomes complicated-- because of standards of living all over the world and a universal inclination (I so suppose) to seek comfort and material wealth.
posted by lazycomputerkids at 4:48 AM on July 1 [1 favorite]


Most ideological counterformations tend to attribute vast, unethically wielded powers to their opponents and then try to mimic that power fantasy themselves.

This is not to say that they're always wrong, of course, just that total commitment to counter-ideology tends to lead to bad places.
posted by kewb at 4:48 AM on July 1


It would be nice if we could start a tea-party-esque political movement based entirely on breaking up near-monopolies like Comcast and walmart. No agenda other than that. Not even focusing on banks. Call it the pro-small-business party or something.
posted by empath at 5:08 AM on July 1 [1 favorite]


It would be nice if we could start a tea-party-esque political movement based entirely on breaking up near-monopolies like Comcast and walmart. No agenda other than that. Not even focusing on banks. Call it the pro-small-business party or something.

You realize that antitrust efforts were a thing back in the day. And yet, here were are now with monopolies again. Does that not give you pause viz. the long-term effectiveness of such a strategy?
posted by Noisy Pink Bubbles at 5:22 AM on July 1


"You realize that antitrust efforts were a thing back in the day. And yet, here were are now with monopolies again. Does that not give you pause viz. the long-term effectiveness of such a strategy?"

Only in the sense that it is a dynamic, ongoing ever-changing landscape, ontology, whatever.
A dialectic. The kudzu will always have to be cut back every so often. Let the business grayhound chase the monopoly rabbit all it wants, just never, ever, let it catch it.
posted by Chitownfats at 5:32 AM on July 1 [3 favorites]


Yes, politics is a process that never ends. I don't know what you propose to end the problem of monopolies for good.
posted by empath at 5:32 AM on July 1 [1 favorite]


Err, jinx empath.
posted by Chitownfats at 5:35 AM on July 1


Ending capitalism would solve the monopoly problem
posted by Noisy Pink Bubbles at 5:42 AM on July 1 [3 favorites]


Like that time they ended feudalism and solved all sorts of problems
posted by save alive nothing that breatheth at 5:50 AM on July 1 [4 favorites]


I thought Settlers solved the Monopoly problem
posted by postcommunism at 5:55 AM on July 1 [14 favorites]


Sometimes people look at an economic problem and think "Let's ban capitalism." But now you've got two problems.
posted by empath at 6:02 AM on July 1 [1 favorite]


I'm not saying abolishing capitalism is an easy task, obviously. People have been thinking about this and trying to do this for a while and thus far all efforts have failed. Nevertheless, it's something humanity must do in order to survive. "Socialism or barbarism," as the old slogan goes.
posted by Noisy Pink Bubbles at 6:09 AM on July 1 [2 favorites]



I'm not saying abolishing capitalism is an easy task, obviously. People have been thinking about this and trying to do this for a while and thus far all efforts have failed. Nevertheless, it's something humanity must do in order to survive. "Socialism or barbarism," as the old slogan goes.


...and you propose in its stead, what exactly?

Properly regulated capitalism is like democracy; the worst solution, except for all the others.
posted by leotrotsky at 6:12 AM on July 1


And if you don't think that abolishing feudalism was a victory for society... I really don't know what to say.
posted by Noisy Pink Bubbles at 6:13 AM on July 1 [4 favorites]


...and you propose in its stead, what exactly?

Communism. Seizing control of the means of production from these exploitative monopolies we've been discussing and producing for use, not for exchange. Actually taking humanity's destiny into our own hands instead of having it being dictated by the whims of profit.

Properly regulated capitalism is like democracy; the worst solution, except for all the others.

Yes, and it would be nice to have democracy instead of the monopoly-run government that we now have which, I agree, is less preferable.
posted by Noisy Pink Bubbles at 6:20 AM on July 1 [1 favorite]


You realize that antitrust efforts were a thing back in the day. And yet, here were are now with monopolies again. Does that not give you pause viz. the long-term effectiveness of such a strategy?

That is literally exactly like saying, "Hey, we tried to handle this whole murder thing with laws, but as you can see, despite all our efforts, we still have murder, so doesn't that give you pause?"

Some problems never go away because the underlying causes are structural and to some extent inevitable, but you still have to manage them and deal with them. In fact, those are usually the kinds of problems you most need to worry about managing.
posted by saulgoodman at 6:23 AM on July 1 [4 favorites]


Comcast is a natural monopoly - or really part of a duopoly where mutually assured destruction is the result of any competition. The issue isn't that its a monopoly, its how its regulated. Or rather not regulated in a meaningful way.

Walmart's more problematic - not simply because of its market share, but also the market power it holds with suppliers is such that it is extremely difficult for a new bricks and mortar entrant to compete with them.

The other day in a thread about The Trade in Services Agreement Symbioid pulled out an Adam Smith quote - that was totally taken out of context in that thread as I pointed out - but is essentially exactly on point here.

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary. "
posted by JPD at 6:23 AM on July 1 [2 favorites]


Some problems never go away because the underlying causes are structural and to some extent inevitable, but you still have to manage them and deal with them. In fact, those are usually the kinds of problems you most need to worry about managing.

No doubt, but it is possible to change the underlying conditions that cause monopoly, rather than continuing to recurrently swat at it like some annoying fly. I know of no such comparable change that might eliminate, say, murder.
posted by Noisy Pink Bubbles at 6:27 AM on July 1


Seizing control of the means of production from these exploitative monopolies we've been discussing and producing for use, not for exchange.

Oh, okay, I thought we were discussing the real world.
posted by empath at 6:30 AM on July 1


I know of no such comparable change that might eliminate, say, murder.

Banning birth.
posted by empath at 6:30 AM on July 1 [1 favorite]


Seizing control of the means of production from these exploitative monopolies we've been discussing and producing for use, not for exchange.

I expect to rarely agree with another human being about what I need (use), its quantity and quality and what value others assign to it.
posted by lazycomputerkids at 6:31 AM on July 1 [1 favorite]


But then in our party you have this overlay of the old-fashioned Progressives, of people who still really believe that the main thing we should aim at is efficiency, and these people wield real power in the party.
I...don't think that's what "old-fashioned Progressives" are known for. At all.



Progressives and Efficiency.

Think "Technocrats" from the 70s and 80s or Kennedy's Best and Brightest.
posted by notyou at 6:33 AM on July 1 [2 favorites]


it is possible to change the underlying conditions that cause monopoly

Is it? From where I sit, the underlying condition that causes monopoly is the desire of some humans for vast wealth and unchecked, unopposed power. How are we fixing that again?
posted by mstokes650 at 6:34 AM on July 1


it is possible to change the underlying conditions that cause monopoly

No, Not really. That's why it is something that has been a concern going back to the very beginnings of capitalism.
posted by JPD at 6:36 AM on July 1


From where I sit, the underlying condition that causes monopoly is the desire of some humans for vast wealth and unchecked, unopposed power. How are we fixing that again?

No - that's not what "causes" monopoly. Economies of Scale and Scope cause monopolies to happen. Usually the more fixed a businesses costs are the more they trend towards fewer competitors.
posted by JPD at 6:38 AM on July 1


Oh, okay, I thought we were discussing the real world.

Look, as even you must recognize, there are serious problems plaguing our society that, if left unchecked, pose a threat to survival. Let me mention just one well-known and well-accepted one which is the threat to the environment. Now, carbon emissions track global economic growth pretty well, so stopping one is going to entail stopping the other. And stopping growth means ending capitalism. So, if we're at all serious about climate change, we're going to have to talk about changes to the economic system. This is the "real world" that we are living in, and celebrating capitalism (or grudgingly accepting it as the least worst option) is tantamount to marching ourselves off a cliff.
posted by Noisy Pink Bubbles at 6:52 AM on July 1 [1 favorite]


...and you propose in its stead, what exactly?

You can be a socialist without being a Utopian.
posted by cthuljew at 7:21 AM on July 1 [3 favorites]


"But then in our party you have this overlay of the old-fashioned Progressives, of people who still really believe that the main thing we should aim at is efficiency, and these people wield real power in the party."

"I...don't think that's what "old-fashioned Progressives" are known for. At all."

Progressives and Efficiency.

Think "Technocrats" from the 70s and 80s or Kennedy's Best and Brightest.


Huh, you're right! I didn't make that connection. Thank you for lending some insight.

I still think, however, that the commonality begins and ends with the word itself when we're comparing late 19th-early 20th century Progressives and modern evangelists of businessification.

Efficiency means improving the ratio of input to output, but the term itself is value-neutral, in that those inputs and outputs could be any number of parameters. In governance, for instance, one could improve institutional and cost efficiency by expanding Medicare into a single-payer program, whereas privateers of health spending insist baselessly that the free market is better and more "efficient," but only in ways that benefit private interests at public expense. So which paradigm is more accurately described as oriented to maximizing efficiency? There's no objective answer, it's merely a question of whose interests are served and what specific inputs and outputs are being rationalized.

This is why I say that characterizing an agenda as "aiming at efficiency" tells you much less than it apparently is thought to communicate about someone's actual goals and likely actions, and thus isn't a meaningful way to compare ideologies. The efficiency of the Progressive era isn't the efficiency of the neoliberal era, in short. And in any case, classical Progressivism is actually extremely different in many key ways from modern progressivism.
posted by clockzero at 7:48 AM on July 1 [1 favorite]


cthuljew: Sorry, that phrasing was weird because I was posting from a phone. My point was that leftists (like me) are often too quick to brand a particular outlook "petit bourgeois", out of intellectual laziness. But this article reads like a marxist caricature of petit bourgeois politics ("stereotype-confirming").

Restoring "fairness" for whom? For the small capitalist who prefers not to be a worker, but stands no chance at growing and benefiting from "concentration". They're losing in an entirely "fair" (by capitalist lights) economic system, but are unwilling to oppose it full-stop because they enjoy certain privileges the average wage-worker does not.
posted by wobdev at 11:42 AM on July 1 [1 favorite]


Here's the thing about free, competitive markets: everyone loves to reap the benefits of them (e.g.: from their suppliers) but no one actually wants to compete in one. Imagine someone comes to you with a business opportunity in one of those platonic-ideal perfectly competitive market. What does that look like? Luckily, there are really low barriers to entry (good news!)... not that it matters since there are already a ton of competitors, all scraping by on minimal profit margins (uh-oh!). Why are profits so thin? Well, you're all selling basically the same, homogenous, equally-substitutable product. And because of perfect information and mobile factors of production, no producer can ever gain a persistent technological/operational advantage. As a bonus, there are also no information assymetries to take advantage of, no consumer lock-in, and no way to off-load externalities. Basically, it friggin' sucks.

So, of course, firms would prefer to operate in a less competitive marketplace -- and would do well to direct their efforts into creating such. The more legitimate ways of doing so would be to differentiate the product so you're not so much in direct competition or to take advantage of the real-world fact that factors of production aren't perfectly mobile and competitors don't have perfect information in order gain a technological edge. The less legitimate ways tend towards collusion and/or monopoly power.
posted by mhum at 11:45 AM on July 1 [2 favorites]


That assumes you follow the lead. Why should you get to make money on a commodity with absolutely no innovation on your part? Why does society owe you sales when capitalizing on the works of others? It really doesn't.

Innovative products can command premiums then command less of a premium as previous innovations become ubiquitous. Innovation can also lower the cost of and enhance production methods of commodity products which allow you to make more product for the same inputs and get a higher margin compared to other competitors. The incentive is to be at the forefront of innovation to command premiums and higher margins on your products in order to profit.
posted by Talez at 1:59 PM on July 1


Talez: "Innovative products can command premiums then command less of a premium as previous innovations become ubiquitous. Innovation can also lower the cost of and enhance production methods of commodity products which allow you to make more product for the same inputs and get a higher margin compared to other competitors."

Indeed. I thought that is what I was alluding to in the "legitimate ways" of escaping a perfectly competitive market. Perhaps I should have been more clear.

The incentive is to be at the forefront of innovation to command premiums and higher margins on your products in order to profit.

Ah. But is it really, though? Innovation is often a highly unpredictable process with uncertain returns. Gaining pricing power through collusion or monopoly seems much more certain. It would seem to me that without strong enforcement of traditional laws against anti-competitive behavior, the incentives would be tilted towards these illegitimate means.
posted by mhum at 3:42 PM on July 1


The Lords giveth and The Lords taketh away.

We're no longer an anarcho-syndicalist commune. We no longer take it in turns to act as a sort of executive officer for the week. All the decisions of that officer no longer have to be ratified at a special biweekly meeting. Supreme executive power derives from a farcical aquatic ceremony.

Feudalism is back. It took King George a lot longer than he thought, America, but he finally won.

But Larry Lessig has an idea - so we've got that going for us.
posted by Twang at 4:36 PM on July 1 [1 favorite]


But Larry Lessig has an idea - so we've got that going for us.

We're so screwed.

But seriously, considering Lessig's personal politics, his record of political successes (or lack thereof) and his janky technocratic solutions to things, it's a wonder that so many people are enthusiastic about following him into battle.
posted by Noisy Pink Bubbles at 7:37 PM on July 1 [2 favorites]


You're right, I like Larry but that was tongue-in-cheek. HOWEVER, without campaign-fund reforms, we are indeed screwed. So the fingers of my fingers are cros.sed Maybe Creative Commons waren't the only trick up his sleeve.
posted by Twang at 9:55 AM on July 2


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