Little-d Democratic Control of the Economy, Anti-Trust and Power
There is another round of anti-trust discourse going around, largely, I think, in response to this article by Matt Bruenig, who I generally agree with and genuinely think is one of the smartest commentators around. I am not going to into every argument made other than to say two things:
His arguments against the idea that we live in a monopoly economy are, well, weak. Warby Parker and its 7.2% of the market is not an impressive entry into a controlled market, for example, and he flatly does not deal with the really large monopolists
He is right that small businesses are often, well, assholes. There is nothing that prevents small businesses from being run by tyrants (trust me, I have worked for them), and larger businesses often, though not always, treat workers better. But Bruenig doesn’t address the larger point: small can be democratically reigned in. Large often cannot.
Bruenig argues that the conflict on the left, at least economically, is between anti-trusters and people who focus more on the other two pillars of economics — cost savings and efficiency. I think of those two as Galbrathian, since Galbraith is the economist most known for prioritizing them. The problem is, efficiency favors capital over labor (as efficiency inevitably means spending less on labor) and a focus on consumer prices allows for firms to grow large enough to then dominate markets and reduce those consumer gains.
Galbraith’s solution to those problems was countervailing forces, largely government and labor, but those forces inevitably fail in the face of concentrated economic power. Regulation has the same problem — it cannot stand up to the power of concentrated economic might. Concentrated economic power warps the democratic process, just like all concentrated power does, and without controlling those forces, democracy and the common good is always going to be in danger.
And a focus on price levels without anti-trust runs into the same problem. The abundance argument is that if we let government get out of the way, then we will get all our infrastructure dreams come true and everyone will be able to afford housing and we will get trains and unicorn taxis. except look at housing in Texas, a state that has never me a regulation it didn’t beat over the head with a shovel and bury under a crossroads at midnight. Prices are rising even in this deregulated paradise, largely because builders and concentrating — as was predictable in an environment with no concern for the power of economic players.
I think this debate has several problems, most of them inherent to the issues that generally plague American society. First, there is a tendency to want to think that if you solve the One Big Problem then all other problems go away. This is nonsense, and some of the anti-trust people are terrible about this. Matt Stoller has a massive, massive blindspot with regard to how oppression based on identity is not always amenable to an economic solution, for example. But his counterparts have a tendency to refuse to look at the failures of Galbraith’s vision and to still think if we were just good little economic units, focusing on efficiency and using countervailing forces to make sure prices are low then everything will be fine. It won’t be. A nation with a handful of economic Goliaths will inevitably be less fair, less free, and less democratic than one without.
I think the largest problem, however, is that no one is willing any longer to state the simple, if unpleasant truth: freedom can only exist if the economy is subject to democratic control. That, apparently, sounds too much like communism. It is not — it simply means that, like any other aspect of civilized society, there must be democratic control, a balancing of the needs of society and the rights of individuals, so that society can remain democratic. It means, today, rigorous anti-trust, support for labor unions (like card check and sectoral bargaining), favoring worker collectives, reigning in things like stock buy backs, controlling campaign finance, etc, etc. etc. Nothing radical or unheard of, but done with the goal of supporting today’s democracy.
And the today in that sentence is important — like any democratic system, the challenges will change and the responses there for must change as well. It is not as simple as claiming that is you back efficiency then the pie will be big enough for everyone, or if you keep prices controlled everything will be fine, or if you break up all large businesses everyone will always be free. None of that is true in the long run. Right now, we need aggressive limits on the size of businesses and a renewed dedication to worker power. Tomorrow we may need a focus on price stabilization, etc. Life changes, and we need to change with it.
There is not magic bullet, no theory that will solve everything forever. But if the question is instead what economic action/activity will best preserve democracy, then we have a real chance of making correct choices. Otherwise, we just waste our time arguing about generalities when specifics are what matter in the here and now.