- Antitrust is – and always has been – about fairness: SCOTUS is entitled to its own (judicial) opinions, but not its own facts.
- Hey look at this: Delights to delectate.
- This day in history: 2007, 2012, 2017
- Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading
Antitrust is – and always has been – about fairness (permalink)
It's easy to take the Supreme Court's flurry of judicial atrocities as a contemporary phenomenon, but all the way back in 1993, SCOTUS engaged in a historical fantasy that has taken a terrible toll on the American people and American political legitimacy. Long before Citizens United, there was Brooke Group Ltd. v. Brown & Williamson Tobacco Corp:
It was an antitrust case, and in 1993, decades of antitrust precedent that sought to prevent the accumulation of power into a few companies' hands was being upended by a radical, far-right doctrine called "consumer welfare" – a doctrine that spread to "liberal" justices as well, as 40% of the federal bench took part in the Manne Seminars, lavishly funded "education" junkets:
In Brooke Group the Supremes moved an outlier – 1962's Brown Shoe Inc – into the center of antitrust law, with Kennedy quoting Brown Shoe for the majority: "It is axiomatic that the antitrust laws were passed for 'the protection of competition, not competitors.'"
What Kennedy meant was that antitrust laws don't exist to protect small businesses per se – rather, they exist to promote "efficiency," which is best understood as "prices going down." So long as prices are going down, antitrust is working as intended – irrespective of the ruined lives and places that are sacrificed to low prices and the corruption begat by concentrated power.
The question of what antitrust should do is certainly up for fair debate. I understand the "efficiency" argument, even though I thoroughly disagree with it. What isn't (or shouldn't be) up for debate is what purpose antitrust was created to serve. That is a historical fact, easily verified by looking at contemporaneous primary source documents from the recent past.
But for 40 years, we've accepted an alternate history of antitrust law, an unhinged conspiratorial account that pretended that the lawmakers who drafted and fought for antitrust law and who told us over and over why they did so were speaking in code – that we can't rely on their plain language and must instead fall back on gnostic interpretations where every word can mean its opposite.
Finally, that age of mystic nonsense is coming to a close. The new antitrust enforcers not only reject the ahistorical gibberish that pretends to explain antitrust's origins, they embrace the intent of antitrust's framers: to prevent the accumulation of commercial – and thus political – power into the hands of "autocrats of trade," be they Rockefellers and Carnegies, or Kochs and Seids.
In the US, three powerful Biden appointees are leading the charge: Tim Wu in the White House, Jonathan Kanter in the DoJ Antitrust Division, and FTC chair Lina Khan. But while these three may be the face of US trustbusting, they are by no means alone – rather, they are supported by stalwart lieutenants and an army of supporters.
One of these lieutenants is FTC Commissioner Alvaro Bedoya. Last month, Bedoya gave a barn-burning speech to the Midwest Forum on Fair Markets, explaining the once and future history of antitrust; the transcript of his speech was just published in The American Prospect:
Bedoya starts with the unequivocal history of antitrust. In 1888, when Congress was debating the Sherman Act, its first antitrust law, it "did not talk about efficiency." Instead witnesses complained about the meatpacking cartel, which was cheating ranchers out of a fair price for their cattle.
This theme – cartels and monopolies abusing small producers – is the recurring motif of all antitrust law debates thereafter. In 1936, Congress debated protection for small-town grocers "being driven out of business by powerful chain stores who got secret payoffs from their suppliers."
In those debates, Congress made clear its purpose: "What we are trying to take away from them is secret discounts, secret rebates, and secret advertising allowances. We are trying to take away from them those practices that are unfair." Antitrust is, and always has been, about fairness, not efficiency.
When Sen John Sherman took his landmark antitrust bill to the Senate floor in 1890, he thundered: "If we will not endure a King as a political power we should not endure a King over…the necessaries of life. If we would not submit to an emperor we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity."
Congress passed five more antitrust bills over the next 60 years, each of them designed to protect small firms from large ones. There is no reasonable world in which the judges enforcing these laws could say that it was "axiomatic" that they didn't exist to protect the small from the large:
Today, small firms – and the communities they serve – face existential threats from large, consolidated ones. Bedoya describes the annihilation of independent pharmacies in West Virginia, where, 20 years ago, the sector was composed of 39 companies – pharmacies, benefit managers and insurers. Today, those 39 companies have merged into three monoliths:
Perhaps that's efficient? Not hardly. When a WV family goes to their local pharmacy to fill a prescription for their child who has cancer, they are turned away, told instead that they must fill this order with their Pharmacy Benefit Manager's proprietary mail-order pharmacy, and their child must wait two weeks for their medicine:
A tsunami of mergers – waved through by Bedoya's predecessors at the FTC – produced nationwide pharmacy and insurance consolidation, to the detriment of patients. It was also an extinction-level event for rural pharmacies: "In Minnesota, from 2003 to 2018, 30 rural zip codes lost their only pharmacy." It's a nationwide epidemic:
Agribusiness is extraordinarily concentrated. At a listening session in Des Moines, Bedoya heard from cattlemen and corn growers, who were all in crisis. No wonder: 40% of your grocery store dollar once went to the farmer who grew your food. Today, it's 16%:
Once, dozens of firms provided agricultural inputs and services ("fertilizer, seeds, grain buying, meatpacking"). Today, all of these functions are undertaken by just four companies, but they don't compete with each other – rather, they have divided up the nation so that farmers have only one supplier for key inputs:
This isn't just unfair – it's also inefficient. When one company owns all the meatpacking facilities and shuts down – as some did during the covid lockdown – there's no alternative. Bedoya: "One of the cattlemen described through tears how he had to gas a warehouse full of cattle when the one processing plant accessible to him was shut down because of COVID."
Monopoly isn't just unfair to humans, it's also unfair to livestock: "Another described animal abuse on the lot that he said was unheard of in competitive markets. A cow that he raised was bolted in the head, killed, dragged out of a trailer with a log chain, and dumped in the garbage because she had slipped in the trailer on the drive to the processing plant."
The unfairness goes deeper than we know or can know. Bedoya says that the people who came to his meeting were terrified to speak, frightened of retaliation by the monopolists. I encountered this myself: when Rebecca Giblin and I were working on Chokepoint Capitalism, our book about monopolies and creative labor markets, everyone we spoke to about the Ticketmaster/Livenation monopoly requested anonymity for fear of reprisals.
The unfairness goes all the way up the supply chain, from producers to retailers. Rural communities and low-income neighborhoods rely on independent grocers, and independent grocers are also facing looming extinction. That's because the large grocers and large manufacturers have secret arrangements that make it possible for grocery monopolists to sell at prices that independents can't match.
Take RF Buche, who owns 21 independent grocers in South Dakota Indian Country, a business that his family has been in for 117 years; Buche's stores are "the only place where locals can easily get fresh milk and produce."
Many times, manufacturers literally won't sell Buche the same packages that they market to the big-box stores. When those goods are on offer, they're sold at much higher prices than the big box stores enjoy, even when Buche offers to buy in the same quantity.
During the lockdown, Buche was not able to buy items like baby formula, as the supply was preferentially diverted to big box stores (this was long before the nationwide shortage). To get these items for his customers, he had to drive 1,000 miles/week to move items from his low-volume stores to his busier ones. His competitors, the big box stores, all had overflowing shelves.
Bedoya asks how it is that judges expect him to protect "efficiency" when the laws themselves – to say nothing of human decency – demand that he protects "fairness"? "Fairness," Bedoya says, isn't squishy and "impressionistic." Rather, "Congress and the courts have told us, directly and repeatedly, how to implement protections against unfairness."
Bedoya pledges his support for Chair Khan's promise to enforce the antitrust laws as they are written, not as the "autocrats of trade" who control our economy and thus our political system wish they were written.
This is one of the most important changes to American politics in a generation. The FTC is blocking mergers, the White House is undertaking 72 specific antitrust actions, the DoJ is chasing anticompetitive conduct. That may sound commonsensical – and it is – but it's the first time it's been a part of American politics in ten presidential administrations:
Hey look at this (permalink)
- “Put Your Heart Into It” an animated short film by Cory Kerr https://www.corykerr.com/put-your-heart-into-it
Flip-Segment Digital Clock Is A Miniature Mechanical Marvel https://hackaday.com/2022/10/09/flip-segment-digital-clock-is-a-miniature-mechanical-marvel/
Someone is pretending to be me https://connortumbleson.com/2022/09/19/someone-is-pretending-to-be-me/ (h/t Schneier)
This day in history (permalink)
#15yrsago Wal-Mart’s total area larger than Manhattan’s https://web.archive.org/web/20071011015943/http://awesome.goodmagazine.com/transparency/007/trans007storespace.html
#10yrsago Australian PM lances a sexist boil in Parliament https://www.themarysue.com/australian-prime-minsiter-julia-gillards-epic-verbal-takedown-of-misogynist-politician-video/
#10yrsago Billionaire timeshare CEO to employees: there’ll be fewer jobs around here if Obama is re-elected https://web.archive.org/web/20121010212503/http://thinkprogress.org/economy/2012/10/09/978211/david-siegel-fire-employees/
#10yrsago New York Five: beautifully told coming-of-age comic from Brian Wood and Ryan Kelly https://memex.craphound.com/2012/10/10/new-york-five-beautifully-told-coming-of-age-comic-from-brian-wood-and-ryan-kelly/
#5yrsago An obscure copyright law is letting the Internet Archive distribute books published 1923-1941 https://blog.archive.org/2017/10/10/books-from-1923-to-1941-now-liberated/
#5yrsago Reimplementing an Apple ][+ on an FPGA https://www.cs.columbia.edu/~sedwards/apple2fpga/
#5yrsago Equifax will give your salary history to anyone with your SSN and date of birth https://krebsonsecurity.com/2017/10/equifax-breach-fallout-your-salary-history/
#5yrsago After her spies told Thatcher they thought an MP was raping children, she knighted him https://www.independent.co.uk/news/uk/home-news/margaret-thatcher-cyril-smith-knighthood-child-sex-abuse-claims-aware-inquiry-claims-a7991671.html
#5yrsago Naomi Alderman’s “The Power”: in which fierce power of women is awoken https://memex.craphound.com/2017/10/10/naomi-aldermans-the-power-in-which-fierce-power-of-women-is-awoken/
Today's top sources:
- The Bezzle, a Martin Hench noir thriller novel about the prison-tech industry. Friday's progress: 508 words (47676 words total)
The Internet Con: How to Seize the Means of Computation, a nonfiction book about interoperability for Verso. Friday's progress: 531 words (44110 words total)
Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. (92849 words total) – ON PAUSE
A Little Brother short story about DIY insulin PLANNING
Vigilant, Little Brother short story about remote invigilation. FIRST DRAFT COMPLETE, WAITING FOR EXPERT REVIEW
Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION
Spill, a Little Brother short story about pipeline protests. FINAL DRAFT COMPLETE
A post-GND utopian novel, "The Lost Cause." FINISHED
A cyberpunk noir thriller novel, "Red Team Blues." FINISHED
Currently reading: Analogia by George Dyson.
Latest podcast: Sound Money https://craphound.com/news/2022/09/11/sound-money/
- Chokepoint Capitalism event, Books and Books (Miami), Oct 12
Reboot Conference, Lincoln Network (Miami), Oct 13
Library Journal Day of Dialog (Zoom), Oct 20
Chokepoint Capitalism Event, Argo Bookshop (Montreal), Oct 23
Surviving Apocalyptic Economics, with Douglas Rushkoff and Rebecca Giblin, Ottawa Writers Festival, Oct 24
World Ethical Data Forum, Oct 26-28
Arthur C Clarke Award (DC), Nov 16
- Regulating the Online Public Sphere (Columbia Global Freedom of Expression)
Canadians Connected 2022 with Amber Mac:
Amazon Billing Amazon for Amazon (Trashfuture)
- "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com
"Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The Washington Post called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html
"How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59 (print edition: https://bookshop.org/books/how-to-destroy-surveillance-capitalism/9781736205907) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)
"Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html
"Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.
- Red Team Blues: "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books, April 2023
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