
The U.S. Forgot What Antitrust Is For - pseudolus
https://www.theatlantic.com/ideas/archive/2019/09/how-antitrust-became-pro-pollution-tool/597712/
======
pge
For a detailed and insightful treatment of the evolution of antitrust law in
the US, I recommend “Cornered” by Barry Lynn.

The key point is that the interpretation of the law changed in the 80s to a
very narrow test of monopoly - whether a company’s dominant position in an
industry hurt consumers (ie created higher prices). This ignores, for example,
monopolistic behavior that makes it impossible for startups to compete.

The current administration is shaking things up by not limiting itself to this
historical definition (though what definition it is using instead is unclear).
For the last 40 years, Google would never have been challenged as a monopoly
because its products were free to consumers, hence there could be no harm to
them, hence no monopoly. Same for Facebook.

~~~
arshbot
There's a really good Planet Money podcast on this topic.

Did you know that pre-1980s, antitrust law was used _very_ liberally? There
were many documented cases of the book being thrown at tiny companies looking
to merge - the book that changed everyone's mind ( The Antitrust Paradox )
lists examples such as a merger between local groceries being denied as one of
many great examples of antitrust law getting in the way of healthy competition
instead of promoting it.

It seems that for most of the 10th century, antitrust law usage was on one
side of the bar being used far too much, and as a reaction it's far too much
on the other side - seldom used to the point where most industries are
dominated by one or two giants.

It's just bad luck this transition seemed to have happened during a boom
period of new industries and extreme growth.

~~~
xurias
> examples such as a merger between local groceries being denied as one of
> many great examples of antitrust law getting in the way of healthy
> competition instead of promoting it.

Maybe I need to read the book but I don't see it. Consolidation of
supermarkets has clearly reduced competition in the US. A small handful of
companies have cornered the market because the US government stopped using
antitrust laws liberally.

I'm not sure what popularity has to do at all with economic issues.

~~~
losvedir
Groceries are like the pinnacle example of capitalism and competition working
well. Everyone loves grocery stores, and we have a wonderful product selection
for very cheap prices!

I don't know if we have just "a small handful of companies" or not, but it
certainly doesn't work as a compelling example for me of an anti-trust
problem.

~~~
xurias
Everybody loves Amazon, doesn't mean they aren't horribly monopolistic and
don't have widespread economic/social impact on certain classes of people.

~~~
LanceH
What exactly does Amazon have a monopoly on?

They are big and the easiest and most obvious to use and their prices are
frequently good, but none of those are exclusively Amazon.

------
mcv
It's not so much that the US forgot what antitrust is for, it's that the
current powers that be disagree with it, and have a tendency to pervert
anything they disagree with, rather than being honest about their opposition
to it.

Same thing with health care and other measures that are meant to benefit the
general public. Opposing things that benefit the general public doesn't win
them votes, so they need to put a clever spin on their opposition to it. But
ultimately, they want things that benefit rich people, particularly party
donors.

~~~
rayiner
Who are the "current powers?" The current view of antitrust law has been
operative since the 1980s, and has encompassed administrations on both sides
of the fence. It's rooted in a large body of academic scholarship that has
withstood the test of time.

Your comparison to health care is telling. You make it seem like it's "rich"
"party donors" who are opposed to single-payer healthcare. In reality, just
21% of the public supports abolishing private insurance (which single-payer
healthcare necessarily would require): [https://www.mrctv.org/blog/cnn-poll-
only-21-favor-getting-ri...](https://www.mrctv.org/blog/cnn-poll-
only-21-favor-getting-rid-private-insurance-majority-oppose-giving-
healthcare).

There is a rhetorical tendency to blame American public policy on conspiracies
rather than honestly attempting to figure out why people vote the way they do.
In the context of healthcare, for example, isn't it possible that people (1)
reasonably believe that single payer won't be a magic bullet that lowers our
healthcare costs to European levels; and (2) don't want to pay the additional
taxes required to pay for universal coverage, when most people who aren't on
Medicare receive healthcare from their employers?

There is, in fact, good evidence that those factors, rather than "rich people"
and "party donors" are responsible. You'll notice that no Democrat that
supports Medicare for All has offered a serious health care proposal, _i.e._
one that raises taxes sufficiently to pay for it. That gives you a remarkable
insight into voter dynamics! Even Sanders is afraid to propose the $30
trillion in new taxes that will be required to pay for Medicare for All. (His
menu would raise just $10-12 trillion, even if all options were adopted.) And
while he is quite happy to propose tax rates on the wealthy *higher than those
in France—51% versus 45%—he is unwilling to propose raising taxes even on
people making up to $250,000 to anywhere near French levels. What does that
tell you about what people want? Who is he afraid of? The rich? Or the
suburban married couple making $125,000?

Maybe Americans aren't irrational. Maybe they like having 50% higher
disposable income compared to Germany or France. Maybe they don't want to pay
a 20% VAT, the OECD average. Maybe they don't want their FICA contributions to
double or triple, bringing those in line with social insurance taxes in
Germany or France. Maybe they don't want 40%+ tax brackets to kick in well
under $100,000, like in Germany, France, Sweden, etc. With respect to
antitrust, maybe they like the rock-bottom prices enabled by the scale of
companies like Wal-Mart and Amazon. Maybe they don't support carbon taxes
because they like $3 gas, road trips, and SUVs? Maybe they are voting for the
"powers" that give them what they want?

It’s interesting to note that at the time the Microsoft antitrust decision
came down, polls showed that people were opposed to breaking up Microsoft
54-35. That was the case even though a majority of people thought it was a
monopoly! I don’t think people usually can articulate a specific opinion on
antitrust issues, save for high profile cases like that, but people don’t vote
for specific policies, they vote for an ideology. And for decades, they’ve
been voting for a deregulatory ideology that features less government
intervention in the economy.

~~~
TheOtherHobbes
_Of course_ only 21% of the public favours abolishing private insurance.
There's been a huge and incredibly well-funded PR campaign to persuade them of
that.

[https://theintercept.com/2018/11/20/medicare-for-all-
healthc...](https://theintercept.com/2018/11/20/medicare-for-all-healthcare-
industry/)

Americans don't need to be irrational - they just need to be misled about the
relative benefits of taxes vs the personal security and relief that could be
provided by paying higher taxes.

The reality is that the private medical insurance industry in the US is the
single biggest cause of personal bankruptcy, and is responsible for incredible
emotional and financial suffering. It takes a lot of spin - not to mention
outright dishonesty - to paint that as a good thing.

But when the industry makes as much money as it does, the costs of generating
that spin are relatively cheap compared to the profits it secures.

Meanwhile in those countries groaning under the yoke of oppressive taxation,
there is absolutely no popular support for moving to the "benefits" of a US
system.

Because there are no benefits. And that's a straightforward, simple,
unarguable fact. Not only are higher taxes absolutely worth the value they buy
- guaranteed health care, with no worries about bankruptcy or "competitive"
price gouging - but the total cost over a lifetime, inclusive of taxes, is
_vastly lower than the equivalent cost in the US system._

~~~
enraged_camel
The other reason only 21% of people are against abolishing private insurance
is that lots of people are insured through their employer, and thus the true
cost of their healthcare coverage is hidden from them. If they really knew how
much it was costing them (because benefits are part of “total compensation”),
they would sing a different tune.

~~~
EpicEng
Yet we're not going to see a big raise because we switch over to a single
payer system. It's not unreasonable for people to be skeptical of such a
massive change when their current situation works fine (for them.) A change
like this would be far more beneficial to the under/uninsured than those of us
with existing, comprehensive plans.

I'm not making an argument either way. Personally I'm for single payer, but
that's largely due to the issues my mother had when she became ill.

~~~
wahern
> Yet we're not going to see a big raise because we switch over to a single
> payer system.

Californian legislators released a study last year about the costs of moving
to single-payer healthcare in the state. In total it would be $400 billion,
requiring $200 billion in new tax revenues after accounting for the existing
$200 billion in federal, state, and local expenditures. Diverting existing
employer and individual premium payments would still leave anywhere from a $50
billion to $150 billion gap. California's existing budget is ~$200 billion, so
covering that gap would require significant new taxes.

Anybody telling you that you can get single-payer for free is lying to you.
That would only be possible if we could significantly reduce costs, but we
_don 't_ _know_ _how_ _to_ _reduce_ _costs_. Any suggestion you've heard is
almost certainly part of the ACA/Obamacare in some form or fashion, and the
strategies aren't working as well as originally believed. But this was
predicted. The ACA was always intended to be a process of experimenting with
cost reducing strategies, which is why there were supposed to be panels that
could rewrite the rules as new information came in. But nobody is interested
in the hard work of figuring out what those solutions are; all the electorate
on both sides is interested in voting for are feel-good solutions. And they'll
believe whatever they need to believe in order to support their political
tribe.

~~~
sitkack
> we don't know how to reduce costs

I am pretty sure administrators of health systems that are cheaper could tell
us. Like just directly to our face.

~~~
wahern
If you could magically wave a wand and instantly replace a multi-trillion
industry, _maybe_. But you can't. And so even the most radical of possible
reforms will necessarily be incremental.

The other part of it is that Americans want mutually exclusive things--low
prices and end-of-life services that will spare no expense. In the end any
equitable system will have to choose the former, just as every other national
system has. However, the people in those systems were never given the choice;
their healthcare systems just evolved in that direction decades before modern
revolutions in incomprehensibly expensive medical care. So Americans are being
forced (by partisan politics) to make a decision no democracy can be
reasonably expected to make.

The ACA was largely based on Hillary Clinton's 15+ years of footwork. The ACA
is based on extensive examinations of foreign healthcare systems. If Democrats
can't make the ACA work--because they can't overcome Republican opposition,
because they're fickle and have turned their backs on it--then what hope is
there of even more radical reforms?

I'm not saying single-payer isn't possible in the U.S. It's just not possible
_now_. We'd have to wind our way there. But that's too much of an ask from our
modern politics. The ACA could have been a stepping stone, instead leftist and
populist Democrats just want to chuck it and start over, ignoring the fact
that they'd be facing all the same impediments and problems of the ACA and a
whole lot more, yet without any better answers.

"Other people do it" isn't an answer. Can I expect you to become a Warren
Buffet or Bill Gates merely because they and you both exist? It's a non
sequitur. You can't simply ignore path dependencies.

~~~
sitkack
A young man is walking down a dusty country road, putting out his thumb for
each passing vehicle. None stop.

An hour goes by and a old red truck rolls past him, ineffectually coming to a
soft halt, front brakes obviously worn out years ago.

The old guy in the truck asks him where he is going. The kid points to a
location on the map. And the old guy says, "oh they blew the bridge up years
ago. You can't get there from here, at least not anymore."

------
henvic
Antitrust agencies are more often than not a bad joke.

They are usually lobbied for by the big players in the market in spite of the
consumers and smaller competitors.

They create a legal nightmare scenario that you have to navigate to make
anything happen in your business, that is hard for anyone small to comply
with, but more manageable to them - going all against any free market
principles.

------
cat199
Agree antitrust regulation is screwed up, and agree self regulation against
pollution is good for the environment.

but, the particular case here isn't entirely about industry cartels and
antitrust - it is also about a single state's political influence over
national policy, with antitrust being (mis)used as a proxy for the fight.

This same publication has no qualms complaining about undue influence of a
single state nationally when it comes to terrible texas history books (and so,
extrapolating, when it aligns with editorial policy):

[https://www.theatlantic.com/education/archive/2015/10/the-
hi...](https://www.theatlantic.com/education/archive/2015/10/the-history-
class-dilemma/411601/)

[https://www.theatlantic.com/news/archive/2016/09/mexican-
ame...](https://www.theatlantic.com/news/archive/2016/09/mexican-american-
studies-texas/498947/)

and, unsurprisingly, it conveniently ignores this dimension in this article,
and similarly doesn't speak to the also current topic of antitrust
investigations into the undue influence of (editorially-aligned) tech giants.

~~~
horsawlarway
I don't understand your point.

If the issue is state influence, anti-trust is the wrong tool. It's the wrong
tool AND the wrong target if the investigation into anti-trust is aimed at
auto-makers.

If the issue is misuse of anti-trust laws to achieve clear political pursuits
(and I'd argue it is) then both of your links are irrelevant. At no point did
either of those articles imply that we should use anti-trust laws against book
publishers in response to the undue influence Texas has on the market.

I'd follow that by saying your comment is incredibly disingenuous on this
point.

\--

Now - I actually agree with you in regards to article quality. I'd have loved
to see some attempt at putting together the costs associated with moving to
cleaner vehicles to the average consumer. I'm not actually sure there is any
long term impact on cost, although sticker price may be higher and maintenance
cost is almost certainly going to be lower - That said, data is key and this
article provides none.

I'd also have loved to see attempts to quantify cost with regards to saved
medical expenses over time as air quality improves. Saved costs due to
electrical spending on cooling increasing less rapidly if we're better able to
meet emissions targets -- Basically, I want to know what the externalities of
my policy choices are. I thought this article actually did a fair point
categorizing current anti-trust law as broken in regards to handling
externalities.

~~~
cat199
> I don't understand your point.

That the article's premise "the US forgot what antitrust is for" is skewed,
because it ignores 'healthy' investigations into problems in the internet
space, and uses an editorially inconsistent presentation of a mechanism of
state vs federal influence to support its claims.

you are correct this is at an editorial level and not problematic in the
article as (selectively) presented.

I'm thinking you're coming at this 'economically', and I'm coming at this
'politically'.

> At no point did either of those articles imply that we should use anti-trust
> laws against book publishers in response to the undue influence Texas has on
> the market.

No, but it certainly complains about the _mechanism_ of one state's purchasing
power / legislation having influence over national policy, while making this
_mechanism_ a 'noble cause' in the case of california cars by comparing it to
civil rights activism.

As a mechanism, either states and businesses should have national influence,
or they shouldn't - if we are speaking of government 'function', this
mechanism is not selectively good depending on ones own political agenda. It
is either a good tool for balancing local/federal powers, or it isn't.

If Texas is misbehaving by issuing crappy schoolbooks, then California is
misbehaving by organizing automakers in such a way that they build cars
nationally according to its own requirements, and vice versa. One or the
other, depending on our view of the desirability of the overall 'mechanism'.

If we pick one case and not the other we are being partisan.

If we are highlighting one case to make this claim and not others (internet),
we are being partisan.

Which is exactly the complaint being levied against regulators here.

So, at base, this is really saying "running cartels and using antitrust to
break them is fine for me but not for you", which is the real 'argument', and
not nearly as compelling a supporting argument to make when ones article title
is "The U.S. Forgot What Antitrust Is For", since we might just be doing it
ourselves if we make that case.

Omitting ongoing tech investigations very conveniently avoids making this even
more overt, and so, in my view, is suspect.

Again, this was (carefully, via sidestepping?) not done within the article,
but on publication level; and, Getting into the actual economic issues /
externalities / etc. for this issue itself, I did not attempt do.

------
mschuster91
> Thankfully, the laws themselves don’t need to be amended. We simply need
> judges who will apply antitrust law as it was intended to be applied.

The problem is that in the US judges on all levels get appointed by
politicians/presidents or, worse, _elected_ instead of being on a career track
like in Germany.

To fix antitrust (and a whole host of other issues) the US first needs to fix
its judicial and election systems.

------
simplecomplex
> Their supposed offense? Agreeing with one another, and with the state of
> California, to develop vehicles that are more fuel-efficient and have lower
> emissions than federal standards require.

Sounds like collusion and price fixing, which are anti-competitive behaviors
covered by antitrust legislation.

You can’t have your cake and eat it too!

In a free market there would be nothing wrong with companies forming an
agreement to compete, but antitrust law sees that as a cartel. Even if the
cartel is selling electric vehicles.

------
Pigo
I didn't see Google or Facebook mentioned in this article. There seems to be a
lot of talk about looking into their respective strangleholds.

------
andrekandre
surprised they didn’t mention bork at all...

[1]
[https://www.washingtonpost.com/news/wonk/wp/2012/12/20/antit...](https://www.washingtonpost.com/news/wonk/wp/2012/12/20/antitrust-
was-defined-by-robert-bork-i-cannot-overstate-his-influence/)

------
quattrofan
"lavish rewards programme" yeah I don't think so

------
investologia
The U.S spend so much money and effort on cyber security experts

I wonder if everything goes on talks Or there are some serious actions behind
the scene

------
jkingsbery
Some conservatives (if you didn't know, we're not all the same, we're not all
pro-Trump) argue that when government is given a new power, it will use it in
ways that were unexpected. I don't know the particulars raised in this article
well, but it looks like a good example of this - it is unwise to pass laws
assuming your team will always be in power. You shouldn't cheer a president
who threatens to "use his pen and phone" to get what he wants regardless of
process, because someday someone else will be holding that same pen. It is
entirely predictable that a law allowing you to target companies you don't
like will be used by someone else to target companies you do.

I hold out hope that the Trump administration serves to the left as a
demonstration of the merits of limited government, but this author's we-just-
need-our-judges approach makes me skeptical this lesson will be learned.

~~~
mcv
> _" Some conservatives (if you didn't know, we're not all the same, we're not
> all pro-Trump) argue that when government is given a new power, it will use
> it in ways that were unexpected."_

And they demonstrate it as soon as they are in power. If a government is
determined to abuse its power in ways that were never intended, laws aren't
going to stop that. You need elections to stop that. The problem is that
people keep voting for politicians who abuse that power and use it in ways
that it was never meant for.

> _" I hold out hope that the Trump administration serves to the left as a
> demonstration of the merits of limited government"_

It mostly serves as a demonstration of the dangers of governmental overreach,
and the dangers of voting for the party that put this government in power.

It's a bit weird to suggest that the party behind it is innocent of their own
overreach or abuse of power and blame it all on the laws, when it's the
government that makes the laws, executes them, and in this case twists them
into the opposite of what they're meant for.

~~~
vonmoltke
> The problem is that people keep voting for politicians who abuse that power
> and use it in ways that it was never meant for.

How can we not when all of our options are going to do that, just in different
ways?

~~~
mcv
What the US really needs is more than two options. The problem is that the
first-past-the-post district system ensures you can't really have more than
two viable parties. A different electoral system would give voters more
options.

Sadly, changing the electoral system has to be done by the parties that
benefit from the current system, or the voters have to miraculously all decide
to vote for the same third-party option.

~~~
vonmoltke
Absolutely. It's made worse by the two anointed parties being enshrined in
state laws that provide special privileges and benefits to them and their
candidates.

------
alexis_fr
The problems americans have with antitrust (which is one of the greatest
advancements they’ve added to the economic theory), is that any anti-trust
ruling will both destroy the influence of this company inside _and outside_
the USA.

For example, the reason Microsoft wasn’t dismantled despite losing their
antitrust trial, is in the wake of 9/11, USA wanted to avoid weakening their
economy by dismantling their biggest pitential.

Today, USA is certainly afraid of dividing Google because it is a major
influence for domination of the world. Same for Facebook. And that is
perfectly logical.

USA needs to find a way to forbid the bad side-effects of trusts, while
keeping their domination outside the US...

~~~
pytester
Microsoft's donation of $4.3 million to both parties as well as think tanks
like Cato and Americans for Tax Reform might also have had something to do
with the weak ass settlement.

~~~
darkerside
$4.3M? That doesn't buy power. That buys a consultation.

~~~
magashna
You can look up how much ISPs give to politicians to see how cheap it really
is. 4.3M is a royal sum.

