The New York legislature is about to take up SB933, an historically significant antitrust bill that is poised to reverse decades of monopolism by repudiating the destructive, corporate-power enhancing, deceptively named "consumer welfare" principle.
Prior to "consumer welfare," the USG prosecuted monopolies because they created unaccountable concentrations of power, allowing a few ultra-wealthy executives to decide how we worked and lived, corrupting politicians and breaking laws with impunity.
Bork insisted that "your business is too powerful" was too squishy and subjective a basis for law-enforcement, and insisted that we should make trustbusters empirically prove a) that harm had occurred; and b) that it was due to monopoly power.
This effectively ended antitrust enforcement. The standard for proving a merger would result in higher prices, (or post-merger price-hikes were the result of monopoly) was to build and interpret an esoteric mathematical model than only Bork and his cronies understood.
Unsurprisingly, the models always affirmed that a merger would be efficient, not harmful - and that post-merger harms were not the fault of the merger. Big business loved Bork, and spent lavishly to promote his theories.
What's more, the focus on "consumer harm" denied our power and duty as *citizens*. A "consumer" is an ambulatory wallet who "votes" by buying things (the fatter the wallet, the more votes you get!). A citizen is someone who has a stake in their society.
Delcaring antitrust's stakeholders to be "consumers" and "businesses" excluded a key constituency: *workers*, who are particularly vulnerable because labor markets are far more sensitive to "buyer power" (fewer employers) than consumers are to "seller power" (fewer retailers).
"Monopsony" (market control arising from few buyers) occurs far sooner than "monopoly" (control from few sellers).
We see this around us right now, with Amazon's slave-labor conditions for delivery drivers pushing down wages and worsening work conditions across the sector.
Every "consumer" is also a "worker" (with the notable exception of "investors" - the tiny minority that makes it living by owning things, rather than doing things), which means that any consideration of "consumer welfare" that ignores workers' rights is bad for consumers.
Which is why "consumer welfare" created a world of spiralling labor precarity, environmental devastation, political corruption, and pervasive cynicism about politics and the ability of democracies to craft and enforce good policy.
Enter New York's SB933, introduced in the wake of the Amazon HQ2 fiasco, where the company tried to shake down cities and states for massive subsidies and exemptions from labor and other regulation.
Amazon pulled out of NYC when activists and politicians dared to question the wisdom of giving a wildly profitable monopolist a massive subsidy that would lead to the destruction of local businesses and skyrocketing housing prices.
Today in his BIG newsletter, Matt Stoller interviews NY's Senator Mike Gianaris, who introduced SB933, which explicitly broadens the basis for antitrust enforcement to include curbing unaccountable corporate power and protecting workers.
As Stoller and Gianaris point out, there's nothing radical about considering a broader range of harms when enforcing against monopolies: "harmful dominance" was the longstanding American legal tradition, spread to Europe after WWII.
Borkism was a radical break with tradition, and SB933 restores antitrust to the muscular suite of protections we enjoyed before Reagan.
"Harmful dominance" means that monopolists will no longer get to set the terms for their own regulation. For example, it sidelines the often farcical debate over "market definition" ("which market is the monopolist accused of dominating?") which is incredibly easy to game.
For example, when Facebook bought Instagram, it claimed that the acquisition wasn't about buying up a nascent social media competitor to whom FB was losing millions of users - rather, it claimed IG was a *camera* app.
And since every phone comes with a camera app, FB's merger with Insta would give it an unmeasurably tiny share of the camera app market.
This sophistry isn't unusual in antitrust debates. To see it in action, check out this debate between Tim Wu and Tyler Cowan:
And, of course, by that measure, FB controls very little of "social" (Amazon makes the same argument when it defines its market as "every retail transaction"). "Consumer welfare" invites this kind of absurdity - while "harmful dominance" sweeps it aside.
If you are a New Yorker, you can and should contact your state rep to support SB933. State lawmakers are *very* sensitive to constituent emails! You can look up your lawmaker here:
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