Antitrust and How the American Dream Is Becoming a Sucker’s Game

If you recognize the phrase “net neutrality,” you’ve felt the influence of Tim Wu. The Columbia Law School professor has been tracking the rise of technology companies and their increasing power for decades, benchmarking them against the information empires of the past. He’s advised the Federal Trade Commission, and the New York Office of the Attorney General, and in 2016 joined the National Economic Council, under then-President Barack Obama, to work on economic competitiveness. That year, he also told the Senate that some behavior at Google was anticompetitive.

That view has caught traction. In his new book, The Curse of Bigness: Antitrust in the New Gilded Age, published earlier this month, he argues that global industry is dominated by a few corporate giants and is twisting the way we live our lives.

Barron’s: The reception to the book feels electric. Why?

Wu: This book has seemed to hit a nerve. I’m trying to talk about stuff people feel day to day: They feel they are outmatched by companies much larger than they are and over whom they don’t have any control. That powerlessness is what’s driving the political anger. Neither party seems to be strongly on the side of the entrepreneur, as opposed to big business. I don’t think it’s only party politics; it’s something about the deeper ideological matter about who runs this country. [The feeling that] even ten, 20 years ago, anyone can start a company in tech; how’s that looking? [In the past,] self-employment seemed like always an option that might lead to significant wealth. I wouldn’t say it’s completely gone, but people feel the odds are stacked against them. Everyone’s outgunned.

The book talks about Big Pharma. Is much of that entrepreneurship problem in health care?

The American dream has almost become a sucker’s game where you do what’s suggested, but it’s full of traps. Health care is a big example. You go for it, you leave the umbrella of employer health care and if you get sick, you’re stuck, that could be your whole life. If you don’t have good health care, prescription drugs are very dangerous because you can end up with these monstrous bills. There’s this real danger you’ll have a good go and when you’re old and want to retire, you’ll be left with nothing. So people flee to the security of jobs, but there the data’s clear: Workers get a diminishing share of the pie, after forty years of wage suppression.

How did we get here?

First of all, the arguments were powerful and well-put together, and [former Solicitor General Robert] Bork was really impressive; he tied it to a couple really powerful locomotives, broader trends. One was this backlash against the judiciary that was more centered on civil rights and culture-war-related issues. There was lot of controversy about things like Roe v. Wade. This huge revolution was changing America. People on the right felt the judiciary was out of control. It was a powerful locomotive. So people like Bork were like “well, also, they are messing with good old fashioned American business!” and people were like “yes! Add that on!” There’s this powerful angry reaction, you affix your car to it, and it pulls you all the way up the hill.

Big companies started getting more political. There was a big corporate backlash to antitrust, evidenced through an enormous amount of funding that started in the 70s and 80s and continued for 40 years. That’s the Republican side.

Democrats decided they wanted to be more on board with the pro-market approach; that’s the Clinton era. But they were a little suckered. They thought they could be pro-market without just being pro-business, but the difference did not end up being that great. They ended up not offering an effective opposition. Antitrust laws are not entirely wiped out, but certainly diminished very dramatically.

The Democratic party embraced the idea of a technocratic government: have the real experts and economists run this stuff. They were playing a technocratic game while business was playing hardball. When the other side is playing hardball, you will lose.

What can people do to change the anticompetitive landscape?

I’m trying to re-channel economic anger in more productive directions. None of this stuff has been an issue for candidates. They talk about how much they hate Trump. But, about pharma, there were all these scandals about raised prices. Nothing happened. Nobody did anything. There was just a lot of anger. We need a new generation of sworn Brandeisians, or antitrusters, who believe in this stuff, and people vote for them knowing that.

Obviously I don’t like racist candidates, but the culture-war issues can take us away from the economic issues. And economic issues matter a lot for how life is lived. My book is trying to put economics front and center and make elections more like the 1912 election: What do you think of monopoly and oligopoly? For the 2020 field, Republicans and Democrats: Where are you on these issues?

There does seem to be a bipartisan opposition to so-called corporate welfare—like democratic socialists and conservatives objecting to subsidies New York used to lure Amazon to Queens.

We’ve gone backwards. There was a massive contest to try to see who could do the most to subsidize the already wealthy. It’s the opposite of democracy. I’m happy they chose New York. It’s fine when anyone comes to New York to do business. But I don’t think we need to pay people to do business in New York. It’s the most attractive city to do business in in the world. Except for the damn subway.

How has this affected the distribution among cities?

[It becomes] so much like “winner city, loser city.” Everywhere becomes this narrative of hollowed-out parts of the country. It’s tragic. It’s too big a country for that—it leaves too much behind.

We’ve followed the heavy, hard economic logic about what makes life good, and I’m not sure it’s paying off. We’re at the end of a 40-year experiment and we profoundly lost the sight of the end. It’s actually for human flourishing. It doesn’t seem to be about that at all. It’s about maximizing the size of the pie, with no real attention of how the pie is divided, how it affects how life is really lived, your economic security, your sense of opportunity. Some people have all the options in the world. That’s a vibrant, wonderful way to live. I just don’t feel a lot of people feel that way; they feel they are outmatched by their employer and have to put up with whatever and hold on for dear life, lest they lose health care.

Take airlines, the most perfected, advanced version of capitalism out there. You pay exactly the amount they figured out you are willing to end up paying. It creates this sense everyone’s against each other, trying to get in the priority lane. That’s a metaphor for our society. We could board the plane from both sides but, instead, you create this tiny little gateway and force everyone to get excited about it and try to get through it, when you created this fake thing in the first place. The whole thing’s a farce. I find it profoundly depressing.

How do we know the experiment is ending? Are you being the buzzer?

The buzzer is also national politics, how people seem to have lost control. That’s why it’s like the Gilded Age: communist movements, anarchists, all kind of extremism, It has to do not just with fascism but economic desperation. People feel betrayed, and they turn to different explanations.

What’s the takeaway for our readers?

Focus on whether America realistically supports entrepreneurship, whether we’re losing that sense—the whole country, not only the biggest cities—that opportunity is spread wide, to have a fulfilling life and do business, and not feel like you’re in a suckers game and overwhelmed and trapped and it’s just for the big companies that always win.

Americans are amazingly wise about the importance of competitiveness in professional sports. They understand the benefits of competition and keeping it balanced, but they somehow have forgotten that in their economics. [So] I’ll throw in a sport analogy: Is it just a couple teams always win or is it a fair fight out there?

Thanks, Tim.

Write to Mary Childs at [email protected]

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