An abundance agenda for antitrust policy

Promoting competition is good; arbitrary preferences for smallness not so much

A politics oriented around “abundance” has obvious tensions with the degrowth strand of the environmental movement, and it touches on longstanding intra-party disputes over rent-seeking behavior from labor unions.

But a lot of the most vocal pushback has come from people affiliated with organizations dedicated to antitrust policy, people who have often described their cause as “anti-monopoly” politics. This is, on its face, odd. The book Abundance by Ezra Klein and Derek Thompson doesn’t talk about antitrust policy.

But there’s a lot of stuff the authors don’t talk about. Jorge Elorza, the former mayor of Providence and current head of Democrats for Education Reform, piggybacked on enthusiasm for the book to talk about an abundance agenda for education — framing high-quality charter schools as natural complements to the authors’ ideas. Last fall, Lawson Mansell wrote for the Niskanen Center about healthcare abundance, an agenda focused on rolling back rent-seeking by hospitals and other provider groups.

Antitrust policy, to someone who teleported from 2015 to 2025 without exposure to any of the intermediary discourse, seems like a similarly complementary idea.

In fact, one way to frame many of the critiques offered by advocates of an “abundance” politics is precisely in anti-monopoly terms. Certificate of Need laws for hospitals, for example, are a way for incumbent hospitals to get state governments to prevent new entrants into their markets. Exclusionary zoning is a kind of “homeowners’ cartel” enforced by the local government that, again, prevents competition in housing supply.

Classically, antitrust policy is about using affirmative government regulation to prevent monopolistic behavior via mergers or cartelization. Many abundance-related policies are about the targeted use of deregulation to dismantle legally entrenched cartels. But antitrust and abundance appeal to similar economic concepts. Proponents of each might be talking about different sectors of the economy or perhaps disagreeing about the relative weight to give to different topics, but these are clearly complementary subjects — classic antitrust policy aimed at preventing monopolization is a natural part of an abundance agenda.

What has made this whole dialogue so vexing and confusing is that while the people who’ve led a revolution in Democratic Party thinking about antitrust enforcement do some traditional anti-monopoly work, they also do a lot of other stuff.

And it’s mostly the “other stuff” that’s controversial. Take the FTC’s case against Meta, an attempt to force them to divest their ownership of Instagram. What is the monopoly here? A cartel prevents competition and drives up prices. Where are the high prices? There are lots of free ad-supported apps you can use on your phone. There are lots of technical legal issues in this case, but on its face, this doesn’t have the character of a classic antitrust case. When AT&T tried to buy T-Mobile, the Obama administration blocked them because they said reducing options in the cell service market would raise prices. Later, the Trump administration allowed Sprint and T-Mobile to merge, which reduced competition and raised prices.

The Meta litigation is nothing like that. It’s driven by a movement whose core interest is not competition policy but a vague sense of “corporate power.”

Competition economics, very briefly

A basic chart of the economics of monopoly shows that a monopoly producer (or a cartel) raises prices from Pc to Pm. This reduces the overall quantity of goods sold from (Qc to Qm) and, as a result, reduces the total volume of sales. But because the profit per sale is higher, producer surplus increases at the expense of shrinking consumer surplus and increasing deadweight loss.

That was the issue in the cell phone merger cases. The Obama administration did the right thing for consumers, while Trump, who is quite corrupt, allowed this market to shift toward monopoly and raise prices.

You can accomplish this via mergers, or you can accomplish it via illegal cartels. But you can also accomplish it with bad-faith occupational licensing rules.

For most of my career, I’ve been annoyed that trying to boost competition and consumer surplus via antitrust enforcement actions is considered populist and left-wing but trying to boost competition and consumer surplus via deregulatory actions is centrist and neoliberal. Economically, it’s the same. But lots of people process these issues primarily through a lens of “regulators yay!” versus “regulators boo!” rather than trying to understand the actual issue.

Adam Smith, of course, knew better and famously observed that “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” He was skeptical of regulatory restraints to trade but also aware that absent countervailing regulation, private restraints to trade would occur. The right thing to do isn’t even to strike a balance between these considerations, it’s really just to try to make regulatory policy decisions on the merits based on a reasonable assessment of costs and benefits.

Robert Bork and the law and economics movement tried to operationalize this in the antitrust space by saying that we should evaluate antitrust actions based on how they impact consumer welfare in terms of prices and quantities. A number of narrow criticisms of that have emerged over the years. A cartel could, for example, serve to push down wages, and in fact, evidence emerged of a Silicon Valley hiring cartel and it was the subject of successful litigation 10-15 years ago. A company with free ad-supported products could have negative non-price impacts on consumer welfare. For example, if there were a short-form video monopolist, the app might be free but have an outrageous number of ads. Competition between multiple companies restrains that.

These are good points and a valuable reminder that you can’t just run with old analysis from 50 years ago without updating for new kinds of products as they emerge.

But the leftist critique of Bork’s framework isn’t aiming at some narrow emendation. They actually want to kick aside the whole idea of promoting competition in favor of combatting “corporate power.”

The question of competition

A funny prehistory to today’s arguments about antitrust policy is that back in February of 2013, Abundance co-author Derek Thompson wrote a post hailing Jimmy Carter’s airline deregulation initiative for bringing down prices while making more flights available. Lina Khan, the year before, wrote a Washington Monthly article denouncing airline deregulation. Flash forward 13 years and the Monthly is doing negative reviews of Thompson’s book, and Khan is the leading figure in the “anti-monopoly” movement.

This is not the most important issue in the world, but airline deregulation was a straightforwardly pro-competition measure.

The old rules were that to run an interstate route, airlines needed to get permission from the Civil Aeronautics Board (CAB). To change fares, airlines needed to get permission from the CAB. The point of this wasn’t to keep prices and profits low, it was to prevent race-to-the-bottom competition. In the old regulated era, airlines never went bankrupt because profits were essentially guaranteed by the regulators. In the deregulatory era, there have been lots of airline startups but also lots of airline failures. But in the more competitive landscape, people fly much more than they used to because air travel has become cheaper and more abundant.

The losers in this process have been primarily people working in the airline industry.

Most airlines have relatively strong labor unions, so to the extent that the airlines are able to engage in rent-seeking behavior, the unions are able to force them to share the rents. Competition has diminished the rents and made things worse for labor. This is similar to some longstanding conflicts around trade. Protective tariffs reduce competition and give companies monopoly pricing power, and the workers at the company, especially if they are unionized, can force the company to share those rents.

This, in fact, is the traditional conflict around antitrust policy, not between opponents of monopoly and proponents of abundance, but between competition and labor interests. Thinking back to cell phones, a lot of people thought the Obama administration would approve the T-Mobile/AT&T merger because the Communications Workers of America supported it. From the CWA perspective, reduced competition and higher prices are good — more rents to share!

Relatedly, the Open Markets Institute, one of the hubs of the new antitrust movement, recently published a report calling for state governments to deploy a doctrine called Parker Immunity in order to “legally authorize workers and employers to jointly set industry standards, including wages and working conditions, without violating the antitrust laws.” The call, in other words, is for weaker antitrust rules. In the case of this proposal, it’s for weaker antitrust rules specifically conditional on rent-sharing with workers. I think that people who cover these factional controversies need to pay attention to this. Open Markets and the American Economic Liberties Project are not consistent advocates of pro-competition policymaking or even of aggressive antitrust enforcement. Those two ideas are highly complementary to an abundance agenda in a way that would make the antagonism inexplicable.

Small business promotion

I’ve been following these issues for a long time, but I’d been a little unsure what to say about it, because I dislike the genre of article where the writer psychoanalyzes a political movement and claims, “They say they’re about X but really they’re about Y.”

But conveniently, Basel Musharbash, an antitrust attorney and important figure in this movement, recently wrote a guest post on Matt Stoller’s Substack laying it out in his own words.

The post is ostensibly about housing costs in Dallas and starts with some throat-clearing “to be sure” stuff about how YIMBY reforms to land use and building codes could be good. But he then says the abundance movement’s focus on such things is fundamentally misguided and takes us through a lengthy and detailed tour of his various critiques. Eventually, though, he zooms out to explain that his overall worldview is defined by blunt hostility to the idea of large investor-owned enterprises — in his view, the whole economy should be small businesses that are owned primarily by practitioners:

What we meant by “property ownership” was not only dominion over land, or goods, or businesses, but responsibility for them as well. We understood that owning something meant caring for it and stewarding it, so we expected ownership to be an extension of people’s vocations. Hospitals were to be run by doctors, industrial firms by engineers; homes were to be owned by homeowners, and building was to be organized by builders; and the financing for all of them was to be provided by local bankers and credit unions and saving associations — themselves outgrowths of local business and local thrift and local wealth. There were problems and exceptions, of course, but this was the basic philosophy underlying our political order and our policy apparatus.

I’m not going to try to squeeze a substantive critique of that worldview into the middle of this article. I am just really urging everyone who writes and thinks about politics and policy to understand that this is what the worldview actually is.

Different people get interested in politics for different reasons. Maybe you’re passionate about health care or feminism or racial justice or the environment. You navigate a landscape where you understand yourself to have coalition partners whose main interests are different from, but ideally compatible with, yours. Perhaps when you hear about an“anti-monopoly movement,” you think that sounds compatible with your cause. But it’s important to understand that this movement is defining “monopoly” in an eccentric way.

I, personally, am a journalist who works for a journalist-owned small business. But I also think it’s fine that there are journalists who work for The Washington Post and the Wall Street Journal and The New York Times and CNN and Vox Media. What’s more, even though I would personally benefit from making it illegal for journalists to work for an outlet that isn’t journalist-owned, I think it would be morally wrong to enact such a rule — for free speech reasons but also because it would be an anti-competitive barrier to entry.

I am also, as we speak, sitting in a small local coffee shop whose owner does shifts in the store.

But I think it’s good that Dunkin (owned by a private equity firm) and Starbucks (a publicly traded company) are also allowed to exist. I think it’s good that if you want to get a loan in Kerrville, Texas, you can apply to a professionally managed bank with nationwide operations rather than being limited to a local pool of capital controlled by good old boys. I think the existence of chain hotels makes it easier to confidently book a safe and clean place to stay in a town you’ve never been to.

Antitrust is genuinely important

It would be convenient for me if I could just say these guys are cranks who are wrong about everything.

That’s not true, though.

The movement’s obsession with the idea that all businesses should be owner-operated has driven coverage of the important phenomenon of private equity “rollups” of different kinds of service providers. The idea here is that a private equity firm might look at a business that has traditionally been highly fragmented (locksmiths, say) and instead of just buying one locksmith business, they buy a whole bunch of them. Why would you do that? Well, maybe there are variations in how well-managed the locksmith businesses are. You can buy the best-managed locksmith business and keep the manager in charge. Then, you buy three more locksmith businesses and have that first manager improve the operations at the other ones. Now you’re making money.

But you could also be making money by just reducing the amount of competition in the locksmith trade, letting yourself increase producer surplus while raising prices. Part of what makes this clever is that regulatory review of mergers normally happens because the dollar value of the acquisition is large. If you’re buying small companies, you can fly below the radar. These services tend to be geographically bounded in their scope, so you can obtain a dominant position in the market for dental services (or locksmithing) without necessarily making any huge acquisitions.

The new anti-monopoly movement has done a lot to bring attention to these cases, with the FTC settling a big anesthesia rollup case in January, and is raising valid questions about rollups in areas ranging from fire trucks to ambulance services and beyond.

Where things get tricky is that I think private equity roll-ups are bad because I sincerely think anticompetitive mergers that raise prices and reduce output are bad.

But it seems to me (per Musharbash’s article) that the “anti-monopoly” movement actually doesn’t care that much about this, and has a totalizing opposition to the formation of large business enterprises. As a result, it’s genuinely hard to tell if hostility to any given private equity acquisition is driven by sincere concern about diminished competition or if it’s something like the Parker Immunity case, where the actual goal is to protect small businesses from needing to compete with larger ones. Barry Lynn, the godfather of this movement, was writing articles in 2006 about how Walmart was a monopoly and in 2024 about how Amazon is a monopoly. Which is just to say he is using idiosyncratic language such that big successful companies are “monopolies,” even when they clearly compete with each other.

It’s this worldview — that America should be a patchwork landscape of owner-operator businesses with starkly limited roles for big chains and impersonal financial capital — that’s at odds with abundance.

Not because abundance is hostile to antitrust enforcement or friendly to monopolies, but because abundance requires regulatory policy to genuinely focus on questions of economic analysis of competition issues rather than a kind of aesthetic cultivation of small businesses. This worldview also leads you to believe that the important question to ask about Facebook and Instagram is whether it’s bad that they’re one giant company instead of two smaller ones, rather than asking about the impact of the content on kids or whether the presence of smartphones in schools is hurting learning.

Antitrust policy just isn’t a tool for addressing every possible concern about the direction of society.

But the actual problem of anticompetitive mergers or cartels raising prices and reducing output is a real thing, and there are good reasons to believe we may need to change up our enforcement system and devote more resources to it so that we can tackle some new anti-competitive tactics.