I enjoyed Matt Bruenig’s recent essay about the New Antitrust Movement. He dives deep into the work of Barry Lynn to underscore a point I’ve made before, namely that despite its name, this is not a movement that is actually interested in competition policy. The focus is simply on the idea that big companies are per se bad.
They often invoke the rhetoric of competition, but as Bruenig notes, they bungle the details here.
He gives as an example the movement’s previous obsession with the Luxottica conglomerate’s monopoly position in eyewear. The company did get very big, and it charged high prices. But that led to new competition from companies like Warby Parker and Zenni. Similarly, Lynn in particular spent the mid-aughts convincing a lot of people that Walmart was a monopoly, only for Amazon to sweep in and then also be accused of having a monopoly.
What they miss here is that a competition analysis requires looking at barriers to entry, not just at the number of players in the market. The capital stock in the housing sector is the single most fragmented industry in America since such a large share of homes are in the possession of owner-occupants. But rents in many markets soar above what you would anticipate based on the replacement value of the buildings, because there are extensive regulatory barriers to building new homes and renting them out. If you’re genuinely interested in competition, you need to enforce antitrust rules, of course, but you should also care about regulatory restrictions on supply.
If you just care about companies being small, that’s a completely different concern.
And there’s a real cost to this obsession with smallness.
Keep reading with a 7-day free trial
Subscribe to Slow Boring to keep reading this post and get 7 days of free access to the full post archives.