Re: measuring stuff it turns out "how do you measure market power" can be the subject of a whole class which at Yale is numbered ECON 3385. Right now we are on week 3 and we are still working out how to estimate demand in multi-product markets.
Re: the broader point of the post, I agree that "corporate power" can be a vague term, but I think you could've engaged more with some of the evidence that market power has been increasing. For example here is a CEA brief from 2016 that we had to read for the first meeting of antitrust policy class: https://obamawhitehouse.archives.gov/sites/default/files/page/files/20160414_cea_competition_issue_brief.pdf. It finds that firm entry rates are down, more and larger mergers are happening, etc etc. The brief itself notes that this is not slam-dunk evidence that concentration is for sure increasing across the economy, but it is suggestive that something may be happening.
I was going to make a whole comment about how I guess I don’t need to teach my Industrial Organization class this semester if this is something we can’t measure and shouldn’t talk about so I’m glad you did instead. Market power is real and measurable, regulation is real, the growth of trusts in the Gilded Age was real and had real consequences. And the rent seeking behavior of corporations increases with market power. This isn’t very complicated stuff.
something when it comes to the most prominent spokespeople for the “corporate power” crowd…I should state up front, a crowd I’m clearly more sympathetic to than Matt (I brought up in another comment, a very good example is FanDuel, DraftKings and casinos using their lobbying power to make gambling way to accessible to average Americans).
But I think a good example of a prominent “corporate power” spokesperson is Zephyr Teachout. She was on a podcast with Ezra Klein having a debate about why housing costs are higher in California than Texas. The only answer she kept giving over and over again was “Corporate Power”. Ezra tried, really tried, to get her to unpack what she meant by this and…she basically wouldn’t do it. Honestly it came across as pathological to me almost as though she couldn’t conceive of a reason why housing costs in California are higher than Texas due to something other than “Corporate Power” (which is kind of nuts when considering the political of CA vs TX). It honestly made me tilt my head back in frustration especially because Ezra clearly has some sympathy for this explanation of various policy failures. He just could not get through to her to a) explain her reasoning more and b) at least try to conceive of the idea there may be another reason why a policy failure is happening other then “corporate power”
I think maybe two things could be said. One, the left “Corporate Power” crowd maybe just need better communicators. Two, if you want to craft good left of center public policy, assuming “Corporate Power” is some skeleton key to unlocking all policy problems is going to likely lead to some bad policy if that’s your driving belief.
Matt touches on many deep subjects in this piece. Colin’s focus here is helpful. As Matt notes, (“the term works fine as a shibboleth. If a writer writes about taking on corporate power, that signals something about what they believe”) shibboleths — labels for group membership — serve a function. As Colin (and Ezra) observe, Teachout and (and Warren and Jayapal and millions they represent) insist that the label has analytical power and trenchancy. Matt does a service by showing that it does not.
Wealth as we have enjoyed it since the invention of railroads, industrial fertilizer, automobiles, antibiotics, birth control, and on and on, is realized by creating organizations of enormous complexity, scale, and cross-polity span. Since Marx, the left has decried the resulting alienation of labor. Since the Luddites, the petit bourgeois / local bullies have decried the resulting disempowerment of local elites. When we train today’s elites in the reading of laws and Zora Neale Thurston novels without also training them to build organizations that build the machinery of human prosperity, we leave untouched the natural human tendency to frame the world in terms of protagonists and antagonists. The world of human flourishing — today’s world — is a world of systems and statistics and management. Most people hate those structures. It is a great failing of Matt’s audience the liberal professional-managerial elite that we continue to recreate ourselves around this pathological, willful ignorance.
Alienation of labor is kind of at a breaking point, though. It’s a huge reason for *gestures wildly at everything*
And that’s not because everyone’s been reading Zora Neale Hurston novels, it’s because most corporate work environments suck and that’s most of what’s available. Dumb metrics, having to kiss ass, most of it customer service rather than producing anything tangible, do more with less, online training modules, etc. With the ever-present threat of layoffs and the joys of AI-moderated job applications if your number gets called.
A lot of people who would have been fine, basically, with the way things were 100 years ago - when admittedly there were still corporations - aren’t cut out for the modern work environment. And because of wage compression, even with higher real wages you feel like you’re running in place. It *is* alienating. That + the internet = mob with inchoate rage burning down the system.
People want systems that are more human, suboptimal as they may be. People want to own things, things more tangible than shares in an index fund.
" it’s because most corporate work environments suck"
Is it only corporate jobs that suck? Most jobs aren't that great. That's why they pay you. Somebody wants something done they don't want to do themselves, or can't do themselves. And so they pay you to do it.
You don't need to pay people to do stuff they already want to do, because they are already doing it.
"A lot of people who would have been fine, basically, with the way things were 100 years ago"
No they weren't. Things 100 years ago sucked WAY WAY WAY more than they do now.
Hours were worse, conditions were harder, and worker protections were basically nonexistent.
Further, I don't think wage compression is the big problem, the big problem is regulatory created scarcity of some of the most important things in life has made things like housing unaffordable.
I think you’re right about the artificial scarcity and the worse conditions in the past. But 100 years ago people weren’t burning down the country and its institutions; there was generally faith in the system, even after the Depression. One reason is the internet making everyone crazy, and another reason is the Baumol effect/anti-abundance rules. But still another reason is surely labor alienation! It’s vibes, but that makes it no less real!
Yeah, but none of those things are inherent functions of something being "corporate." I've faced worse versions of dumb metrics, required ass kissing, bad training, shitty management, and powerlessness working for small family or solo practitioner businesses than I have working for startups.
Okay, but a corollary to the general observation that 90 percent of everything is crap is that 90 percent of all politics is psychobabble. There is a reason I don't actually spend very much time in my private life listening to the campaign speeches of Democratic politicians, even Democratic politicians I broadly agree with on the issues or think are really smart idea people, and it's that the vast majority of their public-facing output is psychobabble. It has always been so and likely always will be so; there is no imagined past golden age of voters weighing up complex public policy before deciding how to cast their votes. The Anti-Psychobabble Party would, if formed, be roughly as successful and long-lived as the Anti-Masonic Party.
I saw that interview and I was appalled. I had heard her name before, but never seen her before. She is clearly incapable of rational thought. How did she get a prominent position at a law school? How did she even make it through law school? The interview is filled with vacuous blather like this:
Ezra: How sould we try to deal with <issue>?
Teachout: Well I believe in the future. If we would just harness the power of the future, we could do it!
She did not make a single coherent point in an hour and a half.
Do you find that the usual anti-corporate power suspects use this data frequently when making their case? I certainly haven't noticed it, but their behaviour online is so poor that I have to admit I don't go looking for their more substantive stuff.
The issue is not that IO doesn’t have good answers about measuring corporate power, it’s that the people in charge of regulators ignore the field when given the answers.
Yes and no. My IO class will look at models of competition and measures of competition and the various policies we’ve tried to increase competition and prosecute collusion. That’s definitely a different topic. But one thing I emphasize in my classes is that the paradox of capitalism is that competition is the magic power that gives us all the good things that come from capitalism (innovation, lower prices, greater efficiency) but firms absolutely hate competition and will do whatever they can to reduce it. When that takes the form of product or process innovation, that’s great. But when it takes the form of anti-competitive practices and rent seeking, then that’s when public policy needs to step in. The industries that people complain about tend to be those with less competition and higher profits. When those profits are used in a non-productive way to increase market power (lobbying, mergers, etc.), that’s the corporate power about which people complain.
It’s always going to be a balance because we don’t want the “ruinous competition” that drives companies out of business. Firms need to make profits. But we also don’t want firms with lots of market power to be able to protect that market power through non-productive activities. We need to always have firms nipping at their heals to try to capture some of those profits for themselves.
The political discourse and vague political power insinuations that MY was largely focused on is adjacent to the companies as market operators subject.
Asserting simplistically that "[w]hen those profits are used in a non-productive way to increase market power ... that's the corporate power about which people complain" is
(a) the last part making an assertion that clearly does not actually fully align the way certain persons that MY is citing are using it -
(b) collapsing the various routes of political influence and frankly a gross over simplification of companies competing lobbying (of which e.g. incumbents promoting supposed protective regulations as they know it is a Barrier To Entry that de-facto reduces competition).
Certainly some people of specific academic backgrounds are using it in that fashion. But that is not clearly what the MY cases are (as in e.g. the vague assertions of Corporate Power by Teachout about housing costs).
There is certainly adjacency and there is certainly legitimate (as in empirically founded) company market power via non-market (regulation etc) means subject but MY is addressing very clearly a people using this slogan in quite different ways.
"But one thing I emphasize in my classes is that the paradox of capitalism is that competition is the magic power that gives us all the good things that come from capitalism (innovation, lower prices, greater efficiency) but firms absolutely hate competition and will do whatever they can to reduce it. When that takes the form of product or process innovation, that’s great. But when it takes the form of anti-competitive practices and rent seeking, then that’s when public policy needs to step in. "
This all seems right to me.
But the important addition to that is quite often the way that businesses do this is through the regulatory power of the state.
This is interesting. I think "corporate power" is just pretty vague and covers several related concepts, but unfortunately a lot of the people bandying around the phrase, like Teachout, are just not clear enough thinkers to recognize this and tease them apart. I was mostly not thinking about market power, but about the influence large corporations and trade organizations have over policy.
You estimate the demand curve based on data on prices and quantities, then you estimate the supply curve, then use economic theory (which bit of theory depends on the market structure) to back out the firm's marginal costs, then you can compare marginal costs to the prices they charge and that's how you get the markup. Like I said this is the subject of the class I am in.
Are you measuring US-only corporate markups? It gets kind of tricky when you start analyzing how much of our consumer goods are obviously not manufactured by US entities- presumably at declining profit margins, isn't involution & deflation the whole Chinese story?
I.e. I could imagine that markups are increasing for companies that are still left in the US (tech, finance, medicine, professional services)- but they're declining for basically anything made in a factory, which is increasingly not done here. You know?
I use the Tremblay & Tremblay textbook in my class which isn’t too technical but not for a lay audience. There was a special issue in the Journal of Economic Perspectives in Summer 2019 that looks at markups and antitrust.
Markups are clearly the best measure of "market power" in the static sense--concentration is but a proxy (and often a very poor proxy).
But markups measure the difference between price and cost and cannot distinguish between markups increasing because costs are going down (good) and markups increasing because price is going up (bad). It is often the case that markups are extremely high in dynamic industries where costs are falling dramatically because of innovation. For that reason, it would be a mistake to focus our policy on industries/firms that currently enjoy high markups.
The alternative is to focus on markets with high concentration, which is generally how the American antitrust agencies operate (this concept--more than markups) is embedded in their merger guidelines. But, we must always remember that high concentration is a weak proxy for low competitiveness.
It is definitely a complex issue, especially when you move from thinking about static efficiency to dynamic efficiency. Microsoft clearly had lots of market power in office software in the 1990s but Google was coming to eat their lunch.
Yeah, there actually is a whole body of academic work in the space. Matt is right that his enemies are annoying and wrong about a lot of things. But he hasn’t actually taken the arguments of those working through these problems at all. It’s early for me, but it’s increasingly a blind spot for Matt to write posts about the people he doesn’t like and paint with too broad of a brush. It’s getting rote and a bit lazy.
He does it on issues where he's clearly just flying on vibes himself, so he picks the weakest opponents and flays their arguments, then hangs out the Bush-style Mission Accomplished sign and goes home.
I do think Stoller is an idiot, Teachout is worse, and Kahn is only marginally better, but pretending like the US isn't shot through with regionalized monopolies and oligopolies that either stem from rent-seeking and regulatory capture or enable downstream rent-seeking and regulatory capture, is just irritatingly myopic.
More centrists and moderates need to learn that being on social media can dull their intellectual tools. It's not just a risk for leftists and the far right.
Well in fairness to Matt he is engaging with well publicized arguments of the most prominent spokespeople of this movement and the arguments are pretty weak.
I would give extra likes to this post if I could. As someone who’s done battle with these folks in professional forums, I could not agree more about how bad they are. But he’s he’s very happy to write about them rather than engage with a host of serious corporate issues that matter. It’s cheap and getting old.
I think Matt partly likes stirring the pot and partly is using the strategy of putting out the wrong answer to get the right answer. I agree that there is a real topic to address there, but it’s interesting how approximately no one in the discourse is trying to apply real insights from research.
“…look for other culprits. Those might be things like bank forbearance policies, under which struggling firms were kept alive for longer; low interest rates, which allowed companies to refinance debt rather than going broke; or housing policies preventing workers from moving from struggling parts of the country to relatively prosperous ones.”
Banks are heavily regulated. Interest rates somewhat less so, but are significantly affected by regulators. Housing policies are, quite obviously, government imposed.
As is often the case, nebulous ideas like “corporate power” and inadequate competition, adjudged by many to be market failures, are in fact government failures.
Ya, I don't get this concept. "Market Power" in the sense described by Milan is a real thing, and it relates to what some of the folks decrying "corporate power" mean, but it's clearly not what most folks mean.
One way to tell this is that ... none of them are citing the numbers that Milan's learning about in ECON 3385!
Milan's reply reminds me of attempts to sane-wash the "Defund!" folks. Like, sure, there's a sane point one can make that's adjacent to the topic at hand. But that's just not what folks are talking about!
“Market power” has a specific meaning that can be measured (although it’s hard to do and the 2016 CEA brief is a *terrible* example of how to do it, even Jason Furman says so). “Market concentration” also has a specific meaning that can be measured, though the value of this measure is hotly debated (it’s a loose proxy for market power and can be useful when looking at a specific market but is totally meaningless when applied to the entire economy, where concentration in the thousands/millions of separate markets is increasing and decreasing all the time). “Corporate power,” like Matt says, has no meaning. It’s *always* a rhetorical sleight of hand. Lina Khan, Elizabeth Warren, and OMI/Revolving Door Project (funded by corporations like Oracle, Yelp, and Microsoft) know about these other more meaningful terms that can actually be measured and choose not to use them on purpose because they are deliberately trying to mislead because truth is counterproductive to their objectives.
This is probably something I will pitch Jerusalem on sometime around end of May or early June after I've completed the two antitrust-related classes referenced in my original comment. (Now's as good a time as any to mention that starting February 2 I will be a fellow at The Argument.)
In the middle of the essay, I thought Matt was going for the distinction between, on the one hand, economic market power (both on the output side, driving up prices for consumers, and on the input side, driving down wages for workers), versus, on the other hand, political power. E.g. I've heard the critique that Lina Khan-style antitrust focuses, perhaps too much, on hostility to big corporations that are capable of wielding political power, even when the antitrust actions are unnecessary or unhelpful to consumers in a pure economic market power sense.
But for both of these definitions, "corporate power" tends to be greater in highly concentrated markets with a few giant businesses, and it seems obtuse to object that the small businesses in less-concentrated markets are also technically "corporations." They are, but being small and facing lots of competition, they don't have much power.
Strange that Matt went the "they're all corporations" route here.
Not to mention “corporate power” also means “the power to lay people off,” “the power to cut pay,” “the power to relocate and restructure,” “the power to buy and shut down a competing business,” etc. These are what people don’t like. Bigness isn’t so bad so long as people have close to total job security and the company is always hiring, at high and rising relative wages.
Laying people off, cutting pay etc. are related to market and political power. Market power on the labor inputs side, and political power in terms of getting regulations that don't protect workers from these things.
Is it? Small firms lay off workers all the time for reasons that have absolutely nothing to do with market power. It's also the case that small firms routinely use noncompete agreements (e.g., the solo proprietor hair salon that wants to avoid its workers poaching customers--you may not think that is a sufficient defense of the noncompete agreement, but it's 100% not an example of a firm exercising market power as a purchaser in a labor market).
Market power is only one type of power a corporation may have. There are other potential measures of economic power, like monopsony, gatekeeping, or financial power.
Then there is political power.
There are several measures of social, cultural, and status power. For example, Harvard and Yale are powerful not because of their market power, but because of their influence in elite production, especially SCOTUS Justices.
Media corporations can be measured in their influence in terms of setting agendas and influencing elite and national discourse.
Nowhere does Matt talk about "market power" which if I remember from my own long ago days upper level B-School classes is the roughly ability of one player within a market to independently influence that market's behavior. Matt uses the phrase "corporate power" which is more a poli sci concept: by what measure would you decide that some political actor "corporate" has greater or lesser influence when examining Alabama versus California?
Sure but this is kind of a dodge here; the Neo-Brandeisian types are making both the political argument and the policy argument and there is some merit to their policy argument.
It seems to me the most significant way in which big business has more power than in the past is the mobility of capital, including internationally. The threat of capital flight severely limits the ability of government at all levels—and thus people—to constrain and shape corporate actions. But I’m being mushy and non-quantitative here, so feel free to shoot me down with some numbers.
It seemed to me MY was not really speaking to the economic and market efficiency question but the political one.
Different subjects. His examples, his focus to me is clearly the political - and the vague undefined "corporate power" that really is basically just a mask on anti-capitalism largely.
Sure, but he’s written this post 10 times. It might be valuable to actually look at the literature on corporate behavior, both the economic and political. There is a robust amount of real academic work in the space. The 100th piece about how Matt Stoller is stupid and annoying is not illuminating.
I would agree, except that the Stoller approach seems to be the one that Progressive Democrats are leading with politically. Its similar to saying there is a good case for using tariffs to combat China's economic subsidy abuse, but then going with Trump's approach to raising tariffs on Canada for running an ad he didn't like on TV.
Its good to say Trump's approach is stupid repeatedly until he stops. Its good to say that Stoller et. al. "corporate power" approach is bad until they choose to use a better one.
Paul Krugman also has written about how the growth of various forms of economic rents may be an important, if difficult to measure, factor, in ongoing working- and middle-class discontent. Monopoly or monopsony power, overly broad intellectual property rights, etc.
Milan is right, but he is both overthinking the measurement problem and under-scoping the concept of "corporate power". Market power is clearly only a subset of corporate power.
As for the measurement issue, the proportion of business income attributable to economic rent is a straightforward measure of business' capacity to achieve its primary goal (profit) without being exposed to its primary constraint (competition). So, "proportion of business income attributable to economic rent" is a workable (i.e. feasibly measurable and readily explainable) summary metric for business power. If you limit the measurement to companies above a certain size, then you have a workable measure of "corporate power".
This work is being done. Ross Garnaut bangs on about it at length in the Australian context, and I see from a very quick web search that Mariana Mazzucato (yay!) is onto it as well: doi.org/10.1093/cje/bead013
What I think is going on is that the people who are actually measuring the spatiotemporal landscape of corporate power are not using the term "corporate power" in their discourse, and (given the examples in your post) vice versa. Maybe you should be the ideas broker!
One final quibble: whatever "corporate power" is, its scope is national and not provincial. Trying to ask whether corporates exert more power in Michigan than Oregon is a non-sequitur.
C'mon, Matt. You've been around these people your *entire* life. Adept verbally, they use language to illuminate, advocate, describe, defend or obscure. If they are using some words that you cannot understand, that is by design.
They are anti-capitalists. Same as the communists in the 1930's, same as the campus radicals of the 1970s, now they are Democratic Socialists. They broadly believe their own morality is so superior, their ideas are so brilliant, their cause is so just that they should be in charge of making decisions about ... well, everything. And they believe making a profit is de facto proof of exploitation.
Let them be the critics. That's useful. Also, a market economy results in losers as well as winners, and these people can create systems and non-profits for making losing a bit less hurtful and catastrophic. That is a valuable and necessary role for a successful society. But we cannot let them actually run things. That would be bad.
You’re more harsh than I would be to the far left anti “corporate power” crowd (not surprisingly). But I feel like you made the exact same argument I make about hardcore libertarians and your last paragraph could be word for word a paragraph I would write about libertarians.
Sort of speaking of which. An example where libertarianism as an all encompassing philosophy falls short to me AND a place where (I think) I can give an example of the problems associated with “corporate power”; gambling. It’s really hard to tell the story of the uptick in problematic gambling habits (especially among young men) without talking about the “corporate power” of FanDuel and Draft Kings at the state and local
level, as well as the “corporate power” of the casino lobby.
This reflects a perennial argument I have with my more leftist friends. What they seem to dislike about corporate power the most is corporate interests wielding and directing the power of the state.
Which to my mind isn’t a problem regarding business; it is a problem of government! If government didn’t have such levels of authority, it couldn’t be abused by those kind of actors. The same problem on the libertarian side is that if you have weak enough or non-existent government that corporate interests effectively take control of power, you also have de-facto corporate control of government. And if you have government run services- those services might be run well or poorly but also face the risk of being co-opted by corruption extracting value from them, or the lack of market discipline making them more dysfunctional on average. Maybe (such as in the case of health) this tradoff is worth it and we just need to focus on oversight mechanisms and “good policy on the merits” as MY might say, but there isn’t some kind of magic way to wish away incentives.
To me the ideal system is more like how I imagine China, where the government steps in to keep businesses from failing so you have job stability, and where the government trims the sails of CEOs that get too big for their britches and think they’re John Galts instead of the truth that everything they own derives from the state. Bonus if, like China, you can still build infrastructure. 9-9-6 is trash and they should lighten up on their worker and currency. But the system of state owned enterprises that function in markets but are backstopped by the state seems like the proper nationalist thing to do. Better a state backstop than private equity vultures.
There's a phrase I use sometimes-in economics, fascism is when you have socialism, but pretend it's capitalism. State owned enterprises do not function in markets, because they can cheat. They can use the functions of the state to compel people to use their services, they can bolster failing companies (meaning companies not worth keeping around) with the state's ability to tax and borrow, the support of the state encourages cutting corners (tofu dregs), and by kneecapping independent entrepreneurs, system removes their contributions from the market. 996 is the expected result of the system you described, not an aberration.
This is my favorite comment from you I’ve read yet, and I think it makes a lot of sense as an integration of the parts of what the anti-corp-power people are saying that actually make sense.
The most specifically fallacious part of today's screed was this claim:
"I would note is that most furiously lobbied-over issues in a practical sense just pit businesses against each other. Pharmaceutical companies and pharmacy benefit managers both hire lobbyists and then the lobbyists fight each other."
As you say, there's no "Gambling is bad and we shouldn't do it" for-profit out there to battle for more regulation against DraftKings.
Of course, my mind most immediately went to the even more concerning issue of "AI is profitable until it very suddenly isn't because everyone is dead, and there is no countervailing business making lots of money off of 'don't kill everyone.'"
I'm not entirely sure how to answer your question because I'm not entirely sure what capabilities you expect it not to have nor why you you would expect that. Giving AI as much control over the physical means of production as possible as early is possible is a capitalistic imperative.
As a kind of aside: Libertarianism - the ideological variety that looks to that loon Rand - to me is really just kind of a photonegative of Bolshevism (and not really classic liberalism at all).
"Falous" is actually right about this. Ayn Rand was actually heavily influenced by Marx. She absolutely had a similar vision of "class" conflict as well as Marx's views regarding Hegelian dialectic. Probably also (partially) explains both of their hostility to organized religion.
The difference is that she took these same observations of the world and basically came to a completely opposite conclusion. In fact, you could argue her conclusions about the world was itself a Hegelian dialectic reaction to Marxism itself.
to me she basically ended up with sort of a photo-negative of Marxism, with a label of libertarian but not the equanamity of classic liberalism which isn't ideological about the state but practical.
That's likely because of her experience as a former Soviet citizen. Classical Liberalism predates Marxism by 100+ years and thus does not need to define itself in oppostion to Marxism. While post-war Libertarianism seems to have at its core a deep fear of collectivism.
Libertarians in the US of the Randian sort are obsessed more with anti-government and something more like an inversion of Marxism and not really classic liberalism.
I've always thought that the two great fallacies of libertarianism are:
1. Nature abhors a vacuum; if you render government small and ineffectual, then wealthy private capital will just control everything, leaving all of the rugged individualists dancing to their tune (though I suppose to the Musk/Thiel-wing, this is a feature instead of a bug).
2. Libertarianism has always been acutely aware of the threat of public (government) tyranny, but seems to be blissfully unaware of the threat to individual liberties posed by private tyranny, as well as the reality that most tyranny that has existed in human history is private tyranny.
Yes, and that private tyrrany readily after knocking down a formal gov, bootstraps itself into being de facto public.
Whereas classic liberalism has eyes open to the gamut and priviledges individual liberty in a pragmatic balance.
But since they're to me generally inverted Bolsheviks (the Randians who seem to be the dominant libertarians in general) like Bolsheviks proper they hand waive away anything outside of their dialectic focus.
>It’s really hard to tell the story of the uptick in problematic gambling habits (especially among young men) without talking about the “corporate power” of FanDuel and Draft Kings at the state and local
Is it? Would it fix the problem if instead of two large online gambling corporations we had a proliferation of small ones? It seems to me that the problem is that young men are gambling irresponsibly, not that the profits of that the gambling is concentrated in a couple companies.
I feel like this entire anti-oligopoly “movement” was started by some drunken brainstorming session where they were like … look, I think Communism only has a branding problem — we need a new name.
I was speaking more broadly. Every politix episode, for example, devolves into yglesias saying "we should moderate on this issue" and beutler responding by saying "we should just change on messaging on that issue."
I'm sure neo-Brandesian stuff polls well. Populism is popular with the populi and all that. But ask any redditor why don't Americans like socialism and the answer you'll invariably get is that they've been brainwashed by effective messaging/propaganda. The idea that people can understand issues and disagree on the merits is not something you see fully grappled with in progressive spaces.
I only like highly produced podcasts, like Radiolab or 99% invisible. I have basically zero interest in just listening to a few people talk for a while.
I'd be curious how this plays out with either/or questions. I think most responders like "neo-brandeisian messaging" the same way they respond to "should we cut *your* taxes" which is almost always going to be - "yes please."
Its only when trade offs are included that such discussions can have any real merit.
Tab labeled "Econ policy" 6th item down. When you present antitrust policy as "low prices or less concentration" its tied. Sorry this is a Google Sheet not a nice PDF, we hadn't figured out how to auto-generate the nice PDFs when we released this poll.
Thanks for sharing that. Its interesting and moves my priors a bit on this. I'm still doubtful that people would be happy with an aggressive anti-trust policy that actually raised prices, but if they thought it was actually accomplishing an anti-trust objective maybe they would.
Speaking as someone who has, like, literally been in in-person book groups with Sandeep Vaheesan and shit (side note: agree or disagree with his politics, the guy is incredibly freaking smart), I can assure you that those groups were both thoroughly free from attraction to doctrinaire Communism and also not really that boozy.
Obviously this comment is libel and not actual analysis, but it's worth noting that as actual analysis it's also just factually false.
I'm sure this is true of Teachout, but is it true of Stoller, for all his flaws? I see no reason to think so.
Matt has a tendency to, on topics he doesn't like or understand well, just pull the weakest gazelle from the herd of opposition commentators, slaughter them, and call it a day without addressing any of the substance.
You and I have had this out before; if you can tell me with a straight face that ag. processing is not a cartel that has carved the US into small monopoly markets, that hospital systems in rural and small urban areas have not consolidated their way to a ton of pricing power, that car dealerships haven't completely subverted the regulatory system, that a huge fraction if not an outright majority of M&A discussions center on pricing power, that exclusive supplier contracts don't deeply distort pharmacy supplier markets... then fine, everything is A-OK.
But you know it isn't, not really.
Matt and a few commenters here like to talk about how scale improves efficiency and outcomes, but that *only* holds true if those companies operating at scale are still in highly competitive markets or are regulated in a manner to make them act as if they are.
Otherwise they simply move to capture the transaction surplus and sit on their laurels, and the degree of disruption that exists in established markets like agricultural processing has never been lower, so no one is going to enter the capital-heavy, complex market to undercut them.
So I'm actually overall with you that MattY has a bit too much of a tendency to "nutpick"; take the least persuasive argument by someone somewhat prominent and assume this is the viewpoint of a large number of people*.
But this statement "that car dealerships haven't completely subverted the regulatory system" actually sort of undercuts your point. Because it's not the CEO of Ford or CEO of GM hiring corporate lobbyists across the country to ensure that they can't sell directly to consumers. In fact, I'd say it's likely in there financial interest to be able to sell directly to consumers as this would likely reduce the sticker price and result in more sales. It's actually the (to use an older term of art) petit bourgeoise who are responsible for this "rent seeking" regulatory capture. In fact, if anything this is a case where Corporate power throwing around their weight may in fact be good for the consumer.
* This to me has clearly happened with immigration. I kind of think Matt has sort of lost it on this issue. Listening to him and Brian on the podcast this morning going to work made me want to slap him across the face Cher style and say "snap out of it!". He's basically a complete doomer on this issue and is absolutely convinced the "Open Borders"/"Defund the police" crowd will end up dictating Democratic immigration policy if Democrats even slightly try to push back on DHS funding. He actually advocated for completely caving and funding DHS full stop and then saying we should then go out and immediately fund raise for Tom Suozzi. I'm like, due the center of gravity on this issue has clearly shifted. If you're goal is to be in alignment with swing voters that would actually clearly be aligned with taking a stand on DHS funding holding ICE accountable (setting aside that at some point, you have to least somewhat stick up for principles and basic decency). Like, this is not 2020, nor do we have a flawed leader who is clearly losing his mental faculties as head of the party anymore. It as absolutely possible to be anti-ICE and not given in to the most hard left open borders crowd and still be aligned with "Popularism". His doomerism on this is actually genuinely making me upset with him.
" I'm like, due the center of gravity on this issue has clearly shifted."
Has it really? Voters clearly don't like how ICE has been abusing it's authority. But Republicans are still trusted more than Dems on immigration.
The way you square that circle is voters want a secure border AND interior enforcement. They just don't want ICE acting like thugs and shooting people in the back.
I like the term "nutpick", it's like a strawman but you're finding a real person to be your strawman (typically this is possible because there's always some nut with every possible policy position)
I subscribe to both Brian's and Matt's substack and comment on both. I've noted a number of times that my inclination for awhile now is that Brian has had the better arguments last few years. The thing is that I think they would both tell you that they're actually pretty aligned all things considered. A lot of their disagreements are often on very narrow grounds. I think Brian would absolutely say that trying to shape the narrative does NOT mean that we should go out and loud and proud advocate for the most lefty policy positions because that's supposedly the secret sauce to reaching working class voters and/or you can just shift the overton window.
Which is actually kind of why I think Brian has the better argument to me. I feel like I'm summarizing his position correctly by saying that it's wrong to think that "popularlism" means that you have no ability to shape the narrative around what will get swing voters to come to your side and it's also wrong to think that just ceding the terrain to Republicans on stuff like immigration because it's overall a better issue for them, is good politics. There's no reason to needlessly start talking about the other side's best issues, but it's also problematic to fight the other side on their best issues when you have an actual opening to do so. And Brian brought this up, but MN residents keeping to best traditions of non-violent resistance is almost proof of this.
I think on the nuts and bolts of policy Matt is on stronger ground and probably knows more than Brian. Big part of why I subscribe to this substack. But I really think Brian has it right when it comes to politics. And, I appreciate that as much as he sounds alarm bells he's clearly more positive and more bullish on Dems chances of beating back this rising tide of Fascism. Matt just seems to be giving up honestly and at some point I might just try to jump in to one of his posts and kind of take him to task.
You make a good argument though I'm not sure Beutler is always better on the politics (he seems to think that Democrats holding hearings is the key to winning elections).
To be honest, while they both aggravate me with their takes, the main reason I unsubscribed is because I developed an allergic reaction to them both constantly fighting over the microphone. I *never* hear that on any other podcast.
I do think the lack of "fighting" on other podcasts is maybe not necessarily positive. I suspect in a lot of cases it's because the hosts are just agreeing with each other too much and not really having a meaningful conversation.
Regarding Politix, I debated cross-posting it here, but I was disgusted when Matt said that getting Trump to retreat in Minneapolis was not "all that significant to me personally."
I would have a great deal more sympathy with these arguments if the people leading said movement focused more on ag. processing, car dealerships, etc. instead of going after Amazon or Waymo.
As I mentioned elsewhere, there is a case to be made for using tariffs to oppose Chinese business subsidies, but then Trump comes along and threatens tariffs on Canada for running an ad on TV he didn't like. At some point with both tariffs and "corporate power" you have to acknowledge that the people leading the charge are actually the weakest gazelles using the least amount of substance.
I am making the argument that I am making, not whatever the hell Stoller said last week.
Likewise, on trade, I am not making Trump's argument, I am making my own, and I obviously believe it to be a better argument.
My only point about Stoller was that he is plainly not a communist. I otherwise said nothing about the merits of his positions, except to say he's an idiot in a different comment.
As for Kahn, I said almost exactly your first sentence to someone last week! She was a spectacular failure because she did nothing substantive to address actual abuses, except the obviously, transparently not-her-remit language trying to ban non-competes.
I think we could find a lot of common ground based on *your* arguments. But Matt's responding not to your steelman, but to the actual things that come out of the FTC or Congress from the leading advocates against corporate power.
This is probably the 10th time he's written this exact article, and there is the opportunity for him to be more useful and try to apply some rigor to this space but he plainly doesn't want to.
I am absolutely here for the comment section, as it's plain that Matt is out of ideas and Twitter is really doing a number on his priorities and sense of what's real. The ratio of lazy nutpicking to solid analysis has ballooned since I took a break last year.
"At some point with both tariffs and 'corporate power' you have to acknowledge that the people leading the charge are actually the weakest gazelles using the least amount of substance."
"that hospital systems in rural and small urban areas have not consolidated their way to a ton of pricing power,"
But they are 80% non-profits with very low seven figure CEOs - they have pricing power to keep the doors open. It's not like they are doing it to make money and reward shareholders.
I mean, critical access hospitals legally have insane pricing power because they can still operate as fee for service, but yeah, that’s to keep the door open. I think what he’s more getting at is CON restrictions that prevent competition
I'm not sold on CON as the issue - if a hospital has all the beds full and it will take weeks to schedule an outpatient visit they have no desire or ability to do any more work than medically necessary.
In a world where a bunch of hospitals are half empty and desperate for business there would be a lot more dubious medical treatment.
If all the beds are full, hospitals can raise the prices into the stratosphere. And they do! And of course, they try to cycle beds as fast as possible and bill for whatever they can (which is limited since normal hospital billing washes through a DRG)
I wouldn't take any of the positions you ascribe to me, absent not believing ag. processing is a cartel. I'm a supporter of free markets to be sure, but regulation and enforcement of antitrust legislation are critically necessary to ensure companies don't follow their natural inclinations toward monopolistic behaviors.
Where I disagree is where size alone (or, more often, a rich person as owner/ceo) is used as a justification to intervene. The idea that Amazon, for instance, has a monopoly in certain retail spaces is wrong and easily disproved by a trip to Costo, Publix, Walgreens or Walmart.com. That isn't to say Amazon can't do bad things -- any business or person can. But the solution isn't to break up anything big or rich.
Regarding mergers: I do think the Government should take a more critical approach in this area. I think they've been overly deferential to efficiency / synergy arguments and have overlooked the pricing power that drives a lot of acquisitions.
I know you wouldn't, which is why I picked them, because we have discussed them before and I understand your views to be broadly nuanced on these matters.
In the main, I agree with your second paragraph, as you know. Amazon's business absolutely has some unsavory aspects to it that may be amenable to regulation, as my mailbag question and the attendant discussion pointed at, but they are not because it's a monopoly or anything close. Walmart and Target are clear and obvious peers across most of what Amazon sells, and in other niches it contends with competition from hardware stores, grocers, etc. Its data analysis and cloud computing services are very obviously competing with Google and Microsoft, along with a gaggle of more specialized mid-sized competitors.
To the extent that I apply a heuristic to thinking about competition and consolidation, it's that the legacy economy is obviously far more problematic in many ways than technology companies are. You've got the aforementioned ag. processing, auto manufacturers trying to achieve total control and lock-out over the maintenance/asset lifecycle so they can capture all services value, pharmaceutical distributors forcing exclusive supplier contracts on pharmacies to curtail price shopping and supply chain diversification, regional medical system consolidation, whatever the hell PBMs have become.
Set against that, my main gripe with technology companies is that some of what they're making is closely akin to crack. That has nothing to do with consolidation or lack thereof and can only be dealt with by excise taxes that make it impossible to turn a profit off the advertising-revenue model. Let them see if anyone actually wants what they're peddling enough to pay a subscription fee for it, lol.
I am pretty pissed off at Stoller and co because they refuse to either do solid analysis themselves or find those who can it, so that they can actually accomplish something useful in this area of policy... but I am also deeply irritated at Matt because he should know better than to, as Colin puts it, nutpick. There's a lot wrong with the degree of pricing power and anti-competitive contracting that many entities have achieved. On some level, he knows it, or he wouldn't be so leery of grappling with the hard questions in this space.
I would happily pay for a version of Facebook that got rid of all the addictive and toxic crap and was just cloud storage for my photos and a way to keep in touch with old friends. That’s its core value proposition! And it’s very useful for that. I’d even pay a fairly high monthly fee for it. But if it were to charge high fees, the network effects that give it its value proposition would rapidly die in favor of the next VC funded social network that would be good until the moment the investors wanted to recoup their investment and then we’d get rapid enshittification again. I think most Big Tech companies are fine, but social media really should be run as a public utility.
The problem is that a lot of friends and family are responsible for writing and sharing toxic crap. Aside of course from my regular observation to you that social media as a public utility would be subject to First Amendment protections that would make it unworkable.
Excise taxes. Whopping ones. Make it impossible to profitably run a social media platform on advertising revenues alone.
I can't find a single argument regarding taxation powers in the federal Constitution that says you cannot tax the hell out of one specific type of commercial activity, though I am unsure how it would interact with uniformity clauses in some state constitutions.*
*Even here though, most of those states have narrowly applied alcohol and tobacco taxes, so presumably the case law is favorable.
Ag meat processing absolutely IS a cartel, with a number of pretty egregious examples.
One of the better known is the source of this lawsuit:
“Have you purchased meat at the grocery store over the last 10 years? If so, you may be entitled to a cash payment as part of a multimillion-dollar settlement with two giant meat companies after a lawsuit alleged they overcharged customers.
The class action lawsuit claimed several beef processors, including JBS, Cargill, National Beef and Tyson Foods, "conspired to limit the supply of beef and increase prices in the market."
Plaintiffs in the complaint, filed July 29, 2024, in the United States District Court of Minnesota, allege the meatpacking companies conspired with the slaughterhouse to inflate the prices of the beef sold to the consumer and extract gains from the cattle ranchers.
The companies denied any wrongdoing, instead agreeing to settle for a total of $87.5 million, with $55 million from Tyson and $32.5 million from Cargill.”
“The plaintiffs claim Tyson and others used a company called Agri Stats, which is named as a “co-conspirator” in the lawsuit, to exchange detailed, competitively sensitive, and closely guarded non-public information about price, capacity, sales volume, and demand.
According to the lawsuit, Agri Stats provided highly sensitive “benchmarking” reports to most pork integrators, “thereby allowing competitors to compare their profits or performance against that of other companies.”
“The effect of this anticompetitive exchange of non-public information allegedly allowed Pork integrators to control the supply and price of Pork,” the lawsuit stated.
In a 2023 lawsuit against Agri Stats, the U.S. Department of Justice said the company was organizing and managing anti-competitive information exchanges among broiler chicken, pork and turkey processors. The 68-page complaint alleged that Agri Stats violated Section 1 of the Sherman Act by collecting, integrating and distributing competitively sensitive information related to price, cost and output among competing meat processors which accounted for more than 90% of broiler chicken sales, 80% of pork sales and 90% of turkey sales in the US.”
You are absolutely right that companies try to get market power, through cartels, motes and basically any tactic available.
However, the efficiencies of scale are generally much bigger than the rents captured by oligopolists. Eg, if peasant agriculture produces 12 bushels an acre and corporate agriculture produces 130 bushels an acre and mechanizes harvesting, you can pay oligopolists and stationary bandits quite a few rents and come out ahead.
The original sin of the stoller/teachout etc types is that they're fundamentally not quantitative in their approach. They are lawyers telling just so stories. Its hard for me to find anything they say as credible or actionable.
"Matt and a few commenters here like to talk about how scale improves efficiency and outcomes, but that *only* holds true if those companies operating at scale are still in highly competitive markets or are regulated in a manner to make them act as if they are."
This is simply false as a matter of economics. Demand curves slope downwards. The monopoly pricing condition is that a monopolist continues to sell output until the marginal revenue of selling the final unit equals the marginal cost of producing the final unit. Economies of scale means that marginal cost goes down, which lowers the point at which marginal revenue equals marginal cost, which lowers price. In other words, even a monopolist will pass on *some* portion of marginal cost savings to consumers, to their benefit.
In real life, firms use data to charge consumers based on their willingness to pay - there isn't one static price, so the surplus is largely captured by the monopolist. Just look at the pharmaceutical companies and payment assistance plans for blockbuster drugs.
In the actual real world, this is the exception not the rule. Something on the order of 99.9% of the transactions you or I engage in do not feature personalized pricing or price discrimination like this. Also, pharma pricing--which is largely a function of patent protection and insurance coverage--is a *terrible* setting to make inferences about how the broader economy works. Something on the order of 99.9% of the transactions you and I engage in do not feature a seller with IP on the other side nor is the transaction intermediated by insurance.
So corporate power is the power of business interests to get the government to help them enforce monopolies and write regulations favorable to current interests over potential competitors?
That is a tiny subset, at best; there are plenty of other ways to achieve sufficient scale, consolidation, cartelization, etc... such that a firm has pricing power, leverage over contract terms, or the ability to take other anti-competitive measures.
Is that stuff also what we mean by "corporate power"? You seem trying to define all the ways a company can get a monopoly, but I was going with trying to figure out what "corporate power" is. I'm not sure those are the same thing unless you think they are the same thing?
I’m not sure it’s actually *by design* as opposed to emotional and/or mindless mood affiliation (the “superior morality”you also mention) and aesthetics. In my experience people who hold these kinds of opinions seem to take it for granted that all right-thinking people agree and persuasion isn’t required.
You are definitely describing a type. Your mind enjoys fulminating against this type and mine sort of does. This type exists, but there aren’t hoards of them. Many Bernie bros were more anti Hillary than anti capitalist.
Yeah this type definitely exists but I think it’s a second order example of “Twitter is not real life”. What do I mean by that? The number of far leftists who just mindlessly fulminate against “corporate power” is probably a smaller number of people than we think. But they get interviews, their ideas get thousands of “likes” on Twitter and suddenly some staffer is telling a politician “this is the voice of the people”.
I’ve brought this up before but in 2020 there was a woman who wrote a book basically arguing rioting was a good thing because attacking businesses was actually a way to address racism (or something). And she was interviewed over and over again on every freaking platform you could think of. You would think she was like the great “voice” of a generation when she was really a rando who wrote a book with a thesis at the absolute most opportune time. I feel pretty certain if you ask anyone who marched in BLM protest whether burning down a convenient store was a good thing in of itself the large majority would have said that’s pretty ridiculous.
And that case is probably just strategic nutpicking. Same with Kendi/DiAngelo. Deliberately engineering the backlash they want, like having agents provocateurs at protests or burning the Reichstag
It is pretty funny when they're ideology runs into law and their cases get tossed. But every once in a while they win and close a business, which is more harmful than general anti capitalist squawking.
I think the reality is a bit more nuanced that "lol goofy ideologues get EXPOSED by real legal analysis" and somewhat closer to "US courts are generally quite pro-business and in recent decades skeptical of ~any antitrust agency's enforcement actions"
Antitrust laws are typically very vague (in the US except for a few defined “per se” violations like price-fixing, most antitrust violations are judged under a “rule of reason”—the court decides if what you did is reasonable). And neither courts nor activists tend to be professional economists so there’s a ton of wiggle room and a bit of amateur hour on all sides when it comes to this.
The real legal overreach of Khan was trying to pass rules outside the FTC’s remit like the ban on non-compete agreements (which I agree with on the merits but it’s not something an agency should just be able to do).
I was glib but I disagree, it's somewhere in the middle based on the rebukes some of these cases get for lack of bringing any evidence of either market definition or monopolistic claims over it:
In most countries it’s just called “competition policy” but we have a special name for it in the US because the first laws about this were written in response to late 19th c. trusts.
I don't think this is accurate at all. Some people who are opposed to "corporate power" like Mamdani are socialists. But the anti monopoly people talk about this a lot too, and they're very focused on small business and competition, not state ownership.
My argument is that even Mamdani and his cohort aren't socialists (in the sense of seizing the means of production), but that they are anti-capitalists. Same as the anti-monopoly people. They are supportive of small businesses (as long as they don't make much money) and competition (as long as nobody wins the competition).
I too support competition only as long as nobody wins the competition. As much as business owners might wish otherwise, it's a terrible idea to let them cross some sort of finish line and then they have to stop racing against competitors.
I know that's probably not what you meant by "win", but the idea of businesses being allowed to "win" and then leverage state power or other means to no longer have to compete is a genuine concern.
I think a system where there was ownership of all businesses by individuals who kept the profits, but businesses were small, would obviously be described as "capitalism".
Right, if you read Matt Bruenig's writing, he's against the anti-monpoly types *specifically on socialist grounds*. Like Matt wrote, it's far more coherent as an affective posture than an ideological one.
"It’s just that there are basically two kinds of economies: one where businesses are growing and thriving, and one where there’s no growth and the economy is sputtering."
I think you hit on what they want - a small college town of book shops and vegan restaurants and art galleries and organic food co-ops where everyone can live an upper middle class bohemian lifestyle.
The question of what it takes to produce the natural gas to heat the homes and generate the electricity, how the cars and construction materials and water treatment infrastructure and the pharmaceuticals and medical devices and the consumer goods are designed and built ...all that can just be ignored. That's a world a lot of people really want to live in. It's totally unworkable, but for many it's esthetically pleasing.
Exactly - if you talked to the person holding that sign thats what they might think. It's all ignorant feel good nonsense. But a lot of people go through life on a bubble of feel good nonsense*.
* It's like that famous woman recently who had breast cancer and the oncologists said you need a mastectomy, chemo, etc. And she said, "I know my body is strong and I know the body knows how to heal itself. I don't need that." And...she died.
Also see Steve Jobs and his highly treatable insulinoma(sp).
It wasn't obvious to me. I lose track. I don't know Edward Scizorhands's political preferences. In general, I wish the Davids on this site had a little more curiosity and were less judgmental. There's too much dogmatism and too little questioning.
I think this is a great insight, and to add to it, there is absolutely nothing wrong with having that as an aesthetic preference. Towns like you’ve described are great and I don’t hold it against anyone for wanting to live in a place like that. The issue is this is being presented as a political preference rather than an aesthetic one. You want to make every city in America ‘feel like’ a thriving college town? Honestly I get it, but as MY wrote that’s not a measurable goal.
I’m as allergic to Warren and Khan’s lazy rhetorical approach as Matt is here but certainly there’s clear measures of “corporate power”. You can look first at the share of concentration by industry (e.g., 50% of Vet clinics are now owned by sophisticated financial owners / roll-ups) and you can look at profit margins within and across industries. The nuance here is “corporate power” just becomes leverage and that negotiating leverage is just as likely to be deployed against suppliers to lower consumer prices (e.g., Walmart) as it is to create competition barriers to raise prices and expand margin. The big trouble for this laziness is from a consumer surplus perspective a duopoly likely the most competitive and efficient structure by concentrating the market share risks as winner take all while creating the two largest absolute margin flows to invest.
Both Board Seats (of what publicly traded corporations? Limited liability companies - which by the way don't have Boards) and Corp Gen counsel office metrics are nonsensical and have no meaning. There's zero relation betweeen these things.
Medicine is a rare area where there are laws that specifically target and try to keep out corporations--anti-corporate practice of medicine laws that make it nominally illegal for anyone not a human licensed physician to own a medical practice. Yet the majority of physicians now work for practices controlled, if not literally owned, by corporate entities, such as hospital systems, health insurers, private equity, and in the latest trend, drug wholesalers.
So what have CPOM laws accomplished? Not much it seems, except to make healthcare deals more complex and therefore more lucrative for law firm and investment banking advisors. And maybe to slightly increase the leverage of physicians selling their practices to corporate buyers.
I think what the smarter "anti corporate power" people really want instinctively is for businesses not to be rich or powerful enough to lobby the government effectively. In their view, that's antidemocratic. Debates over whether and how much we regular business should be conducted solely by disinterested citizens in the world of takes. If you're too small to lobby, then you're fine.
There are probably ways to measure that. But one problem is that there isn't really a clear correlation between business size and lobbying strength - as Matt has pointed out in the past, the big Wall Street banks got rolled during the Dodd-Frank debate but Elizabeth Warren herself was forced to allow a carve-out for regional banks; local car dealerships are among the most powerful trade lobbies in America; etc. So if a key part of your factual premise is wrong, then it's going to be hard to create metrics that fix the problem you've identified.
And smaller businesses can of course join together form their own organizations--a corporation, if one will--to create large lobbying efforts. Just off the top of my head, the American Medical Association, the National Automobile Dealers Association (NADA, what an appropriate acronym for what that group should be...)
There is a LOT to this. The anti-corporate-power people have always struck me as “clever, but not *bright*”.
In rightwing troll parlance, they’re wordcels: Good at spouting off a bunch of words that are consistent within their own self-constructed framework, but not valid under any broader scrutiny.
Moreover… they have a near-total overlap with the “MoNeY iN PoLiTiCs!1” crowd. To echo and paraphrase your initial point, these are the people who would’ve let Blago off if he’d tried to sell Obama’s Senate seat for the benefit of blind orphaned cancer kids; what they don’t like about the money isn’t the money itself, it’s that it subverts the democratic will and vague notions of fairness and charity.
The thing is, as wordcels, they aren’t REMOTELY smart enough to understand any of what I just said. They are classic examples of ACX’s “conflict theorists”.
There's some nice illustrations of this when you investigate the property tax per unit area. Small business pay considerably more, while the Walmarts of the world are very good at quietly extracting local and government wealth. A place may have existing stores, but then Walmart arrives and an excited DOT and local politicians trip over themselves to provide an interchange, a stoplight, a frontage road, extent sewer lines, etc.
I consider myself pretty pro-capitalist and also admit that many of the anti-trust crowd are morons or communists, but it strikes me as a real problem and I think centrist technocrats, of which I count myself, are overly impressed with the reputed economies of scale and miss something about city finance.
And culture - it irks me that Matt has a very "cute fine grained indy-store urbanism for me, Walmart for thee" attitude about these issues.
"I think what the smarter "anti corporate power" people really want instinctively is for businesses not to be rich or powerful enough to lobby the government effectively. "
There are clear measures of it but the problem is anti trust lawyers really really hate economists and are mostly allergic to the (generally widely accepted) math.
They just don’t like or understand the accepted measures of monopoly and consumer/firm harm, or the generally accepted definitions of market failure.
“… negotiating leverage is just as likely to be deployed against suppliers to lower consumer prices (e.g., Walmart) as it is to create competition barriers to raise prices and expand margin”
I noticed you failed to offer an example of your second idea. Maybe there are none?
I'm familiar enough with Ishbia's micro-roll-up thesis (i.e., seen the friends and family pitch decks) that it's not hyperbolic to say they just buy small clinics and raise prices. There's like 1000s of example like this.
Re: “safer streets,” I have even heard this used in the more literal sense. That is, as a framing for an agenda around reducing auto and pedestrian fatalities. What some may hear as a tough on crime attitude is actually just a politician expressing support for anti-car measures, two very different things.
I am anti moronic unlawful drivers. We have let vehicles become more threatening to non drivers and increased the amount of horsepower relative to weight.
It doesn’t help that we have found a way for morons to finance $70k trucks with maiming plows as daily commute vehicles.
I was at the TRB* conference a couple of weeks ago and it was kind of weird to hear administration officials going on about “safe streets” in the policing/enforcement sense (“supporting our police”). Usually at a transpo confab that phrase is used to mean something closer to what you describe, and there might be discussion of ways to automate enforcement, freeing up human resources for other purposes. But (maybe in an obverse of “corporate” on the left) there seemed to be a desire to talk a lot about “police.”
There was *a lot* of the former (apparently it will even fix NEPA!) but there was somewhat less focus on equity. In general, it was pretty boring! Only a couple of sessions I attended were interesting (in a very narrow sense, NEPA assignment being one of them but weirdly there were two virtually identical panels on this topic; I only went to one).
I've seen some interesting stuff at past conferences (the impact of not providing [frieght] truck parking, "Projects that Didn't Go Well," etc). Not so much this year. And the career fair was a ghost town.
When there, I was always off in the transportation and structures stuff, which is basically its own world where this is just another AASHTO meeting, just with a bunch of fluffy fru-fru bullshit floating nearby.
We grudgingly accept that some of the planning track stuff is rigorous but basically everything else that's been bolted on is just grant grifting or graduate students who ran up a brief presentation so they could get approval to go and job-hunt.
At some point I'm hoping to get back more to see some folks than because I need to be there.
That’s how I’d interpret the phrase tbh... Most people who are injured in a street are probably injured by a car not a criminal. If you told me “X was killed in the street” I’d assume it was a bicyclist or pedestrian hit by a car.
That was where my mind went immediately, and then I chuckled when I realized what he actually meant and how clearly my misinterpretation supported the point he was making.
Regardless of if you think its a problem or if the article is missing the point. I've always found that the claims that we are in an "unprecedented" or "extraordinary" era of corporate power weird. The British East India company controlled a subcontinent, had a standing army three times the size of the British army and had so many tendrils in parliament defanging it was a major drive of the various reform acts; Standard Oil is a byword for a corporation controlling an entire critical facet of society; several banks in 2008 were deemed to big to fail and bailed out; the EPA was founded because corporations had been making the air, water and land itself toxic; and so on. Are we really to believe that corporations in the 2020s have more power than that?
Really? I seem to recall someone pointing out that corporations used to have the power to make rivers catch fire and the air unbreathable, but they lost that power.
I think this is the heart of why I hate so many of these arguments. They only work if you explicitly ignore all of the actual progress we have made over the years. It is mind boggling.
This is where this gets a little complicated. There isn't a single variable of corporate power. Corporations didn't have the power to pay their CEOs arbitrary pay packages. Boards were expected to be somewhat independent. There wasn't private equity in the sense there is now. There was intense pressure on corporations to be socially responsible and work with government in specific ways, as opposed to the neoliberal Friedmanesque pursuit of shareholder value at all costs. So corporations were constrained, in a way that they aren't now. They didn't have freedom of action. For example, there was no way in that time period that someone like Elon Musk would have had control over military comms like he does with Starlink now. That was the whole point of countervailing power as developed by Galbraith.
I think this is a much more useful way to talk - talk about particular kinds of corporate power for particular corporations, rather than just “corporate power”. I happen to think that it’s less bad to have corporations that give their CEOs big pay packages than to have corporations that set rivers on fire. A generic “attack corporate power” agenda doesn’t say which power of which corporations they care about. Matt is wrong to say there is nothing measurable here, but he’s right to say that the people going on about this don’t say what it is they care about.
I've always kind of looked at environmentalism as something that happens as a result of economic growth. Economic growth means that people can afford to shift priorities toward care for the environment.
Are you worried that you are being deliberately obtuse? A phenomenon we're seeing across the developed world outside the US tech sector is increasing market concentration, lower rates of firm entry and exit, declining worker mobility, and (sometimes) higher gross margins. This seems to be the main culprit in slowed or stagnant income growth outside the United States. And it also seems like a logical construct for what market power is.
I get that these people are annoying and economically illiterate, but they are not wrong that in many countries and markets local businesses have been wiped out and markets concentrated into two or three national chains.
“I get that these people are annoying and economically illiterate, but they are not wrong that in many countries and markets local businesses have been wiped out and markets concentrated into two or three national chains.”
Sure, but there is not a straight line between that kind of consolidation and higher prices for consumers (the usual focus of antitrust policy), or a government that is more beholden to monied interests, or lower economic growth. A bunch of small businesses would exist if not for the rise of Amazon and Costco and Walmart over the last 30 years. Would anyone actually be better off, though? This crowd starts with the answer that big is bad and backfills the rationale or metric to support that perspective.
The Atlantic did a good piece on this back in December 2024 examining studies that looked at the longterm effects on communities when Walmart entered. In the one study they did a good job of matching communities where Walmart had succeeded in establishing a store and communities where they had tried and failed. The outcomes resulted in lower incomes in the communities where the Walmart opened vs. where they did not, and it was worse for low income wage earners. Link below.
I’m not equipped to parse and critique this study from European social scientists. It is certainly better to have such support for one’s views than to not have such support. But I do not give it very much weight. Science has taken millennia to decide if eggs are good for us, and they still don’t know.
I would just pose a question: would your views, or would the Big Is Bad crew’s views, change one iota if these same authors, with the same methods, found that Walmart increased household income by 1%? Or would they ignore it, reject it, and/or come up with some other basis for their views? My view is that these people *feel* Walmart is bad much more than they *think* or *know* Walmart is bad.
What are you then ‘equipped to parse and critique’ and how do you make rationale decisions? For the record the article references two studies not one which makes me doubt you even read it. I gave you studies that looked at your question as to whether or not anyone is better off without the rise of these conglomerates replacing local businesses in the community. But clearly you were never interested in an answer to the question because when presented with studies and data your critical facilities couldn’t handle them.
Clearly you only run on feelings and vibes and not evidence as you admit in the last sentence where you engage in the exact same sins you accuse those of’Big is Bad’ of committing. But how could you do otherwise when you’ve admitted you can’t evaluate evidence.
If you don’t like an outcome from a study, by all means critique the methodology which demonstrates you can engage with the data, But if you aren’t willing to do that, then don’t ask questions for which there might be empirical studies and throw out red herrings about eggs — I could comment on the nutritional value of eggs and risk/benefit of consumption based of their composition, but what would be the point since you added that for rhetorical flourish and not as a serious comment about the scientific basis of eating or not eating eggs.
That seems AI generated towards the end there. I know there are two studies but I only started digging into the first. My main point is that can find an academic willing to reach any anti-business conclusion you’d like. It doesn’t actually establish their findings. Replication crisis, etc.
I have never used AI to write for me. If that was your point then why throw in a red herring and have the vapors on how you couldn’t possibly evaluate the studies. The studies are not anti-business either. Evaluating the outcomes of different business models on communities is not anti-business unless you are afraid of the data — or begs the question who do you believe qualifies as *business*. These studies are merely looking at longterm outcomes of different business models/types. If Mamdani ever gets his government stores off the ground, then we should get data that could be used for comparisons of the private vs. public sector and the effects on communities, but the only anti-business bias here is your own.
This result makes intuitive sense. I’m now remembering one of the few SB commentators I’ve blocked (Ken MIA) was in response to his bad faith arguing on this point.
When a Walmart comes to a small community it removes the profit from the community, which would be fine if the amount it lowered goods by was greater, or if it increased demand for other community businesses, but I don’t think that’s the case.
Walmart isn’t hiring local accountants and lawyers, and they probably aren’t even hiring local plumbers or electricians.
People who aren’t from small towns dont appreciate that the efficiency and lower prices Walmart brings arent as valuable to the community as less efficient businesses recycling money through the community.
Correct the studies point out that prices do go down, but get cancelled out by other effects — mostly on local producers who can’t compete on price given Walmart’s scale and who may go out of business or as you suggest reduce economic activity.
I am always hesitant to say something is intuitive without evidence to back it up — common sense regulation is another — as there are plenty of studies which don’t end up supporting what we think intuitive. Studies such as these can and should be used by communities — particularly small and rural ones — to assess what businesses they want and how to determine what policy decisions work best for them.
It’s possible that population aging is the bigger driver of lower rates of firm entry/exit, since older people are probably less likely to join or found a startup.
I can’t remember it off the dome, but I think the average age of startup founders is surprisingly high. This could just be because the young ones leading the charge bring in more experienced people early on, but still worth checking
The work of the Australian Productivity Commission in this space is really interesting, and much more epistemically humble than the neo-Brandeisians! They point out that these phenomena seem to be related and are definitely upstream of declining productivity growth.
But they also say that it's unclear which trend is causal (e.g. lower firm entry leading to increased concentration vs higher concentration blocking firm entry) or if it's all being caused by something else. As you say Tyler Cowan et al. are pushing slowing population growth and population aging as a cause for a more risk averse and less dynamic economy. We need more work in this space!
Google search, perhaps the most impenetrable corporate moat in human history, was thoroughly upended by OpenAI (by comparison an Infinitesimally small startup). I'm not convinced that the US tech sector is becoming too sclerotic due to concentration.
I more meant outside the US tech sector, and in smaller markets in particular.
I'm in a smaller city on the periphery of the American Empire. We used to have our own banks, stock exchange, news media, insurance companies, major grocery chains and manufacturing businesses.
Now every market is nationalised with consumer goods and services provided by a small group of national chains headquartered on the other side of the country. Manufacturing has all gone offshore. And all our tech, high finance and media is imported from the US. We're left as a mining and energy hub, and if you don't want to be in that game you've got to leave.
The boring David Ricardo comparative advantage argument is this makes everyone richer, but it also means that my city lacks a sense of independence or uniqueness. Because we're consuming the same services and media exported from the superstar cities as the rest of the world.
Matt admits that he is a very literal person, and this article is an example of it. But being very literal can be useful at times, and he provides that use here, while alongside observations like yours.
The necessity and scope of lobbyists is just taken as a given.
That is not actually a base state of existence.
In the 2024 cycle for example, pharma companies donated 16 million dollars to Political action committees.
This entire post entirely ignores the aspects of money talks and the size of lobbying.
We never get any reference to Citizens United.
(I edited this to change "existence" to "necessity and scope." A lot of my responses seemed to think I wanted to ban lobbying which isn't what I meant, that is both impractical and against free speech. My point, which I clarified in later responses, is that the US is structured in such a way to privilege outside lobbying, from self interested industry "corporations" in the context of the post to "the Groups." and that it doesn't have to be this way.)
I would like a group of us to band together and create a documentary critical of JD Vance. We'd have to raise some money, hire some talented creative artists, maybe even get a famous actor to do voice-overs. It will be terrific. We want to time the release of this documentary to have the most impact -- say, 2 months before the next election. We'll sell tickets in theaters and also sell the rights to Netflix.
What I just described was illegal and could have resulted in our prosecution prior to Citizens United.
I would like to propose an exception to the First Amendment that outlaws any blithe, sloppy criticism of Citizens United by anyone who hasn't tried to think though how they would design and administer a system where some corporations aren't allowed to engage in political speech, while others, such as those that make documentaries, are.
I'm pretty sure that was a joke . . . . (The "I would simply" opening is a routine formulation of Matt's, particularly on Twitter, when making sarcastic/joking comments about policy.)
The instant I saw the headline of this article, I was all ready to post that any group of people that organize to spend on politicking is highly likely to form a corporation to do it, and a non-profit one at that--just like the group Citizens United is. It figures that someone would beat me to it, as usual. Easily one of the most misunderstood usages of the word corporation out there.
I don't think that is true, at least not according to my wikipedia-level understanding of Citizens United. They filed a complaint about Fahrenheit 9/11, claiming it violated McCain-Feingold, but since that law prohibited electioneering communications via advertisements and Fahrenheit 9/11 was a movie produced by a bone fide production company, it did not violate the law.
Citizens United later set themselves up as a bone fide production company and made some (really bad) documentaries, but then ran afoul of the law because of their advertisements promoting their documentaries which, if memory serves, really were just thinly-veiled political ads, like "Here are all the terrible things Hillary Clinton will do if elected... and also you should see our documentary". My recollection was that they were more-or-less trying to use the "bone fide production company" ruling as a workaround to run political ads with outside money.
Also McCain-Finegold was enforced by civil monetary penalties imposed by the FEC, so I'm not sure "prosecution" is a fair characterization.
The two of you are basically describing the same thing, and it's bad. No government should ever be able to decide what is "a bona fide production company". Especially considering who would be in charge of deciding that right now!
I see what you're saying and I fully agree with the sentiment, especially vis-a-vis Brendan Carr. Though I would also point to the perversion of civil rights laws under the current fascist regime and suggest that it doesn't negate their necessity or undo their positive historical impact.
But I don't think that is what Citizens United was about. The FEC didn't say that Fahrenheit 9/11 was acceptable because it was produced by a bone fide production company.
Citizens United argued that Fahrenheit 9/11 was an advertisement even if Michael Moore called it a documentary and McCain-Finegold prohibited electioneering communications by way of advertisements paid for by incorporated entities. But the FEC reasoned that the claim that it was a documentary was substantiated by the fact that it was a movie produced (which here means paid for) by a production company.
Citizens United then went and became a production company and made documentaries, which the FEC had no problem with. It was, and again, this is just my recollection, the fact that they were clearly using the ability to take out ads to promote their documentary in bad faith as a workaround to the law that got them in trouble.
I think that pre or post Citizens United you could absolutely make a documentary about a politician and release within 60 days of an election and that you could use professional actors and promote the movie with advertisements. Where you would run into trouble pre-Citizens United is if your ads also promoted or impugned that politician directly. Now you can just get a bunch of rich donors to throw money at a 501(C) and open up a firehose of robocalls, text messages, TV spots, books, documentaries, social media content, etc.
Anyway, I'm just arguing the narrow point that I think claiming McCain-Finegold barred people from making documentaries about politicians and releasing them close to elections is factually wrong. I don't think characterizing the Citizens United decision as righting some horrible wrong that amounted to censoring political speech and violating the First Amendment is correct either. I think that decision re-interpreted the First Amendment by claiming that (apropos of today's post) huge corporations were just "associations of people" and therefore enjoy the same protections to their speech. I also think it is part of a broader right-wing project to give more power to (in the spirit of the comments section) capitalists by conflating the spending of money with the exercise of free speech.
Just to be clear the lawyers arguing for those campaign finance rules in front of the Supreme court literally said they could use those laws to prevent books from getting published that ran afoul of the law.
Let me understand the argument. Are you saying that the US didn't have a functioning democracy before the advent of Citizens United? Because there was a long history of competitive elections before that. When did we enter the period of darkness that CU let us escape from?
I made no such argument. Only that the law being challenged was an infringement on the First Amendment. The lack of a "functioning democracy" isn't needed as proof of government overreach.
We infringe the First Amendment all the time in pursuit of national goals. What specifically was the harm here that CU saved us from, and why was it felt necessary to overturn it, beyond misogynistic animus to the Clintons, which was definitely there.
What would a world where lobbying wasn’t a thing look like? If there was some proposed legislation on some highly technical or specific matter, would the hope be that our octogenarian legislatures would just happen to know all relevant details?
There used to be a thing called the Office of Technology Assessment, its job was to research and brief congress people on specific technical issues.
It was killed in 1995 by the Republican Congress because it was really bad for American business interests for congress people to have an alternative, neutral, source of information.
And the killing was wildly successful!
30 years later, a smart, rational person such as yourself can apparently see lobbying as the only effective means of informing technical legislation.
The basic logic, touted on this blog, that says it's cheaper and better for cities to have their own civil engineers and associated professionals on staff, rather than relying on outside consultants, applies to legislators.
Congress people should have a lot more money (from the public purse) to hire staff to research these topics.
Without said moneys or government research institutions, these congress people are reliant on lobbyists.
your answer does not answer his question - there is nothing that precludes State Capacity (having internal expertise) from having lobbying. Lobbying exists in EU countries which are not lacking in that internal capacity in general.
The fact many countries in Europe have that internal capacity and the US doesn't tilts the playing field much more on our side of the Atlantic.
It is a feature that suggests much more corporate power in the US, (Similar features include the collective sectoral bargaining that some European countries have)
I should have rephrased my first post. I wrote "existence," but I feel like what I should have written was "necessity." Lobbyists exist in European countries and that is fine. I am not thinking to ban the activity.
But, to go back to my example, imagine a city, city A, that was, by law, forbidden from having in house civil engineers.
Imagine people have lived in city A for so long that when they hear that another city, City B, DOESN'T rely on outside consultants for civil engineering, that they are absolutely flabbergasted! City B bans outside consultants!
Except it doesn't, it just structures their system so that they aren't RELIANT on outside consultants.
"Europe" is a big place. Drop Americans in Zagreb, Croatia... maybe not. Drop them in Basel, Switzerland... I think they'd be quite happy about it.
The implicit argument you're making seems to be that "Outsized influence of lobbyists in the US relative to Europe ---> Better economic indicators in the US relative to Europe." That seems like a big claim.
I think this runs into issues with our federalized system though. I have to work with providing impact assessments to the state government on proposed legislation (sometimes, minor part of my job), and it really isn't reasonable to expect every state government to have staff on hand that can evaluate the impact to every impacted business for every piece of legislation. There are very seemingly minor pieces of text in every bill that have significant effects on the difficulty of implementation for the affected businesses or groups; lobbying allows the affected people weigh in and try to make sure the bills don't have unintended consequences that a set of 50 different analysis offices could not possibly have caught.
I think it'd be great if we had that office back, but it doesn't eliminate the need for lobbying to ensure we don't end up with wacky legislation that kills our economy.
You do realize that US states are the equivalent of countries in terms of money and size?
Like California and the country of Sweden have roughly the same budget.
My point wasn't about eliminating lobbying, (I went back and edited the original comment), it was about how the US has set up the systems and purposefully destroyed government capacity so as to make lobbying a NECESSITY.
That was a choice.
That was legislators saying "State capacity should be slashed to privilege Corporate power"
They weren't secret about this goal when they killed the Congressional Technology Office.
You'd think Matthew Yglesias, who in many respects is a great proponent of "state capacity liberalism" would know this.
In 2024, $9.5 billion was spent in congressional races, and the presidential race was $5.3 billion. I'm kind of amazed *only* $16 million (~0.1%) was spent by pharma.
If their guy wins and grants them policy that yield far more than $16 million then it was a smart investment. There's no way that pharma could provide the money that by itself would elect all their favorite candidates but if they in collaboration with other corporate interests tip the balance and then each gets its reward from the winners, then it was a very good strategy.
My understanding is that corporate returns from political decisions (like the OBBA) far exceed their contributions, so I grant you that it is a good question why political campaigns as a whole don't cost ten times as much, given the returns potentially at stake. But I guess there's just a limit to how much money can be spent in a campaign.
That number is only PAC spending. It's from here. I was trying to find the total number broken down by industry, but they only did that for the PAC spending.
What you often see as the "corporations giving money to candidates" is "people who donated money to a campaign and listed a pharma company as their employer."
And the media is extremely lazy about just accepting this.
Agreed. think anyone interested in the case really ought to read the oral arguments. The government went in and argued that the sections of McCain-Feingold at issue could have been used to suppress books. I also don't think people fully understand the facts. John alludes to them above but they go back even further. Citizens United had challenged distribution of Fahrenheit 9/11 as electioneering. Fahrenheit 9/11 ended up being permitted as bona fide commercial activity while some conservative movie they made at the time ended up being restricted. They then spent the next 7 or 8 years making movies to establish themselves as bona fide commercial film makers, like Michael Moore, and ended up restricted again on Hilary: The Movie, which is why they sued. It's very much a case about a form of prior restraint. I don't understand how anyone thinks it could have gone any other way.
There is a fair criticism on strict procedural matters that the majority answered more than they needed to to resolve the case at hand when they set it for reargument. But the broader question was going to get challenged very soon anyway.
Yea I've heard that criticism as well, and maybe so maybe so. I kind of think the facts were sufficiently before the court that it was hard not to deal with the core issue of the FEC making judgment calls about content (or really who created the content) but ymmv as to exactly where the court should have drawn the line on how much of the statute was unconstitutional.
In any case it's worth remembering that portions of McCain-Feingold survived, including on direct contributions and the 'I'm so and so and I support this ad.' People seem to think it legalized big businesses handing politicians suitcases full of cash, which it very much didn't.
Also, the disclosure requirements were upheld, with Thomas being the only justice who would have struck them down.
I really hope that I'll get to read the papers from John Paul Stevens on all the campaign finance cases of the aught, because he was always extremely critical of any argument that anything regarding this issue could be unconstitutional. I've always suspected that his stridence influenced other justices away from showing any nuance in the cases.
This goes all the way back to the originating case of Buckley v. Valeo, which he didn't officially participate in but had just arrived on the Court, and he made it clear that he would have firmly joined Byron White in holding that any regulation was constitutional. Interestingly, he was on the opposite of who he replaced in William O. Douglas.
For me, I always thought that Buckley v. Valeo got it right all along in drawing a bright line between contributions and expenditures. And as it would be, we're coming up on the 50 year anniversary of that ruling--the Volokh Conspiracy has been doing a symposium on it this week.
"The previous state of affairs was bad" is not incompatible with "the current state of affairs is also bad". I'll cheerfully concede the previous state of affairs was untenable, but I'd argue the current status quo is in need of further adjustment.
I just mean "pull strings" as in receive favors and kickbacks.
(I just realized that the etymology is from puppets. I've only really heard it in the context of an uncle getting his deadbeat nephew an entry level job at the uncle's company.)
But the strings go both ways, and the more autocratic the leader, the harder he can pull on his end of the string. Consider the relationships between oligarchs and president in Russia.
I take MY’s point that critics of “corporate power” should be specific about what they mean and how they measure what they are talking about.
With that being said I don’t think MY steel-manned these critics of “corporate power” loosely defined. I don’t think that they are primarily concerned with aesthetic issues of “corporate-ness”, or that they necessarily are indifferent about the role of corporations in the economy.
While there may be some of that, there could also be legitimate concerns over anti competitive behavior. Or practices that harm consumers. Or undo corporate invoice on legislation. Or environmental concerns. Or labor concerns.
Aside from the big, obvious thing you ignored (Citizens United and money in politics), the frustration I see among my friends of this persuasion is that large companies can flout the law.
Monetary damages for flagrant violations tend to be less than the profit from those violations. Class action suit payments come out to tens of dollars per individual impacted. It's incredibly rare for board-level individuals for large companies to go to prison for what a company does. Meanwhile mom-and-pop businesses are routinely closed entirely for code violations.
Are there plausible justifications for some of this? Sure. But it's tough to argue that it isn't an immense form of power.
There’s this idea called “efficient breach” that sometimes it’s good to violate a contract if the benefit of doing so is greater than the other side’s damages—the same ought to apply to regulations. Monetary damages should be set equal to the actual damages caused and if companies violate and pay that’s efficient breach.
Class action suit payments are that low because the plaintiffs’ lawyers take huge cuts, and most class actions are ridiculous (e.g. the claim in the Concepcion case that led to the Supreme Court upholding arbitration agreements was that the plaintiffs had to pay sales tax on free phones they received). It would be better to hire a lot more regulators and put them in charge of requiring changes instead of having class action litigation by greedy plaintiffs’ lawyers.
I don’t think it’s a good idea to put employees in prison for legal violations by their company, short of things like sending a hitman to kill another company’s CEO or something. The law that applies to business can be very broad and vague and sort of relies on prosecutorial discretion to decide what to punish, and there are even situations where laws are contradictory and you can’t comply with all of them.
I object to equating legal regulations with general contractual obligations. If efficient breach makes sense for something we actually don't want companies to do, that's an indictment on the regulations. If someone commits robbery, they don't get to skip punishment by returning what they stole; why on earth would we structure corporate law that way?
I agree that class action suits are a really inefficient way to handle these types of things, and better regulatory structure would be much better. But given that it'll take immense work to get the civil service back where it was pre-Trump, I'm not holding my breath.
If I understand your last paragraph, the argument is "corporate law is very complicated therefore we should be leery of enforcing it". Which seems very similar to saying "tax laws as applied to very wealthy people are complex and therefore we either shouldn't audit them or should give them the benefit of the doubt when we do". Or possibly "we've made an unholy mess of immigration law therefore it shouldn't be enforced". In all these cases the solution is obviously "write better laws".
That said, I'm not suggesting employees go to jail for the equivalent of speeding tickets; I'm suggesting that employees go to jail for the equivalent of grand larceny.
I can easily measure corporate power in my own life: it’s how often my boss can tell me what to do, and what happens to me if I stop listening.
One can also measure how quickly a person becomes broke, cold, or homeless after parting ways with their employer. That is the relevant metric. A boss’s warts are far more tolerable if being fired doesn’t mean privation.
On this view, the best proxy for “corporate power” is its inverse: how well the state protects people when they are unemployed. Where exit is cheap, corporate power is weak. Where exit is catastrophic, corporate power is strong.
I like the sound of that at first, but surely there are alternatives to “your boss” and “government protection?” David, where do you put “go work for myself” or “go work for a competitor” in your equation? Does that just circle us right back to “make rules to protect competition and market entry” with the government a player but not the dominant force?
By that measure corporate power would decrease if people had more liquid savings? That makes sense. It's like executive compensation - if someone is 45 and has made enough money to decamp to a golf course in Naples permanently then they can demand a lot more money.
The issue with liquid savings is that it’s not scalable. You can’t have a society where everyone lives on savings and no one works (or people work only for fun).
Liquid savings doesn't mean being independently wealthy, it might mean a 6 month emergency fund. It's an amount of money such that a layoff or being fired doesn't result in immediate destitution and a desperation to take the first job available.
security is roughly a function of the natural log of one’s wealth. ergo, making petit bourgeois wealth (or its welfare state equivalent) universal maximizes security
I believe that's below the natural rate of unemployment. So then you would get more immigrants and those jobs would get filled and that rate of unemployment would go up.
Despite its name the natural rate of unemployment is not a law of nature. As estimated by the CBO it was as high as 6.3% in the late 70s; they now put it at no greater than 4.5%. Given how inflation plunged in 2023-24 without a surge of unemployment, that number is probably far too high.
Would 2.5% unemployment be super inflationary? Maybe. Probably? But lower unemployment would be great for working people and a steady inflation rate of 3 or even 4% would not be the end of the world.
Well, you can insulate yourself somewhat with marketable skills and an emergency fund. But the whole thesis of progressive taxation is that people should not have excess discretionary income to save, it’s impossible to buy health insurance cost-effectively as an individual, and the Medicaid asset limit is like $2,000.
If progressives had their way there’d be universal healthcare. If conservatives had their way then the market price of an office visit would probably be too much for an indigent but within the realm of reason for a recently unemployed professional. Market failure + stingy welfare state is a creature of the slow boring of hard boards.
I’m as unsympathetic to the anti-monopoly lunatics as the next guy, but I do think it’s at least *possible* to imagine what they might be talking about. (And why it would be hard to measure in the cross-section/time series.)
I think it’s something like
Bigness + (possibly) control of a salient technology => Political bargaining power.
So, e.g., Meta’s massive resources allow it to influence politics. Because Instagram is so salient in our lives, this is particularly detrimental to the People (e.g. because we watch more slop videos). If Meta were smaller, the People would be able to fight back against slop via the political system.
This is kind of conspiratorial, but does it have any particular implications for something we can measure in Oregon vs Michigan? It’s not about market shares, markups, or anything like that. It’s about a political counter factual.
To take things to the extreme: imagine an AI company raises a robot army that rivals the US military. Clearly this is power, but what would the measurable outcome be? I have no idea. AI corp would have more political bargaining power, but its power would likely be international rather than local.
But didn’t Silicon Valley lose in 2016, win in 2020, and (maybe) split in 2024, all by a sliver? It seems that Silicon Valley has less electoral power than RFK jr.
Yeah, I agree. I don’t think that corporate power is actually a big problem right now. (It seems like Trump has leverage over corporations rather than the opposite.)
But my point was that “is corporate power higher in Oregon or Michigan?” is not really an insightful gotcha, given what these anti-monopoly people have in mind.
The East India Company was always at the mercy of a state, though. Just not any state in India. Parliament had no trouble shutting it down when they decided to shut it down.
"no trouble" is doing a lot of work here. This was a long-standing political argument for a long time, and heavily influenced by the Indian Mutiny and the failure of the East India Company to keep things going in a stable way.
Sure there were political arguments, but no one in the EIC suggested, "We rule over in India! Let's move there with our families and continue to run the nation as its government and Parliament can go hang."
Power is multifaceted and not subject to a single measure like emissions. But for some clear examples of corporate power you can just look to how Musk bought Twitter and completely “vibe-shifted” the whole world by doing so. It is true that managers of publicly traded companies under a fiduciary duty to maximize investor gains may be limited in their power (which is why Twitter’s owners were basically legally required to sell to Musk when he offered so much above market value), but it seems undeniable that an ultra-rich person in charge of at least certain types of corporations could have a lot of power.
It seems like there are clear measures to me. The amount of money spent by corporations on lobbying and Super PACs. Market consolidation. Rates of anti-competitive or anti-consumer behavior.
Then there’s hazier but still important stuff, like Amazon’s influence on consumer markets or Meta’s influence on the media.
People talk about Teachout being anti-free enterprise. I don't think that's accurate in the sense that they want the government to run everything.
At its most fundamental there are kids in college who want to help people. It's 12 degrees today and America's natural gas drillers and petroleum geologists and pipeline engineers are keeping millions of Americans from freezing to death. And they earn a good living doing it.
But for many kids that's not the right kind of helping people - it's not an housing or arts non-profit. What someone like Teachout wants is a world run by the types of people who think of helping people in those terms. Not those "dirty" uncaring guys keeping us all from freezing to death.
Your comment here makes me think of possibly my favorite single passage from Bastiat's writing, which is sadly too long to post here. Go to page 44 of the PDF here (page 3 of the text) starting from, "Let us take a man belonging to a modest class in society," and read to page 47 of the PDF (page 6 of the text), ending with the line, "In truth, could all this have happened . . . .": https://files.libertyfund.org/files/79/0187_Bk.pdf
Re: measuring stuff it turns out "how do you measure market power" can be the subject of a whole class which at Yale is numbered ECON 3385. Right now we are on week 3 and we are still working out how to estimate demand in multi-product markets.
Re: the broader point of the post, I agree that "corporate power" can be a vague term, but I think you could've engaged more with some of the evidence that market power has been increasing. For example here is a CEA brief from 2016 that we had to read for the first meeting of antitrust policy class: https://obamawhitehouse.archives.gov/sites/default/files/page/files/20160414_cea_competition_issue_brief.pdf. It finds that firm entry rates are down, more and larger mergers are happening, etc etc. The brief itself notes that this is not slam-dunk evidence that concentration is for sure increasing across the economy, but it is suggestive that something may be happening.
I was going to make a whole comment about how I guess I don’t need to teach my Industrial Organization class this semester if this is something we can’t measure and shouldn’t talk about so I’m glad you did instead. Market power is real and measurable, regulation is real, the growth of trusts in the Gilded Age was real and had real consequences. And the rent seeking behavior of corporations increases with market power. This isn’t very complicated stuff.
I agree that it’s real, I think the problem comes when people use their corporate power goggles to look at every policy problem in America
True of so many googles out there.
Sure, but that is NOT the claim MY is making here.
I agree but I think Matt is on to
something when it comes to the most prominent spokespeople for the “corporate power” crowd…I should state up front, a crowd I’m clearly more sympathetic to than Matt (I brought up in another comment, a very good example is FanDuel, DraftKings and casinos using their lobbying power to make gambling way to accessible to average Americans).
But I think a good example of a prominent “corporate power” spokesperson is Zephyr Teachout. She was on a podcast with Ezra Klein having a debate about why housing costs are higher in California than Texas. The only answer she kept giving over and over again was “Corporate Power”. Ezra tried, really tried, to get her to unpack what she meant by this and…she basically wouldn’t do it. Honestly it came across as pathological to me almost as though she couldn’t conceive of a reason why housing costs in California are higher than Texas due to something other than “Corporate Power” (which is kind of nuts when considering the political of CA vs TX). It honestly made me tilt my head back in frustration especially because Ezra clearly has some sympathy for this explanation of various policy failures. He just could not get through to her to a) explain her reasoning more and b) at least try to conceive of the idea there may be another reason why a policy failure is happening other then “corporate power”
I think maybe two things could be said. One, the left “Corporate Power” crowd maybe just need better communicators. Two, if you want to craft good left of center public policy, assuming “Corporate Power” is some skeleton key to unlocking all policy problems is going to likely lead to some bad policy if that’s your driving belief.
In the end it is generally clear that people like Teachout are essentially anti-free enterprise, but are dressing up that in a vaguer langauge
This is the correct thing.
They should just be called out for what they are: cowards unwilling to just say directly why they believe.
Matt touches on many deep subjects in this piece. Colin’s focus here is helpful. As Matt notes, (“the term works fine as a shibboleth. If a writer writes about taking on corporate power, that signals something about what they believe”) shibboleths — labels for group membership — serve a function. As Colin (and Ezra) observe, Teachout and (and Warren and Jayapal and millions they represent) insist that the label has analytical power and trenchancy. Matt does a service by showing that it does not.
Wealth as we have enjoyed it since the invention of railroads, industrial fertilizer, automobiles, antibiotics, birth control, and on and on, is realized by creating organizations of enormous complexity, scale, and cross-polity span. Since Marx, the left has decried the resulting alienation of labor. Since the Luddites, the petit bourgeois / local bullies have decried the resulting disempowerment of local elites. When we train today’s elites in the reading of laws and Zora Neale Thurston novels without also training them to build organizations that build the machinery of human prosperity, we leave untouched the natural human tendency to frame the world in terms of protagonists and antagonists. The world of human flourishing — today’s world — is a world of systems and statistics and management. Most people hate those structures. It is a great failing of Matt’s audience the liberal professional-managerial elite that we continue to recreate ourselves around this pathological, willful ignorance.
Alienation of labor is kind of at a breaking point, though. It’s a huge reason for *gestures wildly at everything*
And that’s not because everyone’s been reading Zora Neale Hurston novels, it’s because most corporate work environments suck and that’s most of what’s available. Dumb metrics, having to kiss ass, most of it customer service rather than producing anything tangible, do more with less, online training modules, etc. With the ever-present threat of layoffs and the joys of AI-moderated job applications if your number gets called.
A lot of people who would have been fine, basically, with the way things were 100 years ago - when admittedly there were still corporations - aren’t cut out for the modern work environment. And because of wage compression, even with higher real wages you feel like you’re running in place. It *is* alienating. That + the internet = mob with inchoate rage burning down the system.
People want systems that are more human, suboptimal as they may be. People want to own things, things more tangible than shares in an index fund.
" it’s because most corporate work environments suck"
Is it only corporate jobs that suck? Most jobs aren't that great. That's why they pay you. Somebody wants something done they don't want to do themselves, or can't do themselves. And so they pay you to do it.
You don't need to pay people to do stuff they already want to do, because they are already doing it.
"A lot of people who would have been fine, basically, with the way things were 100 years ago"
No they weren't. Things 100 years ago sucked WAY WAY WAY more than they do now.
Hours were worse, conditions were harder, and worker protections were basically nonexistent.
Further, I don't think wage compression is the big problem, the big problem is regulatory created scarcity of some of the most important things in life has made things like housing unaffordable.
I think you’re right about the artificial scarcity and the worse conditions in the past. But 100 years ago people weren’t burning down the country and its institutions; there was generally faith in the system, even after the Depression. One reason is the internet making everyone crazy, and another reason is the Baumol effect/anti-abundance rules. But still another reason is surely labor alienation! It’s vibes, but that makes it no less real!
Yeah, but none of those things are inherent functions of something being "corporate." I've faced worse versions of dumb metrics, required ass kissing, bad training, shitty management, and powerlessness working for small family or solo practitioner businesses than I have working for startups.
Okay, but a corollary to the general observation that 90 percent of everything is crap is that 90 percent of all politics is psychobabble. There is a reason I don't actually spend very much time in my private life listening to the campaign speeches of Democratic politicians, even Democratic politicians I broadly agree with on the issues or think are really smart idea people, and it's that the vast majority of their public-facing output is psychobabble. It has always been so and likely always will be so; there is no imagined past golden age of voters weighing up complex public policy before deciding how to cast their votes. The Anti-Psychobabble Party would, if formed, be roughly as successful and long-lived as the Anti-Masonic Party.
I don't know, I think those guys must've done something right: I can't think of a single politician in my lifetime who was in a masonic cabal!
How quickly we forget about the brouhaha with GWB and Skull & Bones!
Absence of evidence is not evidence of absence.
Apparently the UK metro police are a hotbed of Masonry...
I saw that interview and I was appalled. I had heard her name before, but never seen her before. She is clearly incapable of rational thought. How did she get a prominent position at a law school? How did she even make it through law school? The interview is filled with vacuous blather like this:
Ezra: How sould we try to deal with <issue>?
Teachout: Well I believe in the future. If we would just harness the power of the future, we could do it!
She did not make a single coherent point in an hour and a half.
Do you find that the usual anti-corporate power suspects use this data frequently when making their case? I certainly haven't noticed it, but their behaviour online is so poor that I have to admit I don't go looking for their more substantive stuff.
They are too lazy to bother knowing even basic facts before opining.
The issue is not that IO doesn’t have good answers about measuring corporate power, it’s that the people in charge of regulators ignore the field when given the answers.
It’s a political economy issue.
Different subject than MY in end, although adjacent
Yes and no. My IO class will look at models of competition and measures of competition and the various policies we’ve tried to increase competition and prosecute collusion. That’s definitely a different topic. But one thing I emphasize in my classes is that the paradox of capitalism is that competition is the magic power that gives us all the good things that come from capitalism (innovation, lower prices, greater efficiency) but firms absolutely hate competition and will do whatever they can to reduce it. When that takes the form of product or process innovation, that’s great. But when it takes the form of anti-competitive practices and rent seeking, then that’s when public policy needs to step in. The industries that people complain about tend to be those with less competition and higher profits. When those profits are used in a non-productive way to increase market power (lobbying, mergers, etc.), that’s the corporate power about which people complain.
It’s always going to be a balance because we don’t want the “ruinous competition” that drives companies out of business. Firms need to make profits. But we also don’t want firms with lots of market power to be able to protect that market power through non-productive activities. We need to always have firms nipping at their heals to try to capture some of those profits for themselves.
As I said. Adjacent subject.
The political discourse and vague political power insinuations that MY was largely focused on is adjacent to the companies as market operators subject.
Asserting simplistically that "[w]hen those profits are used in a non-productive way to increase market power ... that's the corporate power about which people complain" is
(a) the last part making an assertion that clearly does not actually fully align the way certain persons that MY is citing are using it -
(b) collapsing the various routes of political influence and frankly a gross over simplification of companies competing lobbying (of which e.g. incumbents promoting supposed protective regulations as they know it is a Barrier To Entry that de-facto reduces competition).
Certainly some people of specific academic backgrounds are using it in that fashion. But that is not clearly what the MY cases are (as in e.g. the vague assertions of Corporate Power by Teachout about housing costs).
There is certainly adjacency and there is certainly legitimate (as in empirically founded) company market power via non-market (regulation etc) means subject but MY is addressing very clearly a people using this slogan in quite different ways.
"But one thing I emphasize in my classes is that the paradox of capitalism is that competition is the magic power that gives us all the good things that come from capitalism (innovation, lower prices, greater efficiency) but firms absolutely hate competition and will do whatever they can to reduce it. When that takes the form of product or process innovation, that’s great. But when it takes the form of anti-competitive practices and rent seeking, then that’s when public policy needs to step in. "
This all seems right to me.
But the important addition to that is quite often the way that businesses do this is through the regulatory power of the state.
Something something HHI’s.
I was with you up until the last sentence. No, it's very complicated stuff!
This is interesting. I think "corporate power" is just pretty vague and covers several related concepts, but unfortunately a lot of the people bandying around the phrase, like Teachout, are just not clear enough thinkers to recognize this and tease them apart. I was mostly not thinking about market power, but about the influence large corporations and trade organizations have over policy.
Thoughts on the Albrecht paper that found positive correlation between change in business dynamism and markups?
“Market power is real and measurable”
How do you measure it?
Markups
That’s an extraodranarily simplistic answer. How, exactly, in any given market, can you discover the markups?
You estimate the demand curve based on data on prices and quantities, then you estimate the supply curve, then use economic theory (which bit of theory depends on the market structure) to back out the firm's marginal costs, then you can compare marginal costs to the prices they charge and that's how you get the markup. Like I said this is the subject of the class I am in.
“back out the firm's marginal costs”
How can you know a firm’s marginal costs?
Are you measuring US-only corporate markups? It gets kind of tricky when you start analyzing how much of our consumer goods are obviously not manufactured by US entities- presumably at declining profit margins, isn't involution & deflation the whole Chinese story?
I.e. I could imagine that markups are increasing for companies that are still left in the US (tech, finance, medicine, professional services)- but they're declining for basically anything made in a factory, which is increasingly not done here. You know?
Good points. Any greatest hits books or articles from your class to get us up to speed on the topic?
I use the Tremblay & Tremblay textbook in my class which isn’t too technical but not for a lay audience. There was a special issue in the Journal of Economic Perspectives in Summer 2019 that looks at markups and antitrust.
Much appreciated! Thanks for taking the time. Looking forward to digging into these and learning more.
Can you send me the link to the JEP issue?
https://www.aeaweb.org/issues/559
Markups are clearly the best measure of "market power" in the static sense--concentration is but a proxy (and often a very poor proxy).
But markups measure the difference between price and cost and cannot distinguish between markups increasing because costs are going down (good) and markups increasing because price is going up (bad). It is often the case that markups are extremely high in dynamic industries where costs are falling dramatically because of innovation. For that reason, it would be a mistake to focus our policy on industries/firms that currently enjoy high markups.
The alternative is to focus on markets with high concentration, which is generally how the American antitrust agencies operate (this concept--more than markups) is embedded in their merger guidelines. But, we must always remember that high concentration is a weak proxy for low competitiveness.
You beat me to it!
It is definitely a complex issue, especially when you move from thinking about static efficiency to dynamic efficiency. Microsoft clearly had lots of market power in office software in the 1990s but Google was coming to eat their lunch.
Yeah, there actually is a whole body of academic work in the space. Matt is right that his enemies are annoying and wrong about a lot of things. But he hasn’t actually taken the arguments of those working through these problems at all. It’s early for me, but it’s increasingly a blind spot for Matt to write posts about the people he doesn’t like and paint with too broad of a brush. It’s getting rote and a bit lazy.
He does it on issues where he's clearly just flying on vibes himself, so he picks the weakest opponents and flays their arguments, then hangs out the Bush-style Mission Accomplished sign and goes home.
I do think Stoller is an idiot, Teachout is worse, and Kahn is only marginally better, but pretending like the US isn't shot through with regionalized monopolies and oligopolies that either stem from rent-seeking and regulatory capture or enable downstream rent-seeking and regulatory capture, is just irritatingly myopic.
More centrists and moderates need to learn that being on social media can dull their intellectual tools. It's not just a risk for leftists and the far right.
Well in fairness to Matt he is engaging with well publicized arguments of the most prominent spokespeople of this movement and the arguments are pretty weak.
It's not just a risk within the political talking head sphere, either.
Social media make--uh what's the word--social media make big stupid.
I would give extra likes to this post if I could. As someone who’s done battle with these folks in professional forums, I could not agree more about how bad they are. But he’s he’s very happy to write about them rather than engage with a host of serious corporate issues that matter. It’s cheap and getting old.
Mission accomplished, indeed.
I think Matt partly likes stirring the pot and partly is using the strategy of putting out the wrong answer to get the right answer. I agree that there is a real topic to address there, but it’s interesting how approximately no one in the discourse is trying to apply real insights from research.
I think you're ascribing far too much strategy to what is actually him venting after a day sparring on Twitter.
And still recovering from the flu.
“…flays…”
I like the gazelle metaphor.
Related, Works in Progress had a good piece a few months back outlining a new metric to measure market competition: https://open.substack.com/pub/worksinprogress/p/how-to-measure-competition?r=1cj74&utm_medium=ios&shareImageVariant=overlay
“…look for other culprits. Those might be things like bank forbearance policies, under which struggling firms were kept alive for longer; low interest rates, which allowed companies to refinance debt rather than going broke; or housing policies preventing workers from moving from struggling parts of the country to relatively prosperous ones.”
Banks are heavily regulated. Interest rates somewhat less so, but are significantly affected by regulators. Housing policies are, quite obviously, government imposed.
As is often the case, nebulous ideas like “corporate power” and inadequate competition, adjudged by many to be market failures, are in fact government failures.
is market power the same as corporate power, though?
No, and I think the switch in verbiage achieves several goals for the people who advance the term:
-Permits them to lump in political/corruption type considerations with usual antitrust considerations
-Switches from "market," a neutral to positive word, to corporate, a word with a generally negative connotation
-Avoids technical arguments about whether the conditions in a given market are such that the formal academic concept of market power is applicable
-Is more consistent with their actual goal of anti-bigness rather than the promotion of consumer or worker welfare
Ya, I don't get this concept. "Market Power" in the sense described by Milan is a real thing, and it relates to what some of the folks decrying "corporate power" mean, but it's clearly not what most folks mean.
One way to tell this is that ... none of them are citing the numbers that Milan's learning about in ECON 3385!
Milan's reply reminds me of attempts to sane-wash the "Defund!" folks. Like, sure, there's a sane point one can make that's adjacent to the topic at hand. But that's just not what folks are talking about!
“Market power” has a specific meaning that can be measured (although it’s hard to do and the 2016 CEA brief is a *terrible* example of how to do it, even Jason Furman says so). “Market concentration” also has a specific meaning that can be measured, though the value of this measure is hotly debated (it’s a loose proxy for market power and can be useful when looking at a specific market but is totally meaningless when applied to the entire economy, where concentration in the thousands/millions of separate markets is increasing and decreasing all the time). “Corporate power,” like Matt says, has no meaning. It’s *always* a rhetorical sleight of hand. Lina Khan, Elizabeth Warren, and OMI/Revolving Door Project (funded by corporations like Oracle, Yelp, and Microsoft) know about these other more meaningful terms that can actually be measured and choose not to use them on purpose because they are deliberately trying to mislead because truth is counterproductive to their objectives.
I’d like to read a follow-up guest post on this
This is probably something I will pitch Jerusalem on sometime around end of May or early June after I've completed the two antitrust-related classes referenced in my original comment. (Now's as good a time as any to mention that starting February 2 I will be a fellow at The Argument.)
Congrats!
Congratulations! Looking forward to reading your work there.
Don’t know if you’re gonna get a post but if you’re interested … there’s a chapter in this book on Corporate Power and it’s considered the standard.
https://www.amazon.com/Corporate-Finance-4th-Pearson-Standalone/dp/013408327X
Thanks I'll give it a look post-grad
In the middle of the essay, I thought Matt was going for the distinction between, on the one hand, economic market power (both on the output side, driving up prices for consumers, and on the input side, driving down wages for workers), versus, on the other hand, political power. E.g. I've heard the critique that Lina Khan-style antitrust focuses, perhaps too much, on hostility to big corporations that are capable of wielding political power, even when the antitrust actions are unnecessary or unhelpful to consumers in a pure economic market power sense.
But for both of these definitions, "corporate power" tends to be greater in highly concentrated markets with a few giant businesses, and it seems obtuse to object that the small businesses in less-concentrated markets are also technically "corporations." They are, but being small and facing lots of competition, they don't have much power.
Strange that Matt went the "they're all corporations" route here.
Not to mention “corporate power” also means “the power to lay people off,” “the power to cut pay,” “the power to relocate and restructure,” “the power to buy and shut down a competing business,” etc. These are what people don’t like. Bigness isn’t so bad so long as people have close to total job security and the company is always hiring, at high and rising relative wages.
Laying people off, cutting pay etc. are related to market and political power. Market power on the labor inputs side, and political power in terms of getting regulations that don't protect workers from these things.
Is it? Small firms lay off workers all the time for reasons that have absolutely nothing to do with market power. It's also the case that small firms routinely use noncompete agreements (e.g., the solo proprietor hair salon that wants to avoid its workers poaching customers--you may not think that is a sufficient defense of the noncompete agreement, but it's 100% not an example of a firm exercising market power as a purchaser in a labor market).
Market power is only one type of power a corporation may have. There are other potential measures of economic power, like monopsony, gatekeeping, or financial power.
Then there is political power.
There are several measures of social, cultural, and status power. For example, Harvard and Yale are powerful not because of their market power, but because of their influence in elite production, especially SCOTUS Justices.
Media corporations can be measured in their influence in terms of setting agendas and influencing elite and national discourse.
Nowhere does Matt talk about "market power" which if I remember from my own long ago days upper level B-School classes is the roughly ability of one player within a market to independently influence that market's behavior. Matt uses the phrase "corporate power" which is more a poli sci concept: by what measure would you decide that some political actor "corporate" has greater or lesser influence when examining Alabama versus California?
Sure but this is kind of a dodge here; the Neo-Brandeisian types are making both the political argument and the policy argument and there is some merit to their policy argument.
It seems to me the most significant way in which big business has more power than in the past is the mobility of capital, including internationally. The threat of capital flight severely limits the ability of government at all levels—and thus people—to constrain and shape corporate actions. But I’m being mushy and non-quantitative here, so feel free to shoot me down with some numbers.
It seemed to me MY was not really speaking to the economic and market efficiency question but the political one.
Different subjects. His examples, his focus to me is clearly the political - and the vague undefined "corporate power" that really is basically just a mask on anti-capitalism largely.
Sure, but he’s written this post 10 times. It might be valuable to actually look at the literature on corporate behavior, both the economic and political. There is a robust amount of real academic work in the space. The 100th piece about how Matt Stoller is stupid and annoying is not illuminating.
I would agree, except that the Stoller approach seems to be the one that Progressive Democrats are leading with politically. Its similar to saying there is a good case for using tariffs to combat China's economic subsidy abuse, but then going with Trump's approach to raising tariffs on Canada for running an ad he didn't like on TV.
Its good to say Trump's approach is stupid repeatedly until he stops. Its good to say that Stoller et. al. "corporate power" approach is bad until they choose to use a better one.
Paul Krugman also has written about how the growth of various forms of economic rents may be an important, if difficult to measure, factor, in ongoing working- and middle-class discontent. Monopoly or monopsony power, overly broad intellectual property rights, etc.
Are corporate power and market concentration synonyms?
Interestingly enough Yale’s Econ department is incredibly strong in empirical IO, where this is most of what they’re trying to do.
Oh I know. Inshallah Steve Berry Nobel soon.
Sloppy. You can measure market power and measure weakly concentration.
Matt:
Milan is right, but he is both overthinking the measurement problem and under-scoping the concept of "corporate power". Market power is clearly only a subset of corporate power.
As for the measurement issue, the proportion of business income attributable to economic rent is a straightforward measure of business' capacity to achieve its primary goal (profit) without being exposed to its primary constraint (competition). So, "proportion of business income attributable to economic rent" is a workable (i.e. feasibly measurable and readily explainable) summary metric for business power. If you limit the measurement to companies above a certain size, then you have a workable measure of "corporate power".
This work is being done. Ross Garnaut bangs on about it at length in the Australian context, and I see from a very quick web search that Mariana Mazzucato (yay!) is onto it as well: doi.org/10.1093/cje/bead013
What I think is going on is that the people who are actually measuring the spatiotemporal landscape of corporate power are not using the term "corporate power" in their discourse, and (given the examples in your post) vice versa. Maybe you should be the ideas broker!
One final quibble: whatever "corporate power" is, its scope is national and not provincial. Trying to ask whether corporates exert more power in Michigan than Oregon is a non-sequitur.
C'mon, Matt. You've been around these people your *entire* life. Adept verbally, they use language to illuminate, advocate, describe, defend or obscure. If they are using some words that you cannot understand, that is by design.
They are anti-capitalists. Same as the communists in the 1930's, same as the campus radicals of the 1970s, now they are Democratic Socialists. They broadly believe their own morality is so superior, their ideas are so brilliant, their cause is so just that they should be in charge of making decisions about ... well, everything. And they believe making a profit is de facto proof of exploitation.
Let them be the critics. That's useful. Also, a market economy results in losers as well as winners, and these people can create systems and non-profits for making losing a bit less hurtful and catastrophic. That is a valuable and necessary role for a successful society. But we cannot let them actually run things. That would be bad.
You’re more harsh than I would be to the far left anti “corporate power” crowd (not surprisingly). But I feel like you made the exact same argument I make about hardcore libertarians and your last paragraph could be word for word a paragraph I would write about libertarians.
Sort of speaking of which. An example where libertarianism as an all encompassing philosophy falls short to me AND a place where (I think) I can give an example of the problems associated with “corporate power”; gambling. It’s really hard to tell the story of the uptick in problematic gambling habits (especially among young men) without talking about the “corporate power” of FanDuel and Draft Kings at the state and local
level, as well as the “corporate power” of the casino lobby.
I'm with you on being anti-libertarianism.
Libertarianism is a great critical framework and a terrible governing philosophy
This reflects a perennial argument I have with my more leftist friends. What they seem to dislike about corporate power the most is corporate interests wielding and directing the power of the state.
Which to my mind isn’t a problem regarding business; it is a problem of government! If government didn’t have such levels of authority, it couldn’t be abused by those kind of actors. The same problem on the libertarian side is that if you have weak enough or non-existent government that corporate interests effectively take control of power, you also have de-facto corporate control of government. And if you have government run services- those services might be run well or poorly but also face the risk of being co-opted by corruption extracting value from them, or the lack of market discipline making them more dysfunctional on average. Maybe (such as in the case of health) this tradoff is worth it and we just need to focus on oversight mechanisms and “good policy on the merits” as MY might say, but there isn’t some kind of magic way to wish away incentives.
To me the ideal system is more like how I imagine China, where the government steps in to keep businesses from failing so you have job stability, and where the government trims the sails of CEOs that get too big for their britches and think they’re John Galts instead of the truth that everything they own derives from the state. Bonus if, like China, you can still build infrastructure. 9-9-6 is trash and they should lighten up on their worker and currency. But the system of state owned enterprises that function in markets but are backstopped by the state seems like the proper nationalist thing to do. Better a state backstop than private equity vultures.
There's a phrase I use sometimes-in economics, fascism is when you have socialism, but pretend it's capitalism. State owned enterprises do not function in markets, because they can cheat. They can use the functions of the state to compel people to use their services, they can bolster failing companies (meaning companies not worth keeping around) with the state's ability to tax and borrow, the support of the state encourages cutting corners (tofu dregs), and by kneecapping independent entrepreneurs, system removes their contributions from the market. 996 is the expected result of the system you described, not an aberration.
This is my favorite comment from you I’ve read yet, and I think it makes a lot of sense as an integration of the parts of what the anti-corp-power people are saying that actually make sense.
The most specifically fallacious part of today's screed was this claim:
"I would note is that most furiously lobbied-over issues in a practical sense just pit businesses against each other. Pharmaceutical companies and pharmacy benefit managers both hire lobbyists and then the lobbyists fight each other."
As you say, there's no "Gambling is bad and we shouldn't do it" for-profit out there to battle for more regulation against DraftKings.
Of course, my mind most immediately went to the even more concerning issue of "AI is profitable until it very suddenly isn't because everyone is dead, and there is no countervailing business making lots of money off of 'don't kill everyone.'"
Why would everyone be dead? Isn’t that presupposing that we enable AI to make everyone dead?
I'm not entirely sure how to answer your question because I'm not entirely sure what capabilities you expect it not to have nor why you you would expect that. Giving AI as much control over the physical means of production as possible as early is possible is a capitalistic imperative.
As a kind of aside: Libertarianism - the ideological variety that looks to that loon Rand - to me is really just kind of a photonegative of Bolshevism (and not really classic liberalism at all).
What? In what sense? Classical liberalism was all about free speech, free labor, property rights, getting the sovereign out of business, etc.
"Falous" is actually right about this. Ayn Rand was actually heavily influenced by Marx. She absolutely had a similar vision of "class" conflict as well as Marx's views regarding Hegelian dialectic. Probably also (partially) explains both of their hostility to organized religion.
The difference is that she took these same observations of the world and basically came to a completely opposite conclusion. In fact, you could argue her conclusions about the world was itself a Hegelian dialectic reaction to Marxism itself.
to me she basically ended up with sort of a photo-negative of Marxism, with a label of libertarian but not the equanamity of classic liberalism which isn't ideological about the state but practical.
That's likely because of her experience as a former Soviet citizen. Classical Liberalism predates Marxism by 100+ years and thus does not need to define itself in oppostion to Marxism. While post-war Libertarianism seems to have at its core a deep fear of collectivism.
Yes, and?
Libertarians in the US of the Randian sort are obsessed more with anti-government and something more like an inversion of Marxism and not really classic liberalism.
I've always thought that the two great fallacies of libertarianism are:
1. Nature abhors a vacuum; if you render government small and ineffectual, then wealthy private capital will just control everything, leaving all of the rugged individualists dancing to their tune (though I suppose to the Musk/Thiel-wing, this is a feature instead of a bug).
2. Libertarianism has always been acutely aware of the threat of public (government) tyranny, but seems to be blissfully unaware of the threat to individual liberties posed by private tyranny, as well as the reality that most tyranny that has existed in human history is private tyranny.
Yes, and that private tyrrany readily after knocking down a formal gov, bootstraps itself into being de facto public.
Whereas classic liberalism has eyes open to the gamut and priviledges individual liberty in a pragmatic balance.
But since they're to me generally inverted Bolsheviks (the Randians who seem to be the dominant libertarians in general) like Bolsheviks proper they hand waive away anything outside of their dialectic focus.
I guess I don’t understand what you mean by either an inversion or photonegative of Marxism.
Try a bit harder. It's not that difficult. Mr Chaudhuri, Will I Am below etc. quite understood.
>It’s really hard to tell the story of the uptick in problematic gambling habits (especially among young men) without talking about the “corporate power” of FanDuel and Draft Kings at the state and local
Is it? Would it fix the problem if instead of two large online gambling corporations we had a proliferation of small ones? It seems to me that the problem is that young men are gambling irresponsibly, not that the profits of that the gambling is concentrated in a couple companies.
I feel like this entire anti-oligopoly “movement” was started by some drunken brainstorming session where they were like … look, I think Communism only has a branding problem — we need a new name.
Everywhere in progressive politics is the belief that better messaging is the only thing needed to make any idea popular.
But the Neo-Brandeisian messaging *is* popular. We found that at Blueprint and Future Forward found the same thing in their ad testing.
I was speaking more broadly. Every politix episode, for example, devolves into yglesias saying "we should moderate on this issue" and beutler responding by saying "we should just change on messaging on that issue."
I'm sure neo-Brandesian stuff polls well. Populism is popular with the populi and all that. But ask any redditor why don't Americans like socialism and the answer you'll invariably get is that they've been brainwashed by effective messaging/propaganda. The idea that people can understand issues and disagree on the merits is not something you see fully grappled with in progressive spaces.
I don’t listen to podcasts
You must not drive anywhere.
I only like highly produced podcasts, like Radiolab or 99% invisible. I have basically zero interest in just listening to a few people talk for a while.
I'd be curious how this plays out with either/or questions. I think most responders like "neo-brandeisian messaging" the same way they respond to "should we cut *your* taxes" which is almost always going to be - "yes please."
Its only when trade offs are included that such discussions can have any real merit.
Tab labeled "Econ policy" 6th item down. When you present antitrust policy as "low prices or less concentration" its tied. Sorry this is a Google Sheet not a nice PDF, we hadn't figured out how to auto-generate the nice PDFs when we released this poll.
https://docs.google.com/spreadsheets/d/1JhSWPVcKK6tdufsa52TeRk3JRwSsgtglVQP1ZAa8fg4/edit?gid=507604013#gid=507604013
Thanks for sharing that. Its interesting and moves my priors a bit on this. I'm still doubtful that people would be happy with an aggressive anti-trust policy that actually raised prices, but if they thought it was actually accomplishing an anti-trust objective maybe they would.
…and unfortunately it seems as if they rarely are!
Speaking as someone who has, like, literally been in in-person book groups with Sandeep Vaheesan and shit (side note: agree or disagree with his politics, the guy is incredibly freaking smart), I can assure you that those groups were both thoroughly free from attraction to doctrinaire Communism and also not really that boozy.
Obviously this comment is libel and not actual analysis, but it's worth noting that as actual analysis it's also just factually false.
I'm sure this is true of Teachout, but is it true of Stoller, for all his flaws? I see no reason to think so.
Matt has a tendency to, on topics he doesn't like or understand well, just pull the weakest gazelle from the herd of opposition commentators, slaughter them, and call it a day without addressing any of the substance.
You and I have had this out before; if you can tell me with a straight face that ag. processing is not a cartel that has carved the US into small monopoly markets, that hospital systems in rural and small urban areas have not consolidated their way to a ton of pricing power, that car dealerships haven't completely subverted the regulatory system, that a huge fraction if not an outright majority of M&A discussions center on pricing power, that exclusive supplier contracts don't deeply distort pharmacy supplier markets... then fine, everything is A-OK.
But you know it isn't, not really.
Matt and a few commenters here like to talk about how scale improves efficiency and outcomes, but that *only* holds true if those companies operating at scale are still in highly competitive markets or are regulated in a manner to make them act as if they are.
Otherwise they simply move to capture the transaction surplus and sit on their laurels, and the degree of disruption that exists in established markets like agricultural processing has never been lower, so no one is going to enter the capital-heavy, complex market to undercut them.
So I'm actually overall with you that MattY has a bit too much of a tendency to "nutpick"; take the least persuasive argument by someone somewhat prominent and assume this is the viewpoint of a large number of people*.
But this statement "that car dealerships haven't completely subverted the regulatory system" actually sort of undercuts your point. Because it's not the CEO of Ford or CEO of GM hiring corporate lobbyists across the country to ensure that they can't sell directly to consumers. In fact, I'd say it's likely in there financial interest to be able to sell directly to consumers as this would likely reduce the sticker price and result in more sales. It's actually the (to use an older term of art) petit bourgeoise who are responsible for this "rent seeking" regulatory capture. In fact, if anything this is a case where Corporate power throwing around their weight may in fact be good for the consumer.
* This to me has clearly happened with immigration. I kind of think Matt has sort of lost it on this issue. Listening to him and Brian on the podcast this morning going to work made me want to slap him across the face Cher style and say "snap out of it!". He's basically a complete doomer on this issue and is absolutely convinced the "Open Borders"/"Defund the police" crowd will end up dictating Democratic immigration policy if Democrats even slightly try to push back on DHS funding. He actually advocated for completely caving and funding DHS full stop and then saying we should then go out and immediately fund raise for Tom Suozzi. I'm like, due the center of gravity on this issue has clearly shifted. If you're goal is to be in alignment with swing voters that would actually clearly be aligned with taking a stand on DHS funding holding ICE accountable (setting aside that at some point, you have to least somewhat stick up for principles and basic decency). Like, this is not 2020, nor do we have a flawed leader who is clearly losing his mental faculties as head of the party anymore. It as absolutely possible to be anti-ICE and not given in to the most hard left open borders crowd and still be aligned with "Popularism". His doomerism on this is actually genuinely making me upset with him.
" I'm like, due the center of gravity on this issue has clearly shifted."
Has it really? Voters clearly don't like how ICE has been abusing it's authority. But Republicans are still trusted more than Dems on immigration.
The way you square that circle is voters want a secure border AND interior enforcement. They just don't want ICE acting like thugs and shooting people in the back.
I like the term "nutpick", it's like a strawman but you're finding a real person to be your strawman (typically this is possible because there's always some nut with every possible policy position)
This makes me glad I stopped subscribing to Politix. Avoiding heart attacks and all that.
I subscribe to both Brian's and Matt's substack and comment on both. I've noted a number of times that my inclination for awhile now is that Brian has had the better arguments last few years. The thing is that I think they would both tell you that they're actually pretty aligned all things considered. A lot of their disagreements are often on very narrow grounds. I think Brian would absolutely say that trying to shape the narrative does NOT mean that we should go out and loud and proud advocate for the most lefty policy positions because that's supposedly the secret sauce to reaching working class voters and/or you can just shift the overton window.
Which is actually kind of why I think Brian has the better argument to me. I feel like I'm summarizing his position correctly by saying that it's wrong to think that "popularlism" means that you have no ability to shape the narrative around what will get swing voters to come to your side and it's also wrong to think that just ceding the terrain to Republicans on stuff like immigration because it's overall a better issue for them, is good politics. There's no reason to needlessly start talking about the other side's best issues, but it's also problematic to fight the other side on their best issues when you have an actual opening to do so. And Brian brought this up, but MN residents keeping to best traditions of non-violent resistance is almost proof of this.
I think on the nuts and bolts of policy Matt is on stronger ground and probably knows more than Brian. Big part of why I subscribe to this substack. But I really think Brian has it right when it comes to politics. And, I appreciate that as much as he sounds alarm bells he's clearly more positive and more bullish on Dems chances of beating back this rising tide of Fascism. Matt just seems to be giving up honestly and at some point I might just try to jump in to one of his posts and kind of take him to task.
You make a good argument though I'm not sure Beutler is always better on the politics (he seems to think that Democrats holding hearings is the key to winning elections).
To be honest, while they both aggravate me with their takes, the main reason I unsubscribed is because I developed an allergic reaction to them both constantly fighting over the microphone. I *never* hear that on any other podcast.
I mean fair enough on the aesthetics.
I do think the lack of "fighting" on other podcasts is maybe not necessarily positive. I suspect in a lot of cases it's because the hosts are just agreeing with each other too much and not really having a meaningful conversation.
Regarding Politix, I debated cross-posting it here, but I was disgusted when Matt said that getting Trump to retreat in Minneapolis was not "all that significant to me personally."
I would have a great deal more sympathy with these arguments if the people leading said movement focused more on ag. processing, car dealerships, etc. instead of going after Amazon or Waymo.
As I mentioned elsewhere, there is a case to be made for using tariffs to oppose Chinese business subsidies, but then Trump comes along and threatens tariffs on Canada for running an ad on TV he didn't like. At some point with both tariffs and "corporate power" you have to acknowledge that the people leading the charge are actually the weakest gazelles using the least amount of substance.
I am making the argument that I am making, not whatever the hell Stoller said last week.
Likewise, on trade, I am not making Trump's argument, I am making my own, and I obviously believe it to be a better argument.
My only point about Stoller was that he is plainly not a communist. I otherwise said nothing about the merits of his positions, except to say he's an idiot in a different comment.
As for Kahn, I said almost exactly your first sentence to someone last week! She was a spectacular failure because she did nothing substantive to address actual abuses, except the obviously, transparently not-her-remit language trying to ban non-competes.
I think we could find a lot of common ground based on *your* arguments. But Matt's responding not to your steelman, but to the actual things that come out of the FTC or Congress from the leading advocates against corporate power.
This is probably the 10th time he's written this exact article, and there is the opportunity for him to be more useful and try to apply some rigor to this space but he plainly doesn't want to.
I am absolutely here for the comment section, as it's plain that Matt is out of ideas and Twitter is really doing a number on his priorities and sense of what's real. The ratio of lazy nutpicking to solid analysis has ballooned since I took a break last year.
"At some point with both tariffs and 'corporate power' you have to acknowledge that the people leading the charge are actually the weakest gazelles using the least amount of substance."
I think that metaphor was emulsified!
It'll settle out if you give it time...
My best metaphors usually are.
"that hospital systems in rural and small urban areas have not consolidated their way to a ton of pricing power,"
But they are 80% non-profits with very low seven figure CEOs - they have pricing power to keep the doors open. It's not like they are doing it to make money and reward shareholders.
I mean, critical access hospitals legally have insane pricing power because they can still operate as fee for service, but yeah, that’s to keep the door open. I think what he’s more getting at is CON restrictions that prevent competition
I'm not sold on CON as the issue - if a hospital has all the beds full and it will take weeks to schedule an outpatient visit they have no desire or ability to do any more work than medically necessary.
In a world where a bunch of hospitals are half empty and desperate for business there would be a lot more dubious medical treatment.
If all the beds are full, hospitals can raise the prices into the stratosphere. And they do! And of course, they try to cycle beds as fast as possible and bill for whatever they can (which is limited since normal hospital billing washes through a DRG)
How can they raise prices into the stratosphere - there are very very few self pay patients. Walk me through how you think it works.
Which you definitely see at critical access hospitals
And they have the standard 3% margin (if they are lucky) it's not like they are minting money.
I wouldn't take any of the positions you ascribe to me, absent not believing ag. processing is a cartel. I'm a supporter of free markets to be sure, but regulation and enforcement of antitrust legislation are critically necessary to ensure companies don't follow their natural inclinations toward monopolistic behaviors.
Where I disagree is where size alone (or, more often, a rich person as owner/ceo) is used as a justification to intervene. The idea that Amazon, for instance, has a monopoly in certain retail spaces is wrong and easily disproved by a trip to Costo, Publix, Walgreens or Walmart.com. That isn't to say Amazon can't do bad things -- any business or person can. But the solution isn't to break up anything big or rich.
Regarding mergers: I do think the Government should take a more critical approach in this area. I think they've been overly deferential to efficiency / synergy arguments and have overlooked the pricing power that drives a lot of acquisitions.
I know you wouldn't, which is why I picked them, because we have discussed them before and I understand your views to be broadly nuanced on these matters.
In the main, I agree with your second paragraph, as you know. Amazon's business absolutely has some unsavory aspects to it that may be amenable to regulation, as my mailbag question and the attendant discussion pointed at, but they are not because it's a monopoly or anything close. Walmart and Target are clear and obvious peers across most of what Amazon sells, and in other niches it contends with competition from hardware stores, grocers, etc. Its data analysis and cloud computing services are very obviously competing with Google and Microsoft, along with a gaggle of more specialized mid-sized competitors.
To the extent that I apply a heuristic to thinking about competition and consolidation, it's that the legacy economy is obviously far more problematic in many ways than technology companies are. You've got the aforementioned ag. processing, auto manufacturers trying to achieve total control and lock-out over the maintenance/asset lifecycle so they can capture all services value, pharmaceutical distributors forcing exclusive supplier contracts on pharmacies to curtail price shopping and supply chain diversification, regional medical system consolidation, whatever the hell PBMs have become.
Set against that, my main gripe with technology companies is that some of what they're making is closely akin to crack. That has nothing to do with consolidation or lack thereof and can only be dealt with by excise taxes that make it impossible to turn a profit off the advertising-revenue model. Let them see if anyone actually wants what they're peddling enough to pay a subscription fee for it, lol.
I am pretty pissed off at Stoller and co because they refuse to either do solid analysis themselves or find those who can it, so that they can actually accomplish something useful in this area of policy... but I am also deeply irritated at Matt because he should know better than to, as Colin puts it, nutpick. There's a lot wrong with the degree of pricing power and anti-competitive contracting that many entities have achieved. On some level, he knows it, or he wouldn't be so leery of grappling with the hard questions in this space.
I would happily pay for a version of Facebook that got rid of all the addictive and toxic crap and was just cloud storage for my photos and a way to keep in touch with old friends. That’s its core value proposition! And it’s very useful for that. I’d even pay a fairly high monthly fee for it. But if it were to charge high fees, the network effects that give it its value proposition would rapidly die in favor of the next VC funded social network that would be good until the moment the investors wanted to recoup their investment and then we’d get rapid enshittification again. I think most Big Tech companies are fine, but social media really should be run as a public utility.
The problem is that a lot of friends and family are responsible for writing and sharing toxic crap. Aside of course from my regular observation to you that social media as a public utility would be subject to First Amendment protections that would make it unworkable.
Excise taxes. Whopping ones. Make it impossible to profitably run a social media platform on advertising revenues alone.
I can't find a single argument regarding taxation powers in the federal Constitution that says you cannot tax the hell out of one specific type of commercial activity, though I am unsure how it would interact with uniformity clauses in some state constitutions.*
*Even here though, most of those states have narrowly applied alcohol and tobacco taxes, so presumably the case law is favorable.
Yes, we disagree about this. Most of the toxic crap has no relation to things my friends and family post, it’s pure algorithmic slop
I really wish you had a substack, I would subscribe
Ag meat processing absolutely IS a cartel, with a number of pretty egregious examples.
One of the better known is the source of this lawsuit:
“Have you purchased meat at the grocery store over the last 10 years? If so, you may be entitled to a cash payment as part of a multimillion-dollar settlement with two giant meat companies after a lawsuit alleged they overcharged customers.
The class action lawsuit claimed several beef processors, including JBS, Cargill, National Beef and Tyson Foods, "conspired to limit the supply of beef and increase prices in the market."
Plaintiffs in the complaint, filed July 29, 2024, in the United States District Court of Minnesota, allege the meatpacking companies conspired with the slaughterhouse to inflate the prices of the beef sold to the consumer and extract gains from the cattle ranchers.
The companies denied any wrongdoing, instead agreeing to settle for a total of $87.5 million, with $55 million from Tyson and $32.5 million from Cargill.”
https://www.nbcchicago.com/consumer/a-multi-million-dollar-settlement-involving-2-giant-meat-companies-means-you-could-be-owed-money/3872720/
And
“The plaintiffs claim Tyson and others used a company called Agri Stats, which is named as a “co-conspirator” in the lawsuit, to exchange detailed, competitively sensitive, and closely guarded non-public information about price, capacity, sales volume, and demand.
According to the lawsuit, Agri Stats provided highly sensitive “benchmarking” reports to most pork integrators, “thereby allowing competitors to compare their profits or performance against that of other companies.”
“The effect of this anticompetitive exchange of non-public information allegedly allowed Pork integrators to control the supply and price of Pork,” the lawsuit stated.
In a 2023 lawsuit against Agri Stats, the U.S. Department of Justice said the company was organizing and managing anti-competitive information exchanges among broiler chicken, pork and turkey processors. The 68-page complaint alleged that Agri Stats violated Section 1 of the Sherman Act by collecting, integrating and distributing competitively sensitive information related to price, cost and output among competing meat processors which accounted for more than 90% of broiler chicken sales, 80% of pork sales and 90% of turkey sales in the US.”
https://www.michiganfarmnews.com/tyson-foods-to-pay-48m-as-latest-meat-processor-to-settle-pork-price-fixing-claims
You are absolutely right that companies try to get market power, through cartels, motes and basically any tactic available.
However, the efficiencies of scale are generally much bigger than the rents captured by oligopolists. Eg, if peasant agriculture produces 12 bushels an acre and corporate agriculture produces 130 bushels an acre and mechanizes harvesting, you can pay oligopolists and stationary bandits quite a few rents and come out ahead.
The original sin of the stoller/teachout etc types is that they're fundamentally not quantitative in their approach. They are lawyers telling just so stories. Its hard for me to find anything they say as credible or actionable.
"Matt and a few commenters here like to talk about how scale improves efficiency and outcomes, but that *only* holds true if those companies operating at scale are still in highly competitive markets or are regulated in a manner to make them act as if they are."
This is simply false as a matter of economics. Demand curves slope downwards. The monopoly pricing condition is that a monopolist continues to sell output until the marginal revenue of selling the final unit equals the marginal cost of producing the final unit. Economies of scale means that marginal cost goes down, which lowers the point at which marginal revenue equals marginal cost, which lowers price. In other words, even a monopolist will pass on *some* portion of marginal cost savings to consumers, to their benefit.
In real life, firms use data to charge consumers based on their willingness to pay - there isn't one static price, so the surplus is largely captured by the monopolist. Just look at the pharmaceutical companies and payment assistance plans for blockbuster drugs.
In the actual real world, this is the exception not the rule. Something on the order of 99.9% of the transactions you or I engage in do not feature personalized pricing or price discrimination like this. Also, pharma pricing--which is largely a function of patent protection and insurance coverage--is a *terrible* setting to make inferences about how the broader economy works. Something on the order of 99.9% of the transactions you and I engage in do not feature a seller with IP on the other side nor is the transaction intermediated by insurance.
So corporate power is the power of business interests to get the government to help them enforce monopolies and write regulations favorable to current interests over potential competitors?
That is a tiny subset, at best; there are plenty of other ways to achieve sufficient scale, consolidation, cartelization, etc... such that a firm has pricing power, leverage over contract terms, or the ability to take other anti-competitive measures.
Is that stuff also what we mean by "corporate power"? You seem trying to define all the ways a company can get a monopoly, but I was going with trying to figure out what "corporate power" is. I'm not sure those are the same thing unless you think they are the same thing?
I’m not sure it’s actually *by design* as opposed to emotional and/or mindless mood affiliation (the “superior morality”you also mention) and aesthetics. In my experience people who hold these kinds of opinions seem to take it for granted that all right-thinking people agree and persuasion isn’t required.
You are definitely describing a type. Your mind enjoys fulminating against this type and mine sort of does. This type exists, but there aren’t hoards of them. Many Bernie bros were more anti Hillary than anti capitalist.
Yeah this type definitely exists but I think it’s a second order example of “Twitter is not real life”. What do I mean by that? The number of far leftists who just mindlessly fulminate against “corporate power” is probably a smaller number of people than we think. But they get interviews, their ideas get thousands of “likes” on Twitter and suddenly some staffer is telling a politician “this is the voice of the people”.
I’ve brought this up before but in 2020 there was a woman who wrote a book basically arguing rioting was a good thing because attacking businesses was actually a way to address racism (or something). And she was interviewed over and over again on every freaking platform you could think of. You would think she was like the great “voice” of a generation when she was really a rando who wrote a book with a thesis at the absolute most opportune time. I feel pretty certain if you ask anyone who marched in BLM protest whether burning down a convenient store was a good thing in of itself the large majority would have said that’s pretty ridiculous.
And that case is probably just strategic nutpicking. Same with Kendi/DiAngelo. Deliberately engineering the backlash they want, like having agents provocateurs at protests or burning the Reichstag
It is pretty funny when they're ideology runs into law and their cases get tossed. But every once in a while they win and close a business, which is more harmful than general anti capitalist squawking.
I think the reality is a bit more nuanced that "lol goofy ideologues get EXPOSED by real legal analysis" and somewhat closer to "US courts are generally quite pro-business and in recent decades skeptical of ~any antitrust agency's enforcement actions"
Antitrust laws are typically very vague (in the US except for a few defined “per se” violations like price-fixing, most antitrust violations are judged under a “rule of reason”—the court decides if what you did is reasonable). And neither courts nor activists tend to be professional economists so there’s a ton of wiggle room and a bit of amateur hour on all sides when it comes to this.
The real legal overreach of Khan was trying to pass rules outside the FTC’s remit like the ban on non-compete agreements (which I agree with on the merits but it’s not something an agency should just be able to do).
I do agree with you on the last paragraph, am no fan of non-competes, from a market PoV other than in very very narrow circumstances.
I was glib but I disagree, it's somewhere in the middle based on the rebukes some of these cases get for lack of bringing any evidence of either market definition or monopolistic claims over it:
https://open.substack.com/pub/socialdawn/p/anti-anti-big-tech?utm_source=share&utm_medium=android&r=9xf6a
Feel like antitrust could use a new term.
In most countries it’s just called “competition policy” but we have a special name for it in the US because the first laws about this were written in response to late 19th c. trusts.
I think it’s sad that this movement is mostly law professors and not based in anything quantitative like economics
that's because american antitrust policy is traditionally (for the past few decades) based on economics, and some law professors dislike that
I don't think this is accurate at all. Some people who are opposed to "corporate power" like Mamdani are socialists. But the anti monopoly people talk about this a lot too, and they're very focused on small business and competition, not state ownership.
My argument is that even Mamdani and his cohort aren't socialists (in the sense of seizing the means of production), but that they are anti-capitalists. Same as the anti-monopoly people. They are supportive of small businesses (as long as they don't make much money) and competition (as long as nobody wins the competition).
I too support competition only as long as nobody wins the competition. As much as business owners might wish otherwise, it's a terrible idea to let them cross some sort of finish line and then they have to stop racing against competitors.
I know that's probably not what you meant by "win", but the idea of businesses being allowed to "win" and then leverage state power or other means to no longer have to compete is a genuine concern.
I just think the state should take a chunk of all the competing businesses and then manage the competition so no one wins
I think a system where there was ownership of all businesses by individuals who kept the profits, but businesses were small, would obviously be described as "capitalism".
I thought not winning the competition was inherent in the theory of free market capitalism. Aren't profits supposed to go to zero?
Right, if you read Matt Bruenig's writing, he's against the anti-monpoly types *specifically on socialist grounds*. Like Matt wrote, it's far more coherent as an affective posture than an ideological one.
"It’s just that there are basically two kinds of economies: one where businesses are growing and thriving, and one where there’s no growth and the economy is sputtering."
I think you hit on what they want - a small college town of book shops and vegan restaurants and art galleries and organic food co-ops where everyone can live an upper middle class bohemian lifestyle.
The question of what it takes to produce the natural gas to heat the homes and generate the electricity, how the cars and construction materials and water treatment infrastructure and the pharmaceuticals and medical devices and the consumer goods are designed and built ...all that can just be ignored. That's a world a lot of people really want to live in. It's totally unworkable, but for many it's esthetically pleasing.
> The question of what it takes to produce the natural gas
We shouldn't use natural gas
> to heat the homes
We should have apartment buildings
> how the cars
We should have no cars.
> and construction materials
No corporate buildings, thank you!
> and the pharmaceuticals
We don't need your poison.
> and the consumer goods
We don't need your plastic crap.
> all that can just be ignored
Yes, now you get it.
Exactly - if you talked to the person holding that sign thats what they might think. It's all ignorant feel good nonsense. But a lot of people go through life on a bubble of feel good nonsense*.
* It's like that famous woman recently who had breast cancer and the oncologists said you need a mastectomy, chemo, etc. And she said, "I know my body is strong and I know the body knows how to heal itself. I don't need that." And...she died.
Also see Steve Jobs and his highly treatable insulinoma(sp).
How about you resolve this? Were you being sarcastic or not?
"Yes."
Sorry you fell into the hole left by Poe's Law.
Fair enough. Thanks.
Ok, so pastoral socialism is your goal. How would the US get to get from here to there? State power?
Obvious sarcasm is obvious.
In James's defense it's not obvious because a significant number of people do believe that.
Bro got Modest Proposal'd.
It's *extraordinarily* obvious that that comment was satire.
It wasn't obvious to me. I lose track. I don't know Edward Scizorhands's political preferences. In general, I wish the Davids on this site had a little more curiosity and were less judgmental. There's too much dogmatism and too little questioning.
It's a holiday in Cambodia!
I think this is a great insight, and to add to it, there is absolutely nothing wrong with having that as an aesthetic preference. Towns like you’ve described are great and I don’t hold it against anyone for wanting to live in a place like that. The issue is this is being presented as a political preference rather than an aesthetic one. You want to make every city in America ‘feel like’ a thriving college town? Honestly I get it, but as MY wrote that’s not a measurable goal.
I’m as allergic to Warren and Khan’s lazy rhetorical approach as Matt is here but certainly there’s clear measures of “corporate power”. You can look first at the share of concentration by industry (e.g., 50% of Vet clinics are now owned by sophisticated financial owners / roll-ups) and you can look at profit margins within and across industries. The nuance here is “corporate power” just becomes leverage and that negotiating leverage is just as likely to be deployed against suppliers to lower consumer prices (e.g., Walmart) as it is to create competition barriers to raise prices and expand margin. The big trouble for this laziness is from a consumer surplus perspective a duopoly likely the most competitive and efficient structure by concentrating the market share risks as winner take all while creating the two largest absolute margin flows to invest.
Some other measurable items:
- states where non-compete clauses are enforceable
- fraction of employees covered by forced arbitration
- fraction of board seats of major bodies (both for-profit and nonprofit) occupied by C-suite executives
- the average budget for a corporate general counsels office compared to the budget of the state's attorney General's office
- fraction of political donations in a given cycle from corporations with >$1B market cap
Both Board Seats (of what publicly traded corporations? Limited liability companies - which by the way don't have Boards) and Corp Gen counsel office metrics are nonsensical and have no meaning. There's zero relation betweeen these things.
Medicine is a rare area where there are laws that specifically target and try to keep out corporations--anti-corporate practice of medicine laws that make it nominally illegal for anyone not a human licensed physician to own a medical practice. Yet the majority of physicians now work for practices controlled, if not literally owned, by corporate entities, such as hospital systems, health insurers, private equity, and in the latest trend, drug wholesalers.
So what have CPOM laws accomplished? Not much it seems, except to make healthcare deals more complex and therefore more lucrative for law firm and investment banking advisors. And maybe to slightly increase the leverage of physicians selling their practices to corporate buyers.
I think what the smarter "anti corporate power" people really want instinctively is for businesses not to be rich or powerful enough to lobby the government effectively. In their view, that's antidemocratic. Debates over whether and how much we regular business should be conducted solely by disinterested citizens in the world of takes. If you're too small to lobby, then you're fine.
There are probably ways to measure that. But one problem is that there isn't really a clear correlation between business size and lobbying strength - as Matt has pointed out in the past, the big Wall Street banks got rolled during the Dodd-Frank debate but Elizabeth Warren herself was forced to allow a carve-out for regional banks; local car dealerships are among the most powerful trade lobbies in America; etc. So if a key part of your factual premise is wrong, then it's going to be hard to create metrics that fix the problem you've identified.
And smaller businesses can of course join together form their own organizations--a corporation, if one will--to create large lobbying efforts. Just off the top of my head, the American Medical Association, the National Automobile Dealers Association (NADA, what an appropriate acronym for what that group should be...)
There is a LOT to this. The anti-corporate-power people have always struck me as “clever, but not *bright*”.
In rightwing troll parlance, they’re wordcels: Good at spouting off a bunch of words that are consistent within their own self-constructed framework, but not valid under any broader scrutiny.
Moreover… they have a near-total overlap with the “MoNeY iN PoLiTiCs!1” crowd. To echo and paraphrase your initial point, these are the people who would’ve let Blago off if he’d tried to sell Obama’s Senate seat for the benefit of blind orphaned cancer kids; what they don’t like about the money isn’t the money itself, it’s that it subverts the democratic will and vague notions of fairness and charity.
The thing is, as wordcels, they aren’t REMOTELY smart enough to understand any of what I just said. They are classic examples of ACX’s “conflict theorists”.
There's some nice illustrations of this when you investigate the property tax per unit area. Small business pay considerably more, while the Walmarts of the world are very good at quietly extracting local and government wealth. A place may have existing stores, but then Walmart arrives and an excited DOT and local politicians trip over themselves to provide an interchange, a stoplight, a frontage road, extent sewer lines, etc.
I consider myself pretty pro-capitalist and also admit that many of the anti-trust crowd are morons or communists, but it strikes me as a real problem and I think centrist technocrats, of which I count myself, are overly impressed with the reputed economies of scale and miss something about city finance.
And culture - it irks me that Matt has a very "cute fine grained indy-store urbanism for me, Walmart for thee" attitude about these issues.
"I think what the smarter "anti corporate power" people really want instinctively is for businesses not to be rich or powerful enough to lobby the government effectively. "
so a fantasy land.
There are clear measures of it but the problem is anti trust lawyers really really hate economists and are mostly allergic to the (generally widely accepted) math.
They just don’t like or understand the accepted measures of monopoly and consumer/firm harm, or the generally accepted definitions of market failure.
“… negotiating leverage is just as likely to be deployed against suppliers to lower consumer prices (e.g., Walmart) as it is to create competition barriers to raise prices and expand margin”
I noticed you failed to offer an example of your second idea. Maybe there are none?
I'm familiar enough with Ishbia's micro-roll-up thesis (i.e., seen the friends and family pitch decks) that it's not hyperbolic to say they just buy small clinics and raise prices. There's like 1000s of example like this.
https://www.forbes.com/sites/mattdurot/2024/04/09/this-main-street-billionaire-bought-over-a-thousand-small-businesses-and-never-lost-a-dime-justin-ishbia/
“While critics say private equity hurts consumers by reducing competition and quality and raising prices, Ishbia dismisses the idea.”
Re: “safer streets,” I have even heard this used in the more literal sense. That is, as a framing for an agenda around reducing auto and pedestrian fatalities. What some may hear as a tough on crime attitude is actually just a politician expressing support for anti-car measures, two very different things.
I am anti moronic unlawful drivers. We have let vehicles become more threatening to non drivers and increased the amount of horsepower relative to weight.
It doesn’t help that we have found a way for morons to finance $70k trucks with maiming plows as daily commute vehicles.
I was at the TRB* conference a couple of weeks ago and it was kind of weird to hear administration officials going on about “safe streets” in the policing/enforcement sense (“supporting our police”). Usually at a transpo confab that phrase is used to mean something closer to what you describe, and there might be discussion of ways to automate enforcement, freeing up human resources for other purposes. But (maybe in an obverse of “corporate” on the left) there seemed to be a desire to talk a lot about “police.”
*Transportation Research Board, part of the NAS
TRB: The Omniconference for the Omnicause.
What fraction of presenters had a variant on "AI is going to fix all our problems!" this year?
Has it displaced the recently dominant "Look at this data analysis that proves everything is inequitable?" line of discussion yet?
There was *a lot* of the former (apparently it will even fix NEPA!) but there was somewhat less focus on equity. In general, it was pretty boring! Only a couple of sessions I attended were interesting (in a very narrow sense, NEPA assignment being one of them but weirdly there were two virtually identical panels on this topic; I only went to one).
I've seen some interesting stuff at past conferences (the impact of not providing [frieght] truck parking, "Projects that Didn't Go Well," etc). Not so much this year. And the career fair was a ghost town.
When there, I was always off in the transportation and structures stuff, which is basically its own world where this is just another AASHTO meeting, just with a bunch of fluffy fru-fru bullshit floating nearby.
We grudgingly accept that some of the planning track stuff is rigorous but basically everything else that's been bolted on is just grant grifting or graduate students who ran up a brief presentation so they could get approval to go and job-hunt.
At some point I'm hoping to get back more to see some folks than because I need to be there.
That’s how I’d interpret the phrase tbh... Most people who are injured in a street are probably injured by a car not a criminal. If you told me “X was killed in the street” I’d assume it was a bicyclist or pedestrian hit by a car.
"Killed in the street" = hit by a car
"Killed in the streets" = attacked by a person
That one little "s" makes a big difference.
> “X was killed in the street”
I interpret this as simply someone dying from violence, in public. Not even necessary on a street (although not like a place like a park).
That was where my mind went immediately, and then I chuckled when I realized what he actually meant and how clearly my misinterpretation supported the point he was making.
This is true, but it's also somewhat of a newer usage than the one Matt uses in this article.
Regardless of if you think its a problem or if the article is missing the point. I've always found that the claims that we are in an "unprecedented" or "extraordinary" era of corporate power weird. The British East India company controlled a subcontinent, had a standing army three times the size of the British army and had so many tendrils in parliament defanging it was a major drive of the various reform acts; Standard Oil is a byword for a corporation controlling an entire critical facet of society; several banks in 2008 were deemed to big to fail and bailed out; the EPA was founded because corporations had been making the air, water and land itself toxic; and so on. Are we really to believe that corporations in the 2020s have more power than that?
They have more power now than they did from 1950-1980.
Really? I seem to recall someone pointing out that corporations used to have the power to make rivers catch fire and the air unbreathable, but they lost that power.
I think this is the heart of why I hate so many of these arguments. They only work if you explicitly ignore all of the actual progress we have made over the years. It is mind boggling.
This is where this gets a little complicated. There isn't a single variable of corporate power. Corporations didn't have the power to pay their CEOs arbitrary pay packages. Boards were expected to be somewhat independent. There wasn't private equity in the sense there is now. There was intense pressure on corporations to be socially responsible and work with government in specific ways, as opposed to the neoliberal Friedmanesque pursuit of shareholder value at all costs. So corporations were constrained, in a way that they aren't now. They didn't have freedom of action. For example, there was no way in that time period that someone like Elon Musk would have had control over military comms like he does with Starlink now. That was the whole point of countervailing power as developed by Galbraith.
I think this is a much more useful way to talk - talk about particular kinds of corporate power for particular corporations, rather than just “corporate power”. I happen to think that it’s less bad to have corporations that give their CEOs big pay packages than to have corporations that set rivers on fire. A generic “attack corporate power” agenda doesn’t say which power of which corporations they care about. Matt is wrong to say there is nothing measurable here, but he’s right to say that the people going on about this don’t say what it is they care about.
Is pollution really a corporate power thing?
I've always kind of looked at environmentalism as something that happens as a result of economic growth. Economic growth means that people can afford to shift priorities toward care for the environment.
Are you worried that you are being deliberately obtuse? A phenomenon we're seeing across the developed world outside the US tech sector is increasing market concentration, lower rates of firm entry and exit, declining worker mobility, and (sometimes) higher gross margins. This seems to be the main culprit in slowed or stagnant income growth outside the United States. And it also seems like a logical construct for what market power is.
I get that these people are annoying and economically illiterate, but they are not wrong that in many countries and markets local businesses have been wiped out and markets concentrated into two or three national chains.
“I get that these people are annoying and economically illiterate, but they are not wrong that in many countries and markets local businesses have been wiped out and markets concentrated into two or three national chains.”
Sure, but there is not a straight line between that kind of consolidation and higher prices for consumers (the usual focus of antitrust policy), or a government that is more beholden to monied interests, or lower economic growth. A bunch of small businesses would exist if not for the rise of Amazon and Costco and Walmart over the last 30 years. Would anyone actually be better off, though? This crowd starts with the answer that big is bad and backfills the rationale or metric to support that perspective.
The Atlantic did a good piece on this back in December 2024 examining studies that looked at the longterm effects on communities when Walmart entered. In the one study they did a good job of matching communities where Walmart had succeeded in establishing a store and communities where they had tried and failed. The outcomes resulted in lower incomes in the communities where the Walmart opened vs. where they did not, and it was worse for low income wage earners. Link below.
https://www.theatlantic.com/economy/archive/2024/12/walmart-prices-poverty-economy/681122/
There are data and studies out there supporting the thesis that communities would be better off without them. It isn’t just backfill.
I’m not equipped to parse and critique this study from European social scientists. It is certainly better to have such support for one’s views than to not have such support. But I do not give it very much weight. Science has taken millennia to decide if eggs are good for us, and they still don’t know.
I would just pose a question: would your views, or would the Big Is Bad crew’s views, change one iota if these same authors, with the same methods, found that Walmart increased household income by 1%? Or would they ignore it, reject it, and/or come up with some other basis for their views? My view is that these people *feel* Walmart is bad much more than they *think* or *know* Walmart is bad.
What are you then ‘equipped to parse and critique’ and how do you make rationale decisions? For the record the article references two studies not one which makes me doubt you even read it. I gave you studies that looked at your question as to whether or not anyone is better off without the rise of these conglomerates replacing local businesses in the community. But clearly you were never interested in an answer to the question because when presented with studies and data your critical facilities couldn’t handle them.
Clearly you only run on feelings and vibes and not evidence as you admit in the last sentence where you engage in the exact same sins you accuse those of’Big is Bad’ of committing. But how could you do otherwise when you’ve admitted you can’t evaluate evidence.
If you don’t like an outcome from a study, by all means critique the methodology which demonstrates you can engage with the data, But if you aren’t willing to do that, then don’t ask questions for which there might be empirical studies and throw out red herrings about eggs — I could comment on the nutritional value of eggs and risk/benefit of consumption based of their composition, but what would be the point since you added that for rhetorical flourish and not as a serious comment about the scientific basis of eating or not eating eggs.
That seems AI generated towards the end there. I know there are two studies but I only started digging into the first. My main point is that can find an academic willing to reach any anti-business conclusion you’d like. It doesn’t actually establish their findings. Replication crisis, etc.
I have never used AI to write for me. If that was your point then why throw in a red herring and have the vapors on how you couldn’t possibly evaluate the studies. The studies are not anti-business either. Evaluating the outcomes of different business models on communities is not anti-business unless you are afraid of the data — or begs the question who do you believe qualifies as *business*. These studies are merely looking at longterm outcomes of different business models/types. If Mamdani ever gets his government stores off the ground, then we should get data that could be used for comparisons of the private vs. public sector and the effects on communities, but the only anti-business bias here is your own.
objection - appeal to authority
This result makes intuitive sense. I’m now remembering one of the few SB commentators I’ve blocked (Ken MIA) was in response to his bad faith arguing on this point.
When a Walmart comes to a small community it removes the profit from the community, which would be fine if the amount it lowered goods by was greater, or if it increased demand for other community businesses, but I don’t think that’s the case.
Walmart isn’t hiring local accountants and lawyers, and they probably aren’t even hiring local plumbers or electricians.
People who aren’t from small towns dont appreciate that the efficiency and lower prices Walmart brings arent as valuable to the community as less efficient businesses recycling money through the community.
Correct the studies point out that prices do go down, but get cancelled out by other effects — mostly on local producers who can’t compete on price given Walmart’s scale and who may go out of business or as you suggest reduce economic activity.
I am always hesitant to say something is intuitive without evidence to back it up — common sense regulation is another — as there are plenty of studies which don’t end up supporting what we think intuitive. Studies such as these can and should be used by communities — particularly small and rural ones — to assess what businesses they want and how to determine what policy decisions work best for them.
It’s possible that population aging is the bigger driver of lower rates of firm entry/exit, since older people are probably less likely to join or found a startup.
I can’t remember it off the dome, but I think the average age of startup founders is surprisingly high. This could just be because the young ones leading the charge bring in more experienced people early on, but still worth checking
The work of the Australian Productivity Commission in this space is really interesting, and much more epistemically humble than the neo-Brandeisians! They point out that these phenomena seem to be related and are definitely upstream of declining productivity growth.
But they also say that it's unclear which trend is causal (e.g. lower firm entry leading to increased concentration vs higher concentration blocking firm entry) or if it's all being caused by something else. As you say Tyler Cowan et al. are pushing slowing population growth and population aging as a cause for a more risk averse and less dynamic economy. We need more work in this space!
Google search, perhaps the most impenetrable corporate moat in human history, was thoroughly upended by OpenAI (by comparison an Infinitesimally small startup). I'm not convinced that the US tech sector is becoming too sclerotic due to concentration.
I more meant outside the US tech sector, and in smaller markets in particular.
I'm in a smaller city on the periphery of the American Empire. We used to have our own banks, stock exchange, news media, insurance companies, major grocery chains and manufacturing businesses.
Now every market is nationalised with consumer goods and services provided by a small group of national chains headquartered on the other side of the country. Manufacturing has all gone offshore. And all our tech, high finance and media is imported from the US. We're left as a mining and energy hub, and if you don't want to be in that game you've got to leave.
The boring David Ricardo comparative advantage argument is this makes everyone richer, but it also means that my city lacks a sense of independence or uniqueness. Because we're consuming the same services and media exported from the superstar cities as the rest of the world.
Matt admits that he is a very literal person, and this article is an example of it. But being very literal can be useful at times, and he provides that use here, while alongside observations like yours.
This is very sloppy.
The necessity and scope of lobbyists is just taken as a given.
That is not actually a base state of existence.
In the 2024 cycle for example, pharma companies donated 16 million dollars to Political action committees.
This entire post entirely ignores the aspects of money talks and the size of lobbying.
We never get any reference to Citizens United.
(I edited this to change "existence" to "necessity and scope." A lot of my responses seemed to think I wanted to ban lobbying which isn't what I meant, that is both impractical and against free speech. My point, which I clarified in later responses, is that the US is structured in such a way to privilege outside lobbying, from self interested industry "corporations" in the context of the post to "the Groups." and that it doesn't have to be this way.)
I would like a group of us to band together and create a documentary critical of JD Vance. We'd have to raise some money, hire some talented creative artists, maybe even get a famous actor to do voice-overs. It will be terrific. We want to time the release of this documentary to have the most impact -- say, 2 months before the next election. We'll sell tickets in theaters and also sell the rights to Netflix.
What I just described was illegal and could have resulted in our prosecution prior to Citizens United.
I would like to propose an exception to the First Amendment that outlaws any blithe, sloppy criticism of Citizens United by anyone who hasn't tried to think though how they would design and administer a system where some corporations aren't allowed to engage in political speech, while others, such as those that make documentaries, are.
Buttigieg jumping on the dumb populist anti-Citizens United was especially disappointing. Surely he knows better.
Popularism supporters when the popular position is something they disagree with on the merits: 🤯
I would simply allow good-faith political criticism, and not allow bad-faith political criticism.
To simplify, just outlaw non bona fide criticism.
And who would decide which is which?
I'm pretty sure that was a joke . . . . (The "I would simply" opening is a routine formulation of Matt's, particularly on Twitter, when making sarcastic/joking comments about policy.)
Fair. It can be so hard to tell sometimes online.
Ha, this was sincerely clarifying for me, thank you.
A lot of people who criticize this case don't understand just how radical and suppressing the narrow question at hand was.
The instant I saw the headline of this article, I was all ready to post that any group of people that organize to spend on politicking is highly likely to form a corporation to do it, and a non-profit one at that--just like the group Citizens United is. It figures that someone would beat me to it, as usual. Easily one of the most misunderstood usages of the word corporation out there.
I don't think that is true, at least not according to my wikipedia-level understanding of Citizens United. They filed a complaint about Fahrenheit 9/11, claiming it violated McCain-Feingold, but since that law prohibited electioneering communications via advertisements and Fahrenheit 9/11 was a movie produced by a bone fide production company, it did not violate the law.
Citizens United later set themselves up as a bone fide production company and made some (really bad) documentaries, but then ran afoul of the law because of their advertisements promoting their documentaries which, if memory serves, really were just thinly-veiled political ads, like "Here are all the terrible things Hillary Clinton will do if elected... and also you should see our documentary". My recollection was that they were more-or-less trying to use the "bone fide production company" ruling as a workaround to run political ads with outside money.
Also McCain-Finegold was enforced by civil monetary penalties imposed by the FEC, so I'm not sure "prosecution" is a fair characterization.
The two of you are basically describing the same thing, and it's bad. No government should ever be able to decide what is "a bona fide production company". Especially considering who would be in charge of deciding that right now!
I see what you're saying and I fully agree with the sentiment, especially vis-a-vis Brendan Carr. Though I would also point to the perversion of civil rights laws under the current fascist regime and suggest that it doesn't negate their necessity or undo their positive historical impact.
But I don't think that is what Citizens United was about. The FEC didn't say that Fahrenheit 9/11 was acceptable because it was produced by a bone fide production company.
Citizens United argued that Fahrenheit 9/11 was an advertisement even if Michael Moore called it a documentary and McCain-Finegold prohibited electioneering communications by way of advertisements paid for by incorporated entities. But the FEC reasoned that the claim that it was a documentary was substantiated by the fact that it was a movie produced (which here means paid for) by a production company.
Citizens United then went and became a production company and made documentaries, which the FEC had no problem with. It was, and again, this is just my recollection, the fact that they were clearly using the ability to take out ads to promote their documentary in bad faith as a workaround to the law that got them in trouble.
I think that pre or post Citizens United you could absolutely make a documentary about a politician and release within 60 days of an election and that you could use professional actors and promote the movie with advertisements. Where you would run into trouble pre-Citizens United is if your ads also promoted or impugned that politician directly. Now you can just get a bunch of rich donors to throw money at a 501(C) and open up a firehose of robocalls, text messages, TV spots, books, documentaries, social media content, etc.
Anyway, I'm just arguing the narrow point that I think claiming McCain-Finegold barred people from making documentaries about politicians and releasing them close to elections is factually wrong. I don't think characterizing the Citizens United decision as righting some horrible wrong that amounted to censoring political speech and violating the First Amendment is correct either. I think that decision re-interpreted the First Amendment by claiming that (apropos of today's post) huge corporations were just "associations of people" and therefore enjoy the same protections to their speech. I also think it is part of a broader right-wing project to give more power to (in the spirit of the comments section) capitalists by conflating the spending of money with the exercise of free speech.
Just to be clear the lawyers arguing for those campaign finance rules in front of the Supreme court literally said they could use those laws to prevent books from getting published that ran afoul of the law.
Let me understand the argument. Are you saying that the US didn't have a functioning democracy before the advent of Citizens United? Because there was a long history of competitive elections before that. When did we enter the period of darkness that CU let us escape from?
I made no such argument. Only that the law being challenged was an infringement on the First Amendment. The lack of a "functioning democracy" isn't needed as proof of government overreach.
We infringe the First Amendment all the time in pursuit of national goals. What specifically was the harm here that CU saved us from, and why was it felt necessary to overturn it, beyond misogynistic animus to the Clintons, which was definitely there.
The harm was that people's voices were silenced to protect politicians from criticism.
Is this actual people or “people” in the legal sense of corporations as people.
In a country with free speech, on what pretext do you think "lobbyists" can be banned?
this is on the order of the naive fulminations against political parties.
Lobbyists are more attached to another, less discussed First Amendment clause: The right to petition the government for a redress of grievances.
Ah yes, that indeed.
What would a world where lobbying wasn’t a thing look like? If there was some proposed legislation on some highly technical or specific matter, would the hope be that our octogenarian legislatures would just happen to know all relevant details?
There used to be a thing called the Office of Technology Assessment, its job was to research and brief congress people on specific technical issues.
It was killed in 1995 by the Republican Congress because it was really bad for American business interests for congress people to have an alternative, neutral, source of information.
And the killing was wildly successful!
30 years later, a smart, rational person such as yourself can apparently see lobbying as the only effective means of informing technical legislation.
The basic logic, touted on this blog, that says it's cheaper and better for cities to have their own civil engineers and associated professionals on staff, rather than relying on outside consultants, applies to legislators.
Congress people should have a lot more money (from the public purse) to hire staff to research these topics.
Without said moneys or government research institutions, these congress people are reliant on lobbyists.
your answer does not answer his question - there is nothing that precludes State Capacity (having internal expertise) from having lobbying. Lobbying exists in EU countries which are not lacking in that internal capacity in general.
If one has free speech one will have lobbyists.
The fact many countries in Europe have that internal capacity and the US doesn't tilts the playing field much more on our side of the Atlantic.
It is a feature that suggests much more corporate power in the US, (Similar features include the collective sectoral bargaining that some European countries have)
I should have rephrased my first post. I wrote "existence," but I feel like what I should have written was "necessity." Lobbyists exist in European countries and that is fine. I am not thinking to ban the activity.
But, to go back to my example, imagine a city, city A, that was, by law, forbidden from having in house civil engineers.
Imagine people have lived in city A for so long that when they hear that another city, City B, DOESN'T rely on outside consultants for civil engineering, that they are absolutely flabbergasted! City B bans outside consultants!
Except it doesn't, it just structures their system so that they aren't RELIANT on outside consultants.
“The fact many countries in Europe have that internal capacity and the US doesn't tilts the playing field much more on our side of the Atlantic”
The vast majority of Americans would not be happy living in Europe’s economy.
"Europe" is a big place. Drop Americans in Zagreb, Croatia... maybe not. Drop them in Basel, Switzerland... I think they'd be quite happy about it.
The implicit argument you're making seems to be that "Outsized influence of lobbyists in the US relative to Europe ---> Better economic indicators in the US relative to Europe." That seems like a big claim.
I think this runs into issues with our federalized system though. I have to work with providing impact assessments to the state government on proposed legislation (sometimes, minor part of my job), and it really isn't reasonable to expect every state government to have staff on hand that can evaluate the impact to every impacted business for every piece of legislation. There are very seemingly minor pieces of text in every bill that have significant effects on the difficulty of implementation for the affected businesses or groups; lobbying allows the affected people weigh in and try to make sure the bills don't have unintended consequences that a set of 50 different analysis offices could not possibly have caught.
I think it'd be great if we had that office back, but it doesn't eliminate the need for lobbying to ensure we don't end up with wacky legislation that kills our economy.
You do realize that US states are the equivalent of countries in terms of money and size?
Like California and the country of Sweden have roughly the same budget.
My point wasn't about eliminating lobbying, (I went back and edited the original comment), it was about how the US has set up the systems and purposefully destroyed government capacity so as to make lobbying a NECESSITY.
That was a choice.
That was legislators saying "State capacity should be slashed to privilege Corporate power"
They weren't secret about this goal when they killed the Congressional Technology Office.
You'd think Matthew Yglesias, who in many respects is a great proponent of "state capacity liberalism" would know this.
In 2024, $9.5 billion was spent in congressional races, and the presidential race was $5.3 billion. I'm kind of amazed *only* $16 million (~0.1%) was spent by pharma.
https://www.opensecrets.org/elections-overview/cost-of-election
If their guy wins and grants them policy that yield far more than $16 million then it was a smart investment. There's no way that pharma could provide the money that by itself would elect all their favorite candidates but if they in collaboration with other corporate interests tip the balance and then each gets its reward from the winners, then it was a very good strategy.
My understanding is that corporate returns from political decisions (like the OBBA) far exceed their contributions, so I grant you that it is a good question why political campaigns as a whole don't cost ten times as much, given the returns potentially at stake. But I guess there's just a limit to how much money can be spent in a campaign.
That number is only PAC spending. It's from here. I was trying to find the total number broken down by industry, but they only did that for the PAC spending.
https://www.opensecrets.org/political-action-committees-pacs/industry-detail/H04/2024
Fair. Health is listed at $52m in total fwiw. This is probably not the most useful way to quantify (attempted) influence.
> In the 2024 cycle for example, pharma companies donated 16 million dollars to Political action committees
I had to re-read. Just 16 million? Peanuts.
I think it's looking at only PAC spending, not total campaign spending. I would love to have a total spending number.
https://www.opensecrets.org/political-action-committees-pacs/industry-detail/H04/2024
What you often see as the "corporations giving money to candidates" is "people who donated money to a campaign and listed a pharma company as their employer."
And the media is extremely lazy about just accepting this.
"In the 2024 cycle for example, pharma companies donated 16 million dollars to Political action committees."
And unions spent over 700 million. What's your point?
Yeah I'm not sure how you write this many words on this topic and don't mention citizens united.
Probably because Citizens United was correctly ruled and will not be overturned in any foreseeable future.
Agreed. think anyone interested in the case really ought to read the oral arguments. The government went in and argued that the sections of McCain-Feingold at issue could have been used to suppress books. I also don't think people fully understand the facts. John alludes to them above but they go back even further. Citizens United had challenged distribution of Fahrenheit 9/11 as electioneering. Fahrenheit 9/11 ended up being permitted as bona fide commercial activity while some conservative movie they made at the time ended up being restricted. They then spent the next 7 or 8 years making movies to establish themselves as bona fide commercial film makers, like Michael Moore, and ended up restricted again on Hilary: The Movie, which is why they sued. It's very much a case about a form of prior restraint. I don't understand how anyone thinks it could have gone any other way.
There is a fair criticism on strict procedural matters that the majority answered more than they needed to to resolve the case at hand when they set it for reargument. But the broader question was going to get challenged very soon anyway.
Yea I've heard that criticism as well, and maybe so maybe so. I kind of think the facts were sufficiently before the court that it was hard not to deal with the core issue of the FEC making judgment calls about content (or really who created the content) but ymmv as to exactly where the court should have drawn the line on how much of the statute was unconstitutional.
In any case it's worth remembering that portions of McCain-Feingold survived, including on direct contributions and the 'I'm so and so and I support this ad.' People seem to think it legalized big businesses handing politicians suitcases full of cash, which it very much didn't.
Also, the disclosure requirements were upheld, with Thomas being the only justice who would have struck them down.
I really hope that I'll get to read the papers from John Paul Stevens on all the campaign finance cases of the aught, because he was always extremely critical of any argument that anything regarding this issue could be unconstitutional. I've always suspected that his stridence influenced other justices away from showing any nuance in the cases.
This goes all the way back to the originating case of Buckley v. Valeo, which he didn't officially participate in but had just arrived on the Court, and he made it clear that he would have firmly joined Byron White in holding that any regulation was constitutional. Interestingly, he was on the opposite of who he replaced in William O. Douglas.
For me, I always thought that Buckley v. Valeo got it right all along in drawing a bright line between contributions and expenditures. And as it would be, we're coming up on the 50 year anniversary of that ruling--the Volokh Conspiracy has been doing a symposium on it this week.
"The previous state of affairs was bad" is not incompatible with "the current state of affairs is also bad". I'll cheerfully concede the previous state of affairs was untenable, but I'd argue the current status quo is in need of further adjustment.
Worth noticing that's it's the "oligarchs" who have bent the knee to Trump, not the other way around.
Isn't this how oligarchy always works? Bend the knee in public, pull strings in secret.
Trump is their puppet?
Boy, would that cry out for [citations needed].
I just mean "pull strings" as in receive favors and kickbacks.
(I just realized that the etymology is from puppets. I've only really heard it in the context of an uncle getting his deadbeat nephew an entry level job at the uncle's company.)
Yes, string theory is very dense and hard to understand.
But the strings go both ways, and the more autocratic the leader, the harder he can pull on his end of the string. Consider the relationships between oligarchs and president in Russia.
I take MY’s point that critics of “corporate power” should be specific about what they mean and how they measure what they are talking about.
With that being said I don’t think MY steel-manned these critics of “corporate power” loosely defined. I don’t think that they are primarily concerned with aesthetic issues of “corporate-ness”, or that they necessarily are indifferent about the role of corporations in the economy.
While there may be some of that, there could also be legitimate concerns over anti competitive behavior. Or practices that harm consumers. Or undo corporate invoice on legislation. Or environmental concerns. Or labor concerns.
Neobrandisians don't want to make emperical claims that effect positive, useful change. They want to be mad.
Aside from the big, obvious thing you ignored (Citizens United and money in politics), the frustration I see among my friends of this persuasion is that large companies can flout the law.
Monetary damages for flagrant violations tend to be less than the profit from those violations. Class action suit payments come out to tens of dollars per individual impacted. It's incredibly rare for board-level individuals for large companies to go to prison for what a company does. Meanwhile mom-and-pop businesses are routinely closed entirely for code violations.
Are there plausible justifications for some of this? Sure. But it's tough to argue that it isn't an immense form of power.
There’s this idea called “efficient breach” that sometimes it’s good to violate a contract if the benefit of doing so is greater than the other side’s damages—the same ought to apply to regulations. Monetary damages should be set equal to the actual damages caused and if companies violate and pay that’s efficient breach.
Class action suit payments are that low because the plaintiffs’ lawyers take huge cuts, and most class actions are ridiculous (e.g. the claim in the Concepcion case that led to the Supreme Court upholding arbitration agreements was that the plaintiffs had to pay sales tax on free phones they received). It would be better to hire a lot more regulators and put them in charge of requiring changes instead of having class action litigation by greedy plaintiffs’ lawyers.
I don’t think it’s a good idea to put employees in prison for legal violations by their company, short of things like sending a hitman to kill another company’s CEO or something. The law that applies to business can be very broad and vague and sort of relies on prosecutorial discretion to decide what to punish, and there are even situations where laws are contradictory and you can’t comply with all of them.
I object to equating legal regulations with general contractual obligations. If efficient breach makes sense for something we actually don't want companies to do, that's an indictment on the regulations. If someone commits robbery, they don't get to skip punishment by returning what they stole; why on earth would we structure corporate law that way?
I agree that class action suits are a really inefficient way to handle these types of things, and better regulatory structure would be much better. But given that it'll take immense work to get the civil service back where it was pre-Trump, I'm not holding my breath.
If I understand your last paragraph, the argument is "corporate law is very complicated therefore we should be leery of enforcing it". Which seems very similar to saying "tax laws as applied to very wealthy people are complex and therefore we either shouldn't audit them or should give them the benefit of the doubt when we do". Or possibly "we've made an unholy mess of immigration law therefore it shouldn't be enforced". In all these cases the solution is obviously "write better laws".
That said, I'm not suggesting employees go to jail for the equivalent of speeding tickets; I'm suggesting that employees go to jail for the equivalent of grand larceny.
I can easily measure corporate power in my own life: it’s how often my boss can tell me what to do, and what happens to me if I stop listening.
One can also measure how quickly a person becomes broke, cold, or homeless after parting ways with their employer. That is the relevant metric. A boss’s warts are far more tolerable if being fired doesn’t mean privation.
On this view, the best proxy for “corporate power” is its inverse: how well the state protects people when they are unemployed. Where exit is cheap, corporate power is weak. Where exit is catastrophic, corporate power is strong.
I like the sound of that at first, but surely there are alternatives to “your boss” and “government protection?” David, where do you put “go work for myself” or “go work for a competitor” in your equation? Does that just circle us right back to “make rules to protect competition and market entry” with the government a player but not the dominant force?
By that measure corporate power would decrease if people had more liquid savings? That makes sense. It's like executive compensation - if someone is 45 and has made enough money to decamp to a golf course in Naples permanently then they can demand a lot more money.
Liquid savings absolutely decrease corporate power, as do food stamps or unemployment that protects fired (as opposed to laid off) employees
The issue with liquid savings is that it’s not scalable. You can’t have a society where everyone lives on savings and no one works (or people work only for fun).
Liquid savings doesn't mean being independently wealthy, it might mean a 6 month emergency fund. It's an amount of money such that a layoff or being fired doesn't result in immediate destitution and a desperation to take the first job available.
security is roughly a function of the natural log of one’s wealth. ergo, making petit bourgeois wealth (or its welfare state equivalent) universal maximizes security
The best way to fight corporate power is an unemployment rate that never exceeds 2.5%.
I believe that's below the natural rate of unemployment. So then you would get more immigrants and those jobs would get filled and that rate of unemployment would go up.
Despite its name the natural rate of unemployment is not a law of nature. As estimated by the CBO it was as high as 6.3% in the late 70s; they now put it at no greater than 4.5%. Given how inflation plunged in 2023-24 without a surge of unemployment, that number is probably far too high.
Would 2.5% unemployment be super inflationary? Maybe. Probably? But lower unemployment would be great for working people and a steady inflation rate of 3 or even 4% would not be the end of the world.
> what happens to me if I stop listening
Best way around this is not start listening in the first place.
Try that as a young job seeker with no trust fund. Bad strategy!
Well, you can insulate yourself somewhat with marketable skills and an emergency fund. But the whole thesis of progressive taxation is that people should not have excess discretionary income to save, it’s impossible to buy health insurance cost-effectively as an individual, and the Medicaid asset limit is like $2,000.
The medicaid asset limit has carried forward from the 1960s. It’s more an anachronism that the pulse of progressive politics.
If progressives had their way there’d be universal healthcare. If conservatives had their way then the market price of an office visit would probably be too much for an indigent but within the realm of reason for a recently unemployed professional. Market failure + stingy welfare state is a creature of the slow boring of hard boards.
I’m as unsympathetic to the anti-monopoly lunatics as the next guy, but I do think it’s at least *possible* to imagine what they might be talking about. (And why it would be hard to measure in the cross-section/time series.)
I think it’s something like
Bigness + (possibly) control of a salient technology => Political bargaining power.
So, e.g., Meta’s massive resources allow it to influence politics. Because Instagram is so salient in our lives, this is particularly detrimental to the People (e.g. because we watch more slop videos). If Meta were smaller, the People would be able to fight back against slop via the political system.
This is kind of conspiratorial, but does it have any particular implications for something we can measure in Oregon vs Michigan? It’s not about market shares, markups, or anything like that. It’s about a political counter factual.
To take things to the extreme: imagine an AI company raises a robot army that rivals the US military. Clearly this is power, but what would the measurable outcome be? I have no idea. AI corp would have more political bargaining power, but its power would likely be international rather than local.
But didn’t Silicon Valley lose in 2016, win in 2020, and (maybe) split in 2024, all by a sliver? It seems that Silicon Valley has less electoral power than RFK jr.
Yeah, I agree. I don’t think that corporate power is actually a big problem right now. (It seems like Trump has leverage over corporations rather than the opposite.)
But my point was that “is corporate power higher in Oregon or Michigan?” is not really an insightful gotcha, given what these anti-monopoly people have in mind.
We have historical examples of corporations with armies that became de facto states like the VOC, British East India Company, etc…
The East India Company was always at the mercy of a state, though. Just not any state in India. Parliament had no trouble shutting it down when they decided to shut it down.
"no trouble" is doing a lot of work here. This was a long-standing political argument for a long time, and heavily influenced by the Indian Mutiny and the failure of the East India Company to keep things going in a stable way.
Sure there were political arguments, but no one in the EIC suggested, "We rule over in India! Let's move there with our families and continue to run the nation as its government and Parliament can go hang."
More recently, and in this country, corporations hired private militias like the Pinkertons to control their employees.
The problem is that you have to imagine it. And the danger is that a lot of other imagined items come along for the ride. Yay populism.
Power is multifaceted and not subject to a single measure like emissions. But for some clear examples of corporate power you can just look to how Musk bought Twitter and completely “vibe-shifted” the whole world by doing so. It is true that managers of publicly traded companies under a fiduciary duty to maximize investor gains may be limited in their power (which is why Twitter’s owners were basically legally required to sell to Musk when he offered so much above market value), but it seems undeniable that an ultra-rich person in charge of at least certain types of corporations could have a lot of power.
How is this any different from a newspaper? It’s been done for hundreds of years.
It seems like there are clear measures to me. The amount of money spent by corporations on lobbying and Super PACs. Market consolidation. Rates of anti-competitive or anti-consumer behavior.
Then there’s hazier but still important stuff, like Amazon’s influence on consumer markets or Meta’s influence on the media.
People talk about Teachout being anti-free enterprise. I don't think that's accurate in the sense that they want the government to run everything.
At its most fundamental there are kids in college who want to help people. It's 12 degrees today and America's natural gas drillers and petroleum geologists and pipeline engineers are keeping millions of Americans from freezing to death. And they earn a good living doing it.
But for many kids that's not the right kind of helping people - it's not an housing or arts non-profit. What someone like Teachout wants is a world run by the types of people who think of helping people in those terms. Not those "dirty" uncaring guys keeping us all from freezing to death.
Your comment here makes me think of possibly my favorite single passage from Bastiat's writing, which is sadly too long to post here. Go to page 44 of the PDF here (page 3 of the text) starting from, "Let us take a man belonging to a modest class in society," and read to page 47 of the PDF (page 6 of the text), ending with the line, "In truth, could all this have happened . . . .": https://files.libertyfund.org/files/79/0187_Bk.pdf