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In our November/December issue, Zach Carter reviewed Barry Lynn’s new book, Liberty From All Masters. In this exchange, Lynn takes exception to some of Carter’s critique, and Carter responds. This discussion sheds light on some fundamental questions about how to assess and remedy the problem of economic concentration, and whether free markets once purged of monopoly power are in fact efficient.
Response to Carter’s Review of Liberty From All Masters
It’s an honor to have Zach Carter review my latest book, Liberty From All Masters. He is one of America’s brightest young writers. It’s clear that Zach admires large portions of Liberty, as well as the larger project of the Open Markets Institute, the organization I founded to help protect democracy from unaccountable private power. Unfortunately, Zach’s review appears to misinterpret key aspects of my book and our work, and key tenets of the American democratic republican tradition that Open Markets aims to revive. These include:
My conception of markets. Zach holds that I believe “markets can work beautifully once we purge them” of monopolists. To be clear, I have always loudly insisted that markets are not mechanisms but political constructs. In Liberty, I detail how Americans used to deliberately structure markets to achieve particular political and social ends.
My understanding of the role of price. Zach writes that the economist John Maynard Keynes disproved my conception of how prices carry information within society. To be clear, I have no beef with any aspect of Keynes’s theory. My beef is with those who defend price discrimination by monopolists as being “efficient,” including the antitrust professor and federal judge Robert Bork. When I write about prices, my goal is to detail how price discrimination and manipulation by Google, Amazon, and other dominant corporations can disrupt the ability of citizens to communicate how they are treated by these powerful actors, hence to work together to protect themselves.
My understanding of the nature of “capitalism.” Zach holds that I aim to revive “true capitalism.” To be clear, as I write repeatedly in Liberty and elsewhere, I don’t believe in “isms.” Instead, I detail how citizens can structure corporate power and markets in ways that will enable them to make safe and smart use of capital for the benefit of society.
My definition of the “left.” Zach holds that I pin monopolization on “leftists” who opposed “deregulation” and battled globalization. To be clear, I take pains in Liberty to distinguish between a “left” that promotes systems of top-down control by the state, and populists who advocate bottom-up systems of governance. The populists are my friends and allies. My target in Liberty is the highly influential economist John Kenneth Galbraith—who did advocate a command-and-control economy—and his acolytes and defenders.
The timeline of America’s monopoly crisis. Zach holds that I claim the “first stage of monopolization began in the late 1990s.” To be clear, I write that the first stage of monopolization began almost immediately after Ronald Reagan took office in 1981.
Our relationship with Josh Hawley. Zach writes that Open Markets has recruited “conservative allies” to our project, including Josh Hawley. To be clear, neither I nor any current member of our team have ever had any truck with Mr. Hawley.
I am sure my own shortcomings as a writer are partly responsible, and for that I beg pardon. But I fear a second factor may also have played a role in Zach’s many misinterpretations: a resistance to fully examining how certain progressive beliefs helped to create and foster the monopoly crisis we face today.
Since the founding, two core ideas of the American republican tradition have been that the political economy is entirely a human creation, and that a main purpose of government is to break and harness power in ways that protect liberty and democracy, and promote equality. In this republican tradition, citizens achieve these political ends by using the state to limit the size and behavior of corporations and to structure markets and competition. Put another way, citizens use anti-monopoly to achieve the goals of the Declaration and to extend the checks and balances of the Constitution into the political economy.
When I first began to warn of the dangers posed by monopolists, more than 20 years ago, what most surprised me was that so many educated Americans across the political spectrum could not see the concentrations of power I described. That’s why from the first I focused on the role that ideologies designed to hide or excuse concentration of power played in clearing the way for the monopolists.
In Liberty, as in my previous books Cornered and End of the Line, I place much of the blame on the ideas of Bork, who said anti-monopoly law should be geared not to promote liberty and democracy but “efficiency.” I argue that Bork designed his libertarian philosophy—often called “consumer welfare”—precisely to subvert America’s traditional republican approach to regulating power.
In the last few years, this argument has broken through. Some academics continue to defend Bork’s philosophy. But the Senate and Federal Trade Commission have hosted hearings questioning the fixation on efficiency. And many key members of Congress, the judiciary, and the enforcement community have abandoned the doctrinaire view of the last 30 years. So too, in a recent editorial, has The New York Times.
But recognizing the extreme anti-republican nature of Reagan-era libertarianism brings us only partway to restoring democracy in America. To reckon honestly with the origins of our nation’s monopoly crisis, we must also examine the role played by two non-republican beliefs common among many progressives.
First is a fondness for concentrated power, both in the large corporation and in the state itself. In the years leading up to the Reaganite coup, the most influential advocate of such concentration was Galbraith. Like Bork, Galbraith and his followers argued that monopoly is “efficient.” Like Bork, Galbraith offered only the most simplistic of plans for governing that power once concentrated, in Galbraith’s case through a vague system of “countervailance.” In 1981, when Reagan proposed his overthrow of anti-monopoly law, Galbraith acolytes such as the economist Lester Thurow not only applauded the move, but encouraged Reagan to go further.
Second is the widespread belief among many progressive thinkers that various “natural” forces help determine economic and social structures in ways that, at least in part, fall outside human control. Think “globalization,” “capital-ism,” “the market.” One problem with such thinking is that it hides the political decisions—such as those by Reagan’s team in 1981—that make concentration of economic power possible.
That’s why, pretty much as soon as I began to focus on Bork’s ideas, I also became fascinated with the teachings of the community of thinkers at The American Prospect. Robert Reich and Bob Kuttner are heroes in many respects, and I deeply admire both. But their Prospect was for many years a place that served a unique cocktail that combined all three of these non-republican philosophies of power.
This is easy to see if we look at the writings of Reich, a close student of both Galbraith and Bork. Reich’s widely read 1991 book The Work of Nations is one of the most extreme libertarian works ever penned by a Democrat. In it, he argues that globalization and new technologies had largely destroyed the power of the private corporation and even the nation-state itself. In subsequent years, as Walmart and other corporations unleashed by Reagan’s coup grew immensely powerful, Reich depicted these monopolists as little more than agents of the consumer, with no political interests of their own. His message, in essence, was “Don’t worry, buy happy.”
That’s why in End of the Line in 2005 and in Cornered in 2010 I identified his weird intellectual concoction as a prime source of America’s monopoly crisis.
In a 2015 essay in the Prospect, Reich did something extraordinary—he admitted he’d been wrong. He said that for 25 years he had overlooked “the increasing concentration of political power in a corporate and financial elite.” Ever since his mea culpa, Reich has been one of America’s most brave and effective fighters against concentrated private power. Better yet, his admission stands as an instructive challenge to anyone who continues to ignore the problem.
Sadly, Zach fails to take Reich’s cue. Instead, he tries to lead us back into the same fog of abstraction that helped to hide power for so many years.
Nowhere is this more obvious than in his effort to blur the difference between Galbraith and me. Despite the fact that Galbraith promoted top-down rule whereas I advocate bottom-up systems of control, and despite the fact that Galbraith held that anti-monopoly law never worked whereas I believe it worked remarkably well for most of the 20th century, Zach writes that Galbraith and I are “more closely aligned” than I acknowledge.
In The General Theory, Keynes famously wrote: “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”
Galbraith did many good things. But in this moment of grave crisis in America—a crisis clearly made worse by concentration of control in corporations such as Facebook and Google—it is vital that we don’t waste time defending someone whose teachings continue to blind many progressives to the dangers of unfettered private power. We must see, understand, and fix the political economic structures that threaten our democracy and society. If that means breaking the philosophical frameworks built by the last generation of “progressive” economists, then break them we must.
Response by Zach Carter
I have few complaints about Barry Lynn’s gracious response to my piece. Discerning readers can, I think, judge for themselves among the evidence presented regarding our disagreements, which are not, in the grand scheme of things, terribly great. Barry is correct to state that I see much promise in his project.
I ask only a few points of clarification. I do not believe or allege that Barry has recruited Josh Hawley to his operation. Indeed, I and many others can attest that Barry expressed concern about Hawley and his agenda long before the senator from Missouri helped incite a violent attack on Congress itself. Writing several weeks before that attack, it was not my intention to tar either Open Markets or Liberty From All Masters with what Hawley has since become.
But it is nevertheless the case that Barry’s ideas have found favor with Hawley and with other high-profile figures on the right. And I do believe that much of the enthusiasm for anti-monopolism today stems from its political viability with the American right. People who do not want to listen to liberals talking about social justice or inequality will listen when somebody in a nice suit talks about competition. This is not just a matter of style. Barry’s ideas about the price system—that by eliminating price discrimination we can reveal important truths about public preferences—come from a very conservative place, and he cites Friedrich Hayek with approval in Liberty From All Masters. When Barry explicitly harkens back to “America’s traditional system of capitalism” in the book, he is invoking a conservative ideal.
As I noted in the original review, Barry is correct to note that John Kenneth Galbraith expressed a well-documented hostility to antitrust laws. He did not, however, object to reining in large corporations when they act contrary to the public interest. Barry embraces regulation and, in the narrow set of appropriate cases, nationalization, as remedies to monopoly. These are precisely the antidotes Galbraith proposed for big, abusive business. While Barry denounces Galbraith for advocating “top-down” solutions, his own anti-monopolism can only really be sustained by embracing similar approaches.
If anti-monopolism is to be exclusively a project of breakups and competition, it is an inherently conservative project that will, I think, fail. If it is a more comprehensive project embracing regulation in the public interest, then the distinction between anti-monopolism and run-of-the-mill liberalism is not so clear. Once that distinction has been blurred, the ability to persuade the right to join the party will, I think, disappear.
I encourage readers to examine Barry’s book and decide for themselves.
