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The Corner Newsletter, December 25, 2018: Happy Holidays — Best Anti-Monopoly Books of 2018 — The WWW Award

Happy Holidays from The Corner. In this special edition, we recommend the best anti-monopoly books from the past year, share a few articles that illuminate ways monopoly can ruin your holidays, and nominate a new Brookings report for our new WWW award, for Worst Washington White Paper of the year. Also, we celebrate OMI Editorial Director Phillip Longman’s debut as a television cartoon character, in a new episode of “Adam Ruins Everything.”

December 25, 2018  |  by Open Markets

SPECIAL HOLIDAY REPORT

 

The Best Anti-Monopoly Books of 2018

The early days of winter are a great time to catch up on your anti-monopoly studies. The days are cold and drear, and the nights dark and long, which make smoldering anger and fiery prose a welcome addition to the home of any true believer in liberty and democracy. A few of our favorites:

The Curse of Bigness: Antitrust in the New Gilded Age, Columbia Global Reports, Tim Wu
An elegant primer for all to understand the thinking that underlays America’s anti-monopoly traditions and the many dangers of concentrated corporate power.

The Myth of Capitalism: Monopolies and the Death of Competition, Wiley, Jonathan Tepper with Denise Hearn
Tepper and Hearn use the growing body of social science research, indicating that America’s economy is structured to favor fewer and fewer corporations, to show how monopolies and oligopolies exacerbate inequality, cut growth and wages, and hurt entrepreneurs.

Globalists: The End of Empire and the Birth of Neoliberalism, Harvard University Press, Quinn Slobodian
A strong history of neoliberalism, including a chronicle of the post-World War I origins of the Geneva School of neoliberal thought. Slobodian details how the ultimate goal of neoliberalism is not to establish market relations and market logic, but to shield markets and private property from democracy.

The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power, PublicAffairs, Shoshana Zuboff (January 15, 2019)
Zuboff coined the term “surveillance capitalism” and in this book she details how platform monopolists use their systems to control and exploit an extensive range of human behavior, information, and experience for private gain.

Winners Take All: The Elite Charade of Changing the World, Alfred A. Knopf, Anand Giridharadas
A powerful critique of elite “thought leaders” who spend their professional careers consolidating power and control in the hands of the few, then pretend to make the world a better place through extracurricular activities like philanthropy.

Holiday TV Suggestions for the Anti-Monopolist

For those who’d prefer to veg in front of a screen, the Open Markets team suggests the following shows to watch this holiday season:

  • Adams Ruins Everything’s take on Airline Deregulation, featuring OMI Editorial Director Phillip Longman (TruTV)
    The fourth episode of TruTV’s hit show “Adam Ruins Everything” is titled “Adam Ruins Flying,” and it challenges common myths people have about America’s airline industry. One segment focuses on how America’s airline oligopoly and deregulation have harmed many of the nation’s smaller heartland cities and rural areas. Around the two-thirds point of the episode, Longman appears in cartoon form, speaking with eponymous host Adam Conover.
    You can watch the entertaining and informative episode on TruTV’s website (by logging into your television service provider) or on Hulu with Live TV. (To read more on the subject, read the Spring 2012 Washington Monthly article by Longman and Lina Khan, which lays out the shortcomings of antitrust enforcement and deregulation in the airline industry, here.)
  • In the third episode of “Adam Ruins Everything,” Adam Conover dispels myths that people believe about Big Tech corporations. 
    You can watch that episode on TruTV’s website (by logging into your television service provider) or on Hulu with Live TV. You can watch a clip from the episode explaining how tech corporations have taken public money to benefit themselves here.
  • The Comedy Central television show South Park has put out two episodes recently about Amazon and its immense power.
    In the first episode, “Unfulfilled,” South Park residents begin striking and protesting an Amazon Fulfillment Center’s inhuman costs on its workers.
    In the second episode, “Bike Parade,” South Park’s striking Amazon workers and the South Park residents who shop on Amazon come together to shed their dependency on Amazon. One leader tells CEO Jeff Bezos, “But humans are more than consumers!”
    Warning: Some of the language is especially crude and sexist. Viewer discretion is advised.

Articles for Those Long Holiday Trips

As you settle in to your airline seat this holiday, perhaps hoping not to get dragged off the plane for a minor complaint, you might want to read one of the following articles about how the Scrooges of Wall Street are conspiring against your family’s cheer this year.

“Why Some Kids Might Get Their Presents Late This Christmas” (Washington Monthly, Matthew Buck): There are only four major railroads that ship goods across the country. The article describes how one of them, steered by a single-minded Wall Street hedge fund, is exploiting its market power, making billions in the process, and ultimately hurting the manufacturers that have to ride their rails, and the kids who depend on them for their goodies.

Watch Out for the Skating Instructors’ Cartel
Want to learn to skate this winter? Well, the Federal Trade Commission is not making that any easier, given its recent effort to bust the ice skating instructor’s cartel. Phil Longman and Sandeep Vaheesan – in two separate articles – show how the FTC’s clumsy, one-size-fits-all approach to thinking about collusion is completely antithetical to the purpose of the antitrust laws and harmful to small producers and workers who can find solidarity and empowerment when they cooperate. Instead, they argue that antitrust enforcers should focus on neutralizing the power of large corporations and let small participants build theirs.
Read more in “The Case for Small-Business Collusion” (Washington Monthly, Phil Longman) and “Cooperation for the 99%” (Take Care, Sandeep Vaheesan)

American Skiers Get Wiped Out
Those going skiing this holiday season will likely have to pay more to stay with one of two ski resort operators: Vail Resorts and Aspen Resorts. The two dominate the North American skiing resort market. Florian Ederer, a professor at the Yale School of Management, shared a study of the market last Wednesday noting that the Justice Department has allowed the two companies to roll up more than 15 resorts in the last two years. The analysis suggests that the duopolists’ market power has allowed them to raise prices and skimp on food and comfort.

Worst Washington White Paper of the Year

The Open Markets nomination for the most egregiously wrong-headed think tank report of 2018, is “Strategies for Left-Behind Places,” a new white paper by the Brookings Institution that sets forth a narrative that was also picked up by New York Times columnist Eduardo Porter. We think the paper is worth reading for what it – revealingly – gets wrong about the growing concentration of wealth and business in a few giant American cities, and the stripping out of development from much of the rest of America.

According to this storyline, the growing wealth gap between elite coastal cities and heartland America is the inevitable result of digital technology which has “increasingly rewarded the most talent-laden clusters of skills and firms.” In other words, growing regional inequality derives from impersonal evolutionary forces that reward smart urban elites while crushing maladapted middle Americans.

The paper’s authors conclude that there’s not much to be done about the problem, other than perhaps to teach bankrupt farmers to code, and also ease up zoning laws in New York and San Francisco so more rural losers can “move to opportunity” in cities inhabited by winners.

Too bad the Brookings authors didn’t bother to read any of the growing body of work that links the strip mining of heartland and rural America to changes in antitrust and other competition policies that enabled predatory monopolies to concentrate wealth, power, and control in places like Wall Street, Silicon Valley, the City in London, and Shanghai.

The Open Markets team has pioneered much of the documentation of this process, mainly in the Washington Monthly. See for example, Phil Longman’s “Bloom and Bust” from the November 2015 and Brian Feldman’s  “The Real Reason Middle America Should be Angry” from March 2016. For an even earlier take on the subject, you can turn to the same Spring 2012 Washington Monthly article by Longman and Lina Khan, mentioned above, in which they lay out the shortcomings of antitrust enforcement and deregulation in the airline industry, here. (Also, be sure to keep an eye out for Claire Kelloway’s forthcoming piece in the January issue of the Monthly, titled, “How to Close the Democrats’ Rural Gap.”)

🔊 ANTI-MONOPOLY RISING:

  • District of Columbia Attorney General Karl Racine sued Facebook for violating consumer protection laws, in one of the first actions by a governmental law enforcer against the social media giant after the Cambridge Analytica revelations came out earlier this year.
  • Bruno Le Maire, France’s Minister for the Economy and Finance, announced that France would move up its implementation of a tax on large international technology companies to January 1, 2019. The tax is expected, according to the Financial Times, to include a tax on selling private data.
  • Sen. Elizabeth Warren, D-Mass., and Rep. Jan Schakowsky, D-Ill., introduced legislation in Congress on Tuesday calling for the establishment of an Office of Drug Manufacturing in the Department of Health and Human Services whose responsibilities would include manufacturing generic drugs when prices spike or there is a lack of competition.
  • Sen. Roy Blunt, R-M.O., in the wake of the latest news of Facebook’s abuses of user data, commenting on Facebook CEO Mark Zuckerberg, said, “I know he’s smart, but sometimes I think he’s got no sense … Congress is going to have to regulate them and stop this, and I hate to do it, but by God I will if they can’t clean up their act.”
  • Sens. Ron Wyden, D-Ore., and Richard Blumenthal, D-Conn.also criticized Facebook and Zuckerberg, with Blumenthal calling Facebook’s “unrestrained sharing of user data … the privacy equivalent of the BP oil spill … ongoing, uncontained & toxic. We will be paying the price for decades.”
  • Sen. Richard Blumenthal, D-Conn.sent letters to Justice Department antitrust chief Makan Delrahim and Federal Trade Commission Chairman Joe Simons asking them to investigate Amazon’s use of “most-favored nation clauses,” which forbid third-party sellers that sell their products on Amazon from selling their products for a lower price anywhere else. Blumenthal also noted that Europe had opened a similar investigation into Amazon in June 2015, and closed it when Amazon subsequently ended the practice there, but not in the U.S.
  • Twenty-two consumer and children’s groups filed a complaint with the Federal Trade Commission last Wednesday calling on the enforcer to investigate how Google markets apps to children on its Google Play store. The groups, including Color of Change, the Electronic Privacy Information Center, and Public Citizen, want the FTC to look into apps’ allegedly gathering location and other personal data on children without parental permission. That same day, Sens. Edward Markey, D-Mass., Richard Blumenthal, and Tom Udall, D-N.M.also called for an FTC investigation into the practice.

📝 WHAT WE’VE BEEN UP TO:

  • Matt Stoller wrote an essay for Democracy responding to a feature on “Progressive Labor Standards” by Nick Hanauer. Stoller said, “Hanauer is recognizing that markets and corporations are socially engineered human institutions, and that re-moralizing our political economy is the essential path forward for Democrats. Fundamentally rebuilding our democracy means engineering our corporations and markets to enable the freedom of the producer from the domination by the monopolist or financier.”
  • Claire Kelloway covered the Institute for Local Self-Reliance’s new report on the pervasion of dollar stores in low-income and rural communities for Civil Eats and wrote about the concerning consequences that has for public health.
  • Lina Khan and Sandeep Vaheesan authored articles for the Take Care blog. Lina wrote about steps the country could take to address monopoly power across the economy emphasizing, “Reforming antitrust law will be a key part of tackling undue concentrations of market power, but—as a law enforcement regime—antitrust itself will only get us so far. Harnessing this more expansive set of anti-monopoly tools will be critical for addressing the full scope of our monopoly problem.”
    Sandeep criticized antitrust enforcers in his article, writing, “Tolerance of monopoly and oligopoly and antagonism toward the powerless define contemporary antitrust in the United States.”
  • The Freedom From Facebook coalition joined 30 other public interest groups in a letter calling for Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg to step down from Facebook’s board of directors so long as they remain in their management positions. The groups also called for Facebook to appoint “an independent and permanent civil rights ombudsman” to review Facebook’s policies for their civil rights implications. The letter was covered in The Wall Street JournalPolitico, and Business Insider.

Written by: Barry Lynn, Phil Longman, and Matt Buck
Edited by: Barry Lynn, Phil Longman, and Matt Buck

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In America today, wealth and political power are more concentrated than at any point in our country’s history.

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