The Corner Newsletter, January 9, 2020

Welcome to The Corner. In this issue, we announce the creation of Open Markets’ new advisory board and present a conversation between Demos President Sabeel Rahman and Open Markets researcher Udit Thakur.

Open Markets Announces New Advisory Board to Help Guide Fight Against Monopoly

The Open Markets Institute this week announced a new, 12-member academic advisory board to help guide and advise Open Markets’ research and policy work. These lawyers, economists, and advocates have all played leading roles in reshaping public debates on America’s monopoly crisis. The board includes some of the world’s top experts in digital monopolies, communications law, labor and employment law, and intellectual property law. We expect the board will work closely with other members of the Open Markets team, including OMI’s legal team of Sandeep Vaheesan and Sally Hubbard, and advisory board members. The full list of our new advisory board members can be seen here.

Q&A with Demos President Sabeel Rahman:

K. Sabeel Rahman is the president of Demos, a dynamic think-and-do tank that powers the movement for a just, inclusive, multiracial democracy. Rahman is also an associate professor of law at Brooklyn Law School, where he teaches constitutional law, administrative law, and courses on law and inequality. He is the author of Democracy Against Domination (Oxford University Press, 2017), which won the Dahl Prize for scholarship on the subject of democracy, as well as a new book Civic Power (co-authored with Hollie Russon Gilman, Cambridge University Press 2019), about strategies for building and institutionalizing bottom-up democratic power.

Sabeel joined Open Markets researcher Udit Thakur this week to talk about the pitfalls of managerialism in policy-making, and what a truly democratic think-tank ecosystem might look like. Below is a transcript of the conversation, edited for clarity.

Udit Thakur – You make a big distinction in your work between laissez-faire and managerialism, and their shared antagonism towards democracy. For people who haven’t had a chance to read your book, how would you describe the difference?

Sabeel Rahman – So, I think in American politics we’re used to thinking of political and policy debates in a binary, right? Liberals want more government and more regulation, and conservatives want free markets and less government regulation. But what’s missing on both sides of those equations is the question of democracy.

One of the examples I talk a lot about in the book is the financial crisis. Coming out of the 2008 financial crash, the worst recession since the Great Depression, the fault lines in the policy debate began to emerge along these lines.

On the back foot were the laissez-faire types who were still arguing for deregulation, claiming that the reason for the crash was that the government was too involved in the mortgage market and making it too easy for poor people to get loans. There’s some nuance, but that’s basically the argument. Another view was that the problem was new forms of systemic risk and complicated new financial instruments. The mainstream liberal response was to double down on managerial expertise. “Lets give Ben Bernanke and the Federal Reserve more power to make sure the big banks don’t do bad stuff!”

What we didn’t do, what some people argued for but what didn’t carry the day, was ask, “Why do we even have so much concentrated financial power in the first place?” And what we didn’t talk about at all in 2010 was, “Well, who’s on the Fed, actually? Why is the Fed made up of mostly bankers and economists? If the Fed has so much power over our economy, over the lives of so many people, shouldn’t the Fed be democratic?”

A lot of people who follow the Fed would be terrified by that prospect.

UT – Safe bet (laughs)

SR – I think that’s when we need to say, well, if you actually believe in democracy, then you should think about how to democratize the economy. And if you don’t believe in democracy, fair enough, lots of people in the history of the world have not believed in democracy. But you don’t get to claim that you believe in democracy.

UT – I appreciate the candor! So I can’t avoid the opportunity to ask about the world you currently inhabit. What has surprised you the most about the structure and culture of the think-tank ecosystem, and what needs to improve?

SR – These are great questions. A critique of technocracy has stayed with me. We need to base our visions of economic and political change in a moral vision that can motivate people. At Demos, we think of ourselves as a think tank of the movement, and our theory of change and orientation is about bringing the muscles and resources of a think tank in terms of research and policy into the service of visions of change that come from and empower those most affected themselves.But to your question about the field, part of what I think is really interesting, and what has me optimistic, is that we’re over a decade removed from the financial crisis. And actually I think that context has been really helpful for the think tank, nonprofit landscape. When you look at a lot of organizations — the Roosevelt Institute, Center for Equitable Growth, Community Change, and obviously Open Markets recently— I think the intellectual center of gravity has moved a lot since (2008-2009).I would argue that we’re in a moment where the progressive critique of neoliberalism has started to gain a bit of an upper hand. Most of the conversations I have with partners and organizations is exactly about this. We have a strong critique, we have great ideas, but we need to build the power to actually implement them. Not just over the opposition of the right, but over the opposition of the traditional center.

UT – So how much do experts share the blame with major corporate executives — “monopolists” as we like to say here at OMI — for the present state of our democracy?

SR – I’d say a lot. But it’s also about the ideas infrastructure we’ve set up to determine who counts as an “expert” in the first place. What are the ideas that have the legitimacy of expert “common sense,” and why do they win out over other ideas also backed by forms of expertise? What would it look like if you actually had an ideas infrastructure that served the interests of average people?I believe in viewing expertise in a small-d democratic way. The promise and faith of democracy is the idea that it is the people themselves who are experts of their own lived reality. The burden on the ideas infrastructure is to do policy in a way that is authentically, genuinely committed to those affected communities and the vision they have for what a good society is.

 ANTI-MONOPOLY RISING:

• California attorney general announces Sutter will pay $575 million to settle antitrust suit. Major health system Sutter Health settled with the California Department of Justice to pay out $575 million in damages and have its business operations monitored for 10 years. California Attorney General Xavier Becerra announced that “[w]hen one health care provider can dominate the market, those who shoulder the cost of care — patients, employers, insurers — are the biggest losers. … Today’s settlement will be a game changer for restoring competition in our health care markets.” (The Sacramento Bee) 

• France slaps Google with $166 million antitrust fine for opaque and inconsistent ad rules. France’s competition authority fined Google €150 million (approximately $166 million) for abusing its dominant position in online advertising markets and instituting “opaque and difficult to understand” rules. (TechCrunch) 

• EU Legal Opinion on Facebook Case Spells Trouble for Data Transfers. An adviser to the EU’s top court recommended that U.S. technology companies should be prohibited from transferring European users’ data unless they can guarantee the transfer will be in compliance with EU privacy laws. Should the EU Court of Justice adopt the recommendation, Facebook, Google, Amazon, Microsoft, and Apple could face significant legal challenges. (The Wall Street Journal) 

• Chile seeks up to $70 million combined price-fixing fine from feed giants after Cargill blows whistle. Chile’s main antitrust authority fined three major fish feed companies as much as $70 million for conspiring to fix prices between 2003 and 2015. A fourth conspirator, Cargill’s EWOS Group, is seeking an exemption for bringing the case to authorities. (Under Current News)

Open Markets Employment Opportunity

Open Markets is looking for a Director of the Center for Liberty and Journalism who will help ensure that the news media is fully independent and funded in the 21st century’s digital economy. The Center will conduct cutting-edge research into news media market structures, engage with policymakers and support efforts to design smart policy solutions, and reshape the national narrative around the market structures that threaten the independence and financial stability of America’s news media.

You can find the full job listings here.

WHAT WE’VE BEEN UP TO:

• Sandeep Vaheesan co-authored a piece in Time titled “Non-Compete Clauses Are Suffocating American Workers.” In the article, Vaheesan details the pervasive implementation of non-compete contracts, which have harmful effects on millions of workers. “Freedom to exit should be a basic right, not a privilege for a subset of workers,” Vaheesan said. The article was mentioned by Sen. Elizabeth Warren on Twitter. 

• Sandeep Vaheesan published an article in Harvard Law School’s student-run Antitrust Association titled “Two-and-a-Half Cheers for 1960s Merger Policy.” In the article, Vaheesan argues against the shared and unwarranted criticism against U.S. merger policy in the 1960s. “[M]erger law of the period,” Vaheesan writes, ”deserves applause and should be a model for policymakers concerned about corporate power.” 

• Barry Lynn spoke with The New York Times about the recent changes to antitrust enforcement and the significant interest in increasing enforcement. Lynn said that recent events such as the state investigations into Facebook and Google indicate a “grass-roots rebellion against concentrated power.” 

• Sally Hubbard spoke with Voice of America about the resurgence in antitrust action against the technology giants. There is “a growing awareness that these companies are causing a wide range of harms, whether it harms to our democracy, harms to innovation, [or] harms to entrepreneurship,” Hubbard said. 

• Sally Hubbard spoke with The New York Times about the fear that small businesses have of suing technology giants, because small businesses depend on these platforms for visibility and revenue. “The fear of retaliation is a real fear. Any of these companies could bury them tomorrow. Google could bury them in their search results. Amazon can bury them in their search results,” Hubbard said.

VITAL STAT: 25

The percentage of Americans who delay medical treatment for themselves or a family member due to the costs of care.

WHAT WE’RE READING:

• “The Great Democracy: How to Fix Our Politics, Unrig the Economy, and Unite America” (Ganesh Sitaraman): A newly published book providing an agenda to help democracy flourish and to secure its future in America. 

• “Do You Pay Too Much for Internet Service? See How Your Bill Compares.” (The Wall Street Journal, Inti Pacheco and Shalini Ramachandran): Detailing how residents of low-income and rural American towns have slower broadband speeds than their wealthier and urbanized counterparts – even though the prices are similar. 

• “How Facebook’s Political Ad System Is Designed to Polarize” (Wired, Gilad Edelman): Facebook’s algorithm differentiates the cost that advertisers pay to obtain user views based on their political alignment, which inhibits the ability to reach voters with diverse political views and could increase political polarization, according to a study conducted by the nonprofit Upturn.

Written by: Daniel Hanley, Udit Thakur, Claire Kelloway
Edited by: Barry Lynn, Phil Longman, and Michael Bluhm.