WASHINGTON—With antitrust reform hearings underway Thursday in the U.S. Senate Judiciary Committee, a new report from the Information Technology and Innovation Foundation (ITIF) details how progressive crusaders have succeeded in using faulty research, half-truths, and erroneous claims about monopoly power to delegitimize the long-established “consumer welfare standard” in antitrust policy and advance a new “public interest standard,” amounting to a broadside attack against large firms that furthers redistributionist economic goals.
“Progressives’ core economic goal is redistribution, not growth, and they see antitrust policy as a potent weapon in that fight,” said ITIF President Robert D. Atkinson, who authored the report. “But redistribution isn’t the point of antitrust policy, so their first step has been to reframe the debate around the idea that ‘monopolies’ are the root cause of all that ails us.”
“Antitrust policy has long recognized that large firms aren’t innately bad—in fact, market power can boost economic welfare. The bedrock principle has been to enhance consumer welfare, so a key principle has been to protect competition, not competitors, with the ultmate goal of promoting innovation and growth,” Atkinson explained. “Progressives' antitrust crusaders have manipulated statistics to turn all of that on its head. Now the operating principles are that big firms are bad; market power harms economic welfare; antitrust should protect competitors, especially small business; and the ultimate goal is promoting the ‘public interest’—however progressives definite it.”
ITIF’s new report concludes a comprehensive series of reports examining key claims that antitrust advocates have used to advance their cause. The series asks:
- Is Concentration Leading to Higher Profits?
- Is Concentration Leading to Higher Markups?
- Are Markets Becoming More Concentrated?
- Do Internet Platforms Threaten Competition?
- Is Concentration Leading to Fewer Start-Ups?
- Is Concentration Eroding Labor’s Share of National Income?
- Is Big Tech Creating ‘Kill Zones’?
- Are Superstar Firms Stifling Competition or Beating It?
In most cases, ITIF has found that the empirical evidence is weaker than advocates claim, or that causal relationships are speculative. Although some economic trends raise serious concerns, such as an increase in income inequality, they usually have several causes. It is not clear that antitrust policy is either the cause or an effective cure.
Nonetheless, as ITIF details in its new report, progressives have pressed forward with a sustained advocacy campaign, taking inspiration from early 20th century Supreme Court Justice Louis Brandeis, a dogged critic of large firms in the industrial-era economy, who argued that bigness was the “mark of Cain.” Taking up that banner, neo-Brandeisians today have made canny use of “Big Tech” as a stalking horse for a broader indictment of large firms throughout the economy. This tactic has succeeded in shifting the frame of reference for what is acceptable and desirable in antitrust policy.
“The neo-Brandeisian project is not to improve the economy with antitrust,” said Atkinson. “It is to limit the size and economic influence of large corporations, regardless of whether it hurts or helps the economy, competitiveness, workers, or consumers.”
Commenting on recent hearings in the U.S. House of Representatives and Thursday’s hearing in the Senate, ITIF’s director of antitrust and innovation policy, Aurelien Portuese, added: “These hearings should present an opportunity to debate the state of competition and antitrust doctrine in the U.S. economy, not a platform to bless already agreed upon conclusions about ‘monopoly’ that neo-Brandeisians have spent the last decade promulgating. If the economic policy goal is widely shared growth—and it should be—then lawmakers should resist the chorus of advocates trying to refashion antitrust policy into a tool for redistribution. That would lead down a path toward less innovation, slower growth, and weaker U.S. competitiveness.”