“Khanservative” Antitrust Is Not the Answer to the Failure of Neoliberalism

For the last few decades, if you wanted to be the cool kid in Washington, DC, you’d nod approvingly at the policy precepts that English economist John Williamson had labeled (with ironic derision) the “Washington Consensus”—the playbook that hinged on free markets and liberal trade, later known as “neoliberalism.” Dissenters were distinctly uncool; anyone who voiced concerns about the prevailing economic wisdom was looked down upon by those with Ivy League pedigrees as a yokel.

These days, the tables have turned. Now, at least on the right, if you want to be the cool kid in DC, you have to embrace Trumpian economics—particularly its populist animus toward large corporations.

Talk about going from dumb to dumber.

To be clear, neoliberalism failed due to its excesses and blind spots, including a flawed model of globalization, way too much financial deregulation, a disregard for U.S. deindustrialization, and a dismissal of growing income inequality. But one aspect of neoliberalism that did not fail, despite what populists on the MAGA Right and populist Left say, is antitrust policy. As the Information Technology and Innovation Foundation (ITIF) has shown, neither domestic nonfinancial profits nor industry concentration has increased as you would have expected if antitrust had failed. Not to mention the fact that under U.S. antitrust policy the digital revolution flourished and its pioneering companies kept America growing, whereas in Europe, where antitrust policy focuses more on protecting competitors from competition, the digital economy sputtered.

So, how about some nuance in the justified critique of neoliberalism instead of throwing out the corporate baby with the bathwater? Launching an antitrust campaign against large companies in an effort to somehow to regain the industrial structure of the 1790s is a path to immiserating the American “proletariat” while ensuring the coast is clear for China to take over as the global hegemon.

It was bad enough that the Biden antitrust team was staffed with zealous corporate antagonists. One expects anticapitalist sentiments from the left wing of the Democratic party. Those activists know the major barrier to achieving their worker- and government-owned nirvana is large capitalist enterprises.

Maybe attacking big companies is good politics for the New Right (although I doubt it, given that more than half of Americans employed in the private sector work for large companies), but it is awful policy. The reality is that large corporations do far more for working Americans than small and mid-sized companies. Consider the following:

• One in five workers in 2007 were employed in firms with fewer than 10 workers—yet those firms employed 42 percent of low-wage workers. By contrast, 44 percent of workers were employed in firms with more than 500 workers—and those firms employed just 28 percent of low-wage workers.
• Workers in firms with more than 500 employees earn 38 percent more than workers in with less than 100.
• Workers in companies with more than 500 employees receive 85 percent more overtime and bonuses, 2.5 times more paid leave and insurance, and 3.9 times more retirement benefits than workers in companies with fewer than 100 employees.
• Firms with 100-plus employees are almost twice as likely to offer paid life and disability insurance.
• The 4 largest firms in any industry have on average 37 percent higher productivity and 17 percent higher wages for production workers.
• Establishments with less than 250 workers are 4 times more likely to fire or lay off their workers than establishments with more than 5,000 workers.
• In 2012, workers in goods-producing industries were injured 25 percent less frequently in firms with more than 1,000 employees than they are in firms with 10 to 49 employees.
• In 2017, large businesses employed 8 percent more veterans.
• Many small businesses are exempt from regulatory requirements, including the Clean Air Act, the Occupational Safety and Health Act, the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act, the Age Discrimination in Employment Act, Title I of the Americans with Disabilities Act, and Title VII of the Civil Rights Act.

It is troubling that so many on the populist right have been so quick to adopt a “big is bad” doctrine when the facts so strongly contradict it. Indeed, given President Trump’s personal brand as a successful businessman, it is frankly a surprise to see that his antitrust team has turned out to be largely “Khanservative” torchbearers for the aggressive brand of anticorporate antitrust championed by former Democratic FTC Chair Lina Khan.

In the words of current FTC Chair Andrew Ferguson, “Republicans of yore, this is a strange thing to hear, but this is the working person’s party now,” which he strangely seems to think means being an anticorporate party.

Newly minted FTC Commissioner Mark Meador would seem to agree. At a recent conference hosted by American Compass (ground zero for Khanservative thinking), he stated:

That a corporation can’t compel anything at the point of a gun is cold comfort when it can cut you off from commerce, speech, and even your bank account. Human flourishing can be crushed by much less than a standing army. Likewise, economic transactions with a monopolist—or dominant competitors acting in concert—are anything but voluntary; by definition there is no meaningful alternative, and the terms imposed can be coercive.

Conservatives must once again reject libertarianism’s narrow conception of human freedom as the mere absence of government, while putting their heads in the sand when asked about how companies acquire, entrench, and maintain their economic power. We must instead acknowledge that tyranny can come from monopolies other than force, that freedom and free markets are not self-sustaining, and that our leaders swore an oath to defend the people from enemies foreign and domestic, whether armed with battalions or bankers.

A rousing statement, but as noted, where’s the cause for alarm? Not in concentration ratios. Not in profits. And not in lack of digital innovation. (Just look at the rapid growth of AI.)

DOJ Antitrust Division head Gail Slater appears to be on the same page as her FTC colleagues. In an address at Notre Dame Law School, she argued:

At the same time that global labor arbitrage traded American jobs for cheap manufacturing abroad, growing profit margins diverted the economic gains for many goods from American consumers and workers to our coastal elites… The 19th century also saw the emergence of a new kind of monopoly—a private empire of oil, railroad, and agricultural robber barons. These private monopolies threatened liberty just as King George once had. Although the identity of the tyrant changed, the threat posed by monopoly to the American people’s endowed natural rights to liberty had not.

Perhaps the intellectual godfather for this thinking comes from populist conservative Sohrab Ahmari, and his book Tyranny Inc., which Slater actually referenced in her speech. The jacket blurb states:

over the past two generations, U.S. leaders have deregulated big business on the faith that it would yield a better economy and a freer society. But the opposite happened. Americans lost stable, well paying jobs. Wall Street dominated industry to the determinant of the middle class and local communities, and corporations began to subject us to total surveillance.

This does not appear to be the book of a disgruntled Marxist (although, you never know). Indeed, the book jacket lists prominent Republican endorsers including now Secretary of State Marco Rubio and Senator Josh Hawley (R-MO).

So, let’s unpack Ahmari’s jeremiad:

• Two generations of deregulation? Really? Most of it was in the transportation and utilities sectors, and virtually all of that was clearly pro-consumer and pro-growth (e.g., an explosion in freight rail productivity, cheap air fares, etc.). In terms of social and environmental regulation, there has been regulation, not deregulation.
• Americans lost stable jobs? No, just the opposite. The odds of getting laid off through a downsizing or closure are the lowest they have been since the mid-1990s when BLS started collecting the data.
• Loss of well-paying jobs? The reality is that from 2013 to 2023, according to the Bureau of Labor Statistics, there was a negative 0.48 correlation between median wage levels by occupation and median wage growth. In other words, the lowest paid jobs saw the fastest growth.
• Total surveillance? What the heck does this even mean? My bank knows how much money I have with them. Is this surveillance? My health insurance company knows my health. Is this surveillance? And in these areas, we have strict privacy laws. Ah, but what about evil big tech—they must know everything. Clearly Google knows your search terms (they are on Google servers). Meta knows your posts (it is a social network after all), because they have to be on Meta’s servers. But Google and Meta don’t share that information with other companies. They only sell advertisers the opportunity to place an ad in front of users with particular characteristics (e.g., a middle-aged man in the Midwest who likes baseball), just like restaurants place adds on billboards on interstates.

I don’t want to speculate too much here, but like so many on the left that privilege human self-centeredness and rights (rather than the community and responsibilities), it appears that Ahmari and many on the New Right ultimately do the same. Indeed, if one wants to speculate on the decline of America, then the rise of selfishness as a replacement for civic virtue on the Left and the Right, and in most institutions, needs to be at the top of the list. (Take a look at James Lincoln Collier’s 1991 book The Rise of Selfishness in America, where he predicts much of what has transpired in recent decades.)

Indeed, in his book Ahmari literally sees it as coercion and tyranny that a person’s employer can expect them to actually work hard. How dare they! This is dumb enough to be laughable. Amari would call it tyranny if a boss asked a worker to work overtime, or a company gave someone an invitation to come to a dinner to discuss the wonder of time shares.

In this regard, the New Right has actually taken selfishness to a new level. Individuals exist in society to be able to do whatever they want, whenever they want. And if that means not doing work, so be it. Right on, power to the people! While the Chicago school of antitrust wanted to limit the role of government, especially in antitrust, the Mar-a-Lago school of antitrust wants to limit the role of any institution with even a scintilla of power or control. This, not the Chicago school, is the true libertarian position, where no organization, business or government, should be allowed to infringe on my sacred liberty. But the reality is that the only way to get to reach this dystopia would be to have the largest companies control just a sliver of the market in every industry, and cut the federal government back down the same size it was when William McKinley was president. They would rather have a society where consumers can choose between 10 low-quality cars than 2 high-quality cars. I, and I think most Americans, would choose door number 2 and take the Cadillac.

What’s even more ironic, is that Ahmari rails against firms that arguably did limit the freedom of their employees or customers, but none were monopolies or even oligopolies. They were firms that faced competitive markets, many of them medium-sized, and many just happened to have abusive management. Breaking up big American companies would do absolutely nothing to solve this purported problem of tyranny in the workplace. Perhaps congressional legislation limiting the kinds of information companies collect on their employees could be in order. But to rail against private tyranny by arguing for the breakup of big companies, as the New Right does, is like saying we should ban pickup trucks because too many drivers of motor vehicles run red lights.

Ahmari will deny that he is against large firms. But how else should one interpret his statement that “a relatively narrow elite lords over a class hierarchy whose obscene disparities world have left the plutocrats of the Gilded age blushing.” Sounds like he wouldn’t mind breakups. As does his contention in Tyranny Inc. that “private property rights grant the factory owner coercive power over customers. If the latter want his product, they have to pay the price he demands.” Either Ahmari never took Econ 101, which shows that in competitive markets, neither sellers nor buyers have pricing power, or he believes that the economy is rife with monopoly. As does his railing against “oligopoly” and “market tyrants.” Sounds like a Khanservative to me. As does his tweet “Honored beyond words that Assistant Attorney General Gail Salter cited my work … in support of robust antitrust enforcement against privatized tyranny.”

Finally, what about Wall Street? Ah, now we’re talking. Yes, financial deregulation and the massive growth of the speculation economy is a core problem, and one that you can lay 100 percent in the lap of neoliberals, especially the ruling center-left coastal elite class. But the financial economy is not the production economy. The former is in many ways a “casino” where the obscenely wealthy insiders win without adding any value to society. The latter produces real goods and services that make our lives better and more prosperous, and large firms do that the best. And, just for context, Blackrock has nearly $12 trillion in assets under management, which is just about the size of the market caps of Microsoft, Apple, Google, Amazon, and Meta combined.

But rather than direct their ire and reformist impulses to help de-financialize the U.S. economy, the New Right is succumbing to the neo-Marxist trap that holds all corporate capitalists are evil. It doesn’t matter to them if you are making desktop computers or dealing in derivatives; it’s all bad.

So, in summary, thank God the New Right is railing against the excesses and failures of neo-liberalization. Rail against how globalization 1.0 got so much so wrong. Rail against the excessive role and power of Wall Street. Rail against the rules making it hard for workers to form unions. Rail against corporate crime. Rail against excessive offshoring.

But railing against large goods and services-producing corporations for the crime of being big is not just a road to stagnation, of income and innovation growth. It is also a road to serfdom, only this time the tyranny we face will not be a small business that treats its four employees poorly; it will be the Chinese Communist Party becoming the global hegemon. Besides a strong military, the only bulwark America has against Chinese techno-economic dominance is its large, sophisticated, profitable corporations.

Khanservatives and Khan-liberals both must reject “big is bad” ideology, because if large tech firms are needed to compete with China then aggressively breaking them up is harmful to the Republic. As liberal journalist Rana Foroohar writes in the Financial Times,

While Slater is no Khan, her pro-market stance means that she doesn’t buy into Silicon Valley’s ridiculous national champion argument that bigger is better in the fight for tech supremacy with China. “We think that we should have more confidence in our system and not think that in order to compete with China, we have to become more like China,” she said in a recent interview with conservative pundit Sohrab Ahmari.

So, let’s get this right. Ensuring that we have large companies, including in the tech sector, is becoming more like China? No, it’s becoming more Burundi, which has the highest share of employment in small business. What an innovation powerhouse!

The reality is that becoming more like China would entail moving away from the rule of law, discriminating against foreign companies, and closing our markets to foreign trade. Breaking up our large companies is not becoming like China, although it is what the CCP wants, just as it would love us to cut defense spending.

The reality is that China competes by massively subsidizing its large companies. If the Trump administration wants to break up large tech companies while at the same time providing them with massive operating subsidies so they can slug it out with deep-pocketed Chinese behemoths, have at it. But we all know that is not going to happen. So, only by being big can American companies make the investments in R&D and other innovation to beat China. Oh, and by the way, our system that Slater says we are supposed to have confidence in is an antitrust system grounded in the consumer welfare standard, not a populist one breaking up companies for the sake of it.

Finally, while President Trump is to be commended for highlighting the China threat the way he has, there are certainly some on the New Right that dismiss it completely, or even embrace the CCP. In a now deleted May 3, 2021 tweet, Ahmari actually admitted:

I’m at peace with a Chinese-led 21st century. Late liberal America is too dumb and decadent to last as a superpower. Chinese civilization, especially if it recovers more of its Confucian roots will possess a great deal of natural virtue.

Oops! Hey Sohrab, if you hate America so much and love China, then why didn’t your family move from Iran to China, instead of to the United States, so you could bless us with these obtuse statements?

One final note: Part of the New Right’s animus toward big tech is clearly cultural. Senator Hawley has argued this. As has conservative pundit Rachel Bovard. We appear to have blown through any guardrails against using laws and regulations to punish political opposition. (Welcome to Latin America.) So, I won’t bother to point out just how dangerous it is to have crossed this line. Maybe the next Democratic administration can take away Fox TV spectrum and bring a lawsuit against the conservative company Hobby Lobby. (Break up Big Hobby!) This crusade is just pure spite and revenge. Besides, breaking up Google or Meta into component parts will not change content-moderation policies. If you want to fight what you think are biased policies, then use the bully pulpit, which President Trump has already successfully done. (Just look at the number of corporations that have backed away from their DEI policies.)

I get that the kind of nuance required to reject some but not all components of neoliberalism is hard for some, especially those who want to achieve fame, if not fortune, by making grand sweeping attacks and proclamations. But reality, I’m afraid, is more complicated, and failure to see the shades of gray comes at the nation’s peril.