You could almost feel it coming in the air tonight. Or wait, that is a Phil Collins song stuck in my head. However, there is a pervasive feeling that the tech giants like Amazon and Google are now too powerful, but they’re also really good for consumers.
This so-called paradox between what’s good for consumers and what’s good for the markets has once again turned mainstream. In his influential book, The Antitrust Paradox, Robert Bork, the godfather of modern antitrust theory, declared predatory pricing schemes irrational. He may be right, but one could also see a more sinister side to Jeff Bezos, who gives off an appearance of the “Dr. Evil” character in the Mike Myers Austin Power’s films.
It’s hard to hide when you achieve the enormous size and notoriety of an economic giant. Technology companies based in Seattle or Silicon Valley now account for five out of the five most valuable companies in America. You know who they are. Everyone knows who they are. These once geeky garage start-ups now dominate the big tech and big data worlds. Legislation railing on monopolies and trusts data back over 100 years to the Sherman and Clayton Anti-Trust Acts. Interpretation of such has deviated and shifted over the years, with the interest from circa 1980 to present being with price control, or the welfare of consumers.
As you can infer from the graphic above, anti-trust cases filed by the Department of Justice peaked in the late 90’s, and have declined ever since. We currently find ourselves being pulled to the left by the new breed of Democrats, who want more government control in every facet of life, except of course for abortion, as evidenced by the statement from Whoopi Goldberg, heroin addict emeritus and political neophyte, “I don’t want you[government] in my coochie.” Her words, not mine. You won’t see it put forth like that in the New York Times. But I digress.
President Trump has been an open critic of Bezos and Amazon, and has spared with most of the others as well. In general, Republicans will tend to let the efficient market hypotheses take care of inequities in the marketplace, without having the heavy hand of government involved.
Once again on the wrong side of the issue, Elizabeth Warren and fellow presidential candidate Bernie Sanders, among others, are looking to pull the Democratic Party left on a range of economic issues. Only imbeciles like these spew vitriolic breath at the growth and peace that Ronald Reagan brought to America in the last decades of the last century. Just like radical Islam wants to throw us back into the 7th century, these rabid socialists advocate a return to the more expansive philosophy that animated competition policy in the first part of the 20th century, including potentially dismantling companies seen as too big and powerful.
This is indeed a dilemma for our capitalist economy. We must maintain our entrepreneurial edge by encouraging and rewarding garage start-ups like Amazon and Facebook. Social issues aside, these companies have given the masses what they want. Lower prices, faster delivery, and access to information.
With that said, we mustn’t venture to the other end as Milton Friedman would suggest. There is a reason why some government intervention is needed in capitalism. We have street lights and stop signs, as well as police, to maintain the order. The same is true for business. It is just that today’s anti-trust issues don’t follow the mold of those in the past. This appears to be, and should be, a bipartisan effort politically and academically, where our anti-trust laws now must be living and breathing documents.