The new trustbusters

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In mid-March, President Joe Biden nominated a young scholar named Lina Khan to serve on the Federal Trade Commission. Khan is a progressive’s progressive. Frustrated at what she viewed as Amazon’s anti-competitive practices, she argued as a 27-year-old Yale Law student that the “consumer welfare” standard — that antitrust action should only be pursued when business practices are adversely affecting consumers, not competitors — was inadequate for dealing with the company’s growing dominance. She suggested that one way to address this problem would be to force Amazon to split up retail and marketplace operations. Another possible solution floated involved more hands-on regulation, as if Amazon were a kind of public utility.

Liberals loved it. Khan advised Massachusetts Democratic Sen. Elizabeth Warren and a Democratic FTC commissioner, then took a job as a counsel for Rhode Island Democratic Rep. David Cicilline’s antitrust subcommittee.

The old guard on the Right was less entranced by Khan’s ideas. Joshua Wright, a former FTC commissioner and current scholar at George Mason University, which serves as a home base for classical conservative economic thinking, denounced Khan’s camp as “hipster antitrust.” Then-Utah Republican Sen. Orrin Hatch said this new school of antitrust thought “amounts to little more than pseudo-economic demagoguery and anti-corporate paranoia.” Yet when Khan’s nomination came to a vote, something genuinely surprising happened: Khan sailed through the Senate with 72 votes. Twenty-one Republicans, or about 40% of the GOP caucus, voted to confirm her.

It was a watershed moment for the Right. For the first time in a generation, a significant number of conservative lawmakers effectively endorsed what has traditionally been viewed as a progressive approach to reining in corporate power. It is the latest in a series of developments that demonstrate that conservatives are starting to rethink their approach to big business.

In October 2016, Matt Stoller, a former Capitol Hill staffer who today serves as the director of research at the American Economic Liberties Project, penned a piece in the Atlantic laying out how the Democratic Party spent the late 20th century abandoning anti-monopoly politics, leading to the success of Donald Trump over a Democratic Party that had failed to rally the working class. In 2019, Stoller released a book-length treatment of his argument. To his surprise, his book found a different audience than he intended.

“I wrote my book for the Left,” Stoller said in an interview. “My book was popular on the Right, not on the Left. ... On the Right, I got a ton of people who were like, ‘This is so good. I never thought about it that way.’”

Stoller noted that the deplatforming of Trump and the social media crackdown on conservatives helped push the Right to rethink this principle. Right-leaning advocates I spoke to agreed.

“All of the support for [Lina Khan] on the Right, I think, is a product of circumstance,” Rachel Bovard, the senior director of policy at the Conservative Partnership Institute and one of the populist Right’s policy and messaging experts, told the Washington Examiner. “A lot of them, you know, have just been galled by the behavior they’ve seen from tech.”

Some Republicans who supported Khan explicitly cited this issue. “I believe she is focused on addressing one of the most pressing issues of the day: reining in the big social media platforms,” Mississippi Republican Sen. Roger Wicker said of Khan in May.

“Basically, what’s happened with Big Tech is conservatives opened their eyes to the fact that they’re not dealing with businesses when they’re talking about monopoly. They’re dealing with private governments. And they’re suspicious of government!” Stoller said. They have discovered that the old argument of if you don’t like Amazon, just start your own competitor to it “doesn’t work anymore.”

Oren Cass, a former Mitt Romney adviser who today is the executive director of American Compass, an organization that provides intellectual ammunition for the populist Right, sees little ideological tension with the growing conservative embrace of anti-monopoly politics.

“Chicago School libertarian economic dogma is not conservative,” Cass told me. “Conservatism is hugely skeptical of power.” He pointed to the White House’s recent leaning on social media companies to work together to ban so-called “misinformation” about COVID-19 as an example of how the Left, not the Right, is embracing corporate power.

The populist Right’s initial response to tech censorship of its base was to call to amend or repeal Section 230 of the Communications Decency Act, which limits the liability of tech platforms. They believed that empowering users who were unjustly removed from platforms to sue would be the best remedy. While most conservative populists continue to endorse some type of Section 230 reform, they also now believe that this was thinking too small. When a behemoth like Amazon chooses to stop selling certain conservative books or when its web server department completely removes a social media platform from the internet, a simple change to legal liability is insufficient. These companies are monopolies, and the way to address monopolies is to break them up and foster a more competitive marketplace.

Even lawmakers such as Utah Republican Sen. Mike Lee, who opposed Khan’s nomination and tends to be on the more libertarian side of the party, have come to the realization in recent years that Big Tech’s sheer size may be a problem. “Censorship is not an antitrust violation; but it is a symptom of market power. Censoring your users’ speech is something you can only get away with when you know they don’t have anywhere else to go,” he said at a recent event. “No business would treat its customers with the prejudice and disdain shown by Big Tech towards conservatives unless it was confident that it had the only game in town.”

It’s possible that the Right’s animus for tech could transform into a more industry-wide anti-monopoly politics. The leader of the GOP’s anti-monopoly faction is Missouri Sen. Josh Hawley. He penned a book back in 2008 chronicling the politics of Teddy Roosevelt and laying out a critique of America’s early monopolies. As Missouri attorney general, he was the first AG of either party to launch antitrust investigations into Google and Facebook. He has introduced legislation that would “ban all mergers and acquisitions by companies with market capitalization exceeding $100 billion” and effectively end the consumer welfare standard — the one Khan argued was outdated.

Unsurprisingly, the prospect of the Josh Hawleys and Elizabeth Warrens of the world working to upend the antitrust consensus has many traditional conservatives alarmed. The conservative Committee for Justice recently established the Alliance on Antitrust, a coalition of right-leaning groups that includes FreedomWorks, the National Taxpayers Union, the American Legislative Exchange Council, and others that want to preserve the consumer welfare standard.

“Blocking mergers and acquisitions, that would have a really destructive effect on venture capital investment and startups,” Ashley Baker, director of public policy at the Committee for Justice, told me of Hawley’s proposed legislation. “A blanket ban on M&A would be really catastrophic, especially when we’re trying to compete with China.”

Robert Bork Jr., the president of the Antitrust Education Project and son of Judge Robert Bork, famed proponent of the consumer welfare standard, accused Hawley and other heterodox GOP lawmakers of threatening capitalism itself in a piece he penned in National Review. “Such conservatives — 21 of them in the Senate voted to confirm Khan to the FTC — seem to be in favor of fossilizing American capitalism,” he wrote. “If they pass Hawley’s bill, Boeing, Procter & Gamble, ExxonMobil, and Texas Instruments will be hobbled.”

In an interview with the Washington Examiner, Bork expressed sympathy for conservatives who are angry at Big Tech’s speech policies. He conceded that he’s had friends who have been unable to share articles he’s written on Facebook, likely due to the platform’s expansive use of AI-driven moderation, which often mistakenly prohibits content that doesn’t violate any policy. But he thinks conservative anger at the industry is being exploited by those on the Left who fundamentally want to remake the American economy through new antitrust regulations.

“I really think it’s quite possible that we’re at a tipping point where conservatives are going to open the gates to this Trojan horse. And not only open the gates, but, you know, climb on board,” he warned. “You have people like Josh Hawley, who’s in a class by himself, who’s written some pretty amazing regulations, like no company over $100 billion can buy anything, buy another company. That’s a lot of companies. … I just think that’s, that’s nuts.”

In his view, even if populist GOP lawmakers such as Hawley fail to pass their own legislation, they will give Democrats the ammunition they need to pass theirs by providing support to the underlying ideas. He referenced a bill by Minnesota Democratic Sen. Amy Klobuchar, who is leading anti-monopoly policy for Senate Democrats, that boosts antitrust enforcement.

“He’s going to give her cover,” he concluded. “His stuff may not pass, but hers will, because they have Josh Hawley as their poster child.”

Hawley was unrepentant about supporting Khan. “Her criticism of those tech companies in a very cogent way got my attention and was absolutely key in getting my support,” he said. “What I particularly appreciate from her is her emphasis on competition. I think what we want to see in the tech space and what we want to see in the economy as a whole is robust competition. That’s what leads to innovation. That is good for workers. That is good for wages. And I’m concerned about the lack of competition we see across multiple sectors of the economy. But her background suggests that she understands that.”

Big Tech is pouring money into friendly think tanks, such as GMU’s Global Antitrust Institute, which is headed up by Wright. But conservative activists increasingly view that money with suspicion.

In May, the influential Heritage Foundation joined more than 40 conservative organizations in pledging not to take any corporate donations from Big Tech. “They saw the writing on the wall, like, ‘Oh my gosh, they’re actually impacting our elections. We can’t be defending these companies anymore,’” Jon Schweppe, director of policy and government affairs at the American Principles Project and one of the signers of the letter, told me of the conservative swing against Silicon Valley. The organization recently launched a website and browser extension at bigtechfunding.org to track which advocacy groups continue to take Big Tech money.

While conservative populists work to push the GOP to adopt a more adversarial stance against corporate America in general and tech in particular, they also have to deal with the reality that Democrats control both chambers of Congress and the White House. Thus, bipartisanship is necessary to pass anything.

One Republican who has been working closely with Democrats is Colorado Rep. Ken Buck. Buck, the ranking member on the House Judiciary subcommittee dealing with antitrust, collaborated with the subcommittee chairman, Rhode Island Democratic Rep. David Cicilline, to craft a series of bills that strike at the heart of Big Tech power.

Buck explained to me how his thinking on this issue evolved over the past year. “I saw the need for antitrust reform after a Judiciary field hearing in Colorado in early 2020. I was able to hear firsthand from small business owners that had suffered from the anti-competitive practices of Amazon,” he told me. “We will not have a free or fair market until we break up Big Tech monopolies that have abused their power in the marketplace.”

His bills would, among other things, empower enforcement agencies to prohibit large companies from self-preferencing their products across multiple lines of business (think Amazon boosting its Amazon Basics line of goods on its own platform).

Buck has had some success in convincing fellow Republicans to work on the bipartisan bills. Members such as Texas Rep. Lance Gooden, Utah Rep. Burgess Owens, North Carolina Rep. Madison Cawthorn, and Florida Rep. Matt Gaetz are backing some or all of the bills.

“This issue is bipartisan. Big Tech is crushing competition and censoring conservative speech. It is important to put partisanship aside and rein in Big Tech now,” Buck said.

But unfortunately for Buck and Cicilline, not only is the support for these antitrust bills bipartisan, but the opposition is, too, with conservatives such as Ohio GOP Rep. Jim Jordan and progressives such as California Democratic Rep. Ro Khanna opposing the legislation.

One way for the conservative populists to succeed on the Hill would be to elect more of them. Although the Hawleys and Bucks of Congress remain a minority faction in the GOP, more and more high-profile 2022 candidates are making anti-monopoly messaging part of their campaigns.

“You have this younger generation of Republicans. Josh Hawley typifies this, but I think it’s wider and broader than that,” Bovard said, pointing to Ohio GOP Senate candidate J.D. Vance and Arizona GOP Senate candidate Blake Masters. “They represent this view, too, that the economy has become so concentrated.”

Indeed, Masters warned of “corporations that have gotten so big, they think they’re bigger than America” in his launch video; Vance, on the other hand, speaks about “economic plunder from America’s ruling class” during his Fox News hits, channeling his inner Teddy Roosevelt.

In an ironic twist, it is a billionaire himself who is bankrolling both men. PayPal co-founder Peter Thiel has given $10 million to a pair of super PACs supporting them in each race. While liberal cynics have argued this sort of money makes their promises hollow, another way to look at it is that maybe the only way to take on a sector as powerful as Silicon Valley is to recruit one of its notorious dissidents to your side. (Thiel previously donated to Hawley as well.)

Regardless of whether their numbers in Washington grow, it is clear that conservative populists are making their mark on the GOP. Their embrace of an antitrust agenda and willingness to work with progressives is helping craft a wing of the party that believes Big Tech can be just as detrimental to liberty as Big Government. Increasingly, the base agrees with them. A Pew poll released in July found that the majority of Republicans now agree with the majority of Democrats that the government should prevent major tech companies from growing “beyond a certain size, because it hurts competition.”

If there is one man who is likely pleased by this evolution, it’s Hawley. But the biggest obstacle to Hawleyism taking over the GOP continues to be the perception that it’s simply a Trojan horse for the Left’s worldview. In our interview, he dismissed that concern.

“What the Left is offering is either an economy controlled by the woke corporations or controlled by the government, or both,” he told me. “I think we want to reject that. That’s a false alternative. … We don’t want a government-directed economy. We want a free economy where there’s robust competition, where it’s consumers who are in charge, not a handful of woke corporations. And where people can start a business, where they can get into business, there’s not these huge barriers to entry. That’s the kind of free, robust economy that we want to have, and we’ve got some work to do to get there.”

Zaid Jilani is a freelance journalist.

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Tags: Technology, Big Tech, Free Speech, Conservatives, Regulation, Antitrust, Business

Original Author: Zaid Jilani

Original Location: The new trustbusters

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