Beyond Antitrust: Multiple Means of Exit

The triptych of industrial liberty, commons and democracy presented by the anti-monopoly crowd[1] presents an interesting strain of political economy that seems long-forgotten amongst much of modern discourse. To be honest the democracy part of the equation interests me little, seeing as the conception of democracy present in so-called liberal democracies seems to jump between majoritarianism, constitutions and common law liberties in a trichotomous deluge of nonsense, with any sort of semblance of “democracy” being destroyed by the technologies of big data and the internal rot that majority opinion and lobbying let leech. However the other two present the interesting variable of showing that marketplaces, as the centre of competitive activity, and social networks are not in and of themselves necessarily spontaneous conceptions. While certainly they are not purely the product of governmental activity, nor are they the natural practice of Smith’s human propensities.

Rather they are an intersection between such foundations. This is seen in the semiotic myth of markets[2] versus their actual praxis[3], as well as in the combination of social relations alongside the desire to buy, sell and trade that form what can be described as the stereotypical marketplace i.e. the production and flow of information. The development and sharing of information require basic trust, codified through rules and regulations which then set the field for how things may be traded. This requires courts, shared rules of practice, multiple contractual obligations and common standards (or forms of comity). This is hardly revolutionary ground-breaking stuff but it does show that the development of socio-economic activity through competitive markets requires combinatory forces of economic innovation and governmental planning to limit anti-competitive tendencies and prevent conspiratorial behaviour.

The anti-monopoly writers such as Stoller and Lynn intuitively recognise this as the background and foreground for developing an “industrial commons”[4] that is open and allows for the free flow of information. Of course in describing these commons many writers engage in sycophancy regarding the extent to which the Federal Trade Commission and Department of Justice fought bravely against monopolies and trusts and protected great American values. However they do show that regulatory methods focused not just on technocratic means such as consumer welfare or efficiency, but on broader values such as local stakeholding, community practice and tradition, and the preservation of innovatory methods through the competition of small firms who could capitalise through local banking and loan systems. “Throughout most of the country’s history, American government at all levels has pursued policies designed to preserve local control of businesses and to check the tendency of a few dominant cities to monopolize power over the rest of the country”[5]. In effect, this preservatory understanding that these writers invoke is about control. Who controls the means of production and their own labour, and what institutions do we need that allow for the distribution of this control and the ability for individuals and collectives to wield control in the way they see fit.

In the modern economic environment, such an understanding is important with the development of big data, the central importance of intellectual capital and the increasing complexity of machine technology. These technologies and systems fundamentally put the question of what is control into flux, as autonomous systems come to the fore as equals of human output. As it stands, many of these technologies exist under the thumb of large bureaucratic organisations, from Amazon and Google to the US military-industrial complex, who effectively have monopoly control over their distribution and their effective use. It is difficult to imagine hackers or cooperative producers seriously producing alternative product lines or developing autonomous organisational forms that rival or outcompete those of Google or Apple. They don’t hold the patents, don’t have access to the third-party suppliers and cannot stop the likes of these monoliths simply swallowing up their company or taking over their workforce. In terms of capital, the short-term financial environment tacitly encouraged through purposeful deregulation and the activities of the SEC and the Treasury mean that the formation of long-term mutual relations of profit and loans gives way to speculation. Supposedly reformist efforts like the Dodd-Frank Act have re-entrenched this status quo, enforcing capital requirements and loan regulations which make it extremely difficult for investors to take risks in innovatory sectors of the economy. Even at the more banal levels of basic manufacturing or retail, smaller producers cannot access the subsidies that allow for labour agreements to be crafted that limit wages and ban unions. They cannot enforce one price-fits-all agreements on their suppliers and force manufacturers to make losses against their interests. On the purely governmental, these various entrepreneurs and companies cannot even dream of lobbying the way established companies can, thus the whole effort becomes redundant. It is at this point that the market moves from a competition to a tournament[6] where the rules are predetermined by a self-declared arbiter, and there is no means to exit.

In this sense, antitrust as the movement of the populists and cooperative producers and small business owners that birthed it is important as a corollary to the construction of regulatory institutions that implement shared rules and practices and produce mechanisms for their enforcement, with the main aim being the maintenance of a competitive impetus within the decentralised marketplace. It is through direct social action that these conceptions came to be considered politically important, producing as they did not just a democratic movement but an intellectual movement that understood monopoly as something more than a technocratic aberration, but a problematic system that went against the values of small property holders and the independent frontiersmen of the American west. Thus the opposition to bigness comes down to an understanding of control as something that should be distributed away from centralised powers, from tournaments where you are a mindless participant. This really isn’t something that is significantly disputed except by the incumbents who are opposed to change, who when it comes to industrial developments want time to stand still. However the criticism of bigness that the antitrust advocates of today place upon business don’t seem to extend to government, and have significant blindsides in failing to recognise the failures of anti-bigness that antitrust was meant to engender.

While these advocates wax lyrical about the miracles of antitrust in allowing for cities like St. Louis to stand on their own two feet against coastal megalopolises[7], it tacitly fails to see that St. Louis reproduced conditions of bigness on its own doorstep. The advertising agencies lauded did not hesitate to merge or swallow up competitors even with the technocratic bureaucracy of antitrust enforcers on its back. With deregulation in the 80s, its community ties withered away. This raises a wider issue, that being the death of antitrust started with its increasing bureaucratisation. The popular movement that brought these ideas forward was never nurtured. Its radical elements regularly betrayed by the military-industrial complexes built by Wilson and FDR (the supposed heroes of antitrust). As Kolko noted, the New Deal didn’t usher in a great populist wave of local market control and the breakup of monopoly, as much as regulated and technified the workings of these monopolies, supposedly increasing their efficiency and making them responsive to the public through central government control. When the movement died, it became effectively reliant on the goodwill of government bureaucracies to enforce what are socio-political commitments. And when alternative intellectual movements develop which form their own political coalitions, these technocratic foundations begin to crumble as happened during the 80s and 90s. The crux of the issue then becomes the antitrust supporters blind-spot in relation to the power of central government and its ability to remove competitive impetuses from economic systems, rewarding and subsidising incumbents.

The original antitrust legislation was described as the Magna Carta of anti-monopoly power by Thurgood Marshall. However, the power of the Magna Carta came from the fundamental ability of commoners to have access to a means of exit, their rights to common land as enshrined through the Charter of the Forest and earlier legislative acts. To maintain these rights commoners and lords of many factions rioted, rebelled and formed coalitions of alternative political power that emplaced the commons as the central thesis of their political thought and action. These riots renewed that spirit and maintained the core conviction. However with the continual erosion of these rights, removing common land and placing it under governmental or private control meant such a means of exit was removed. The ability to escape and build on the periphery meant the ability to rebuild their movement and maintain autonomy away from a centralised auspice. When that was gone, all that was left was riot and rebellion which were quickly and ruthlessly put down. When you can’t escape the swamp you’re not simply going to adapt and make yourself a key part of that environment.

The construction of an antitrust ethos followed similar paths. The development of an American frontier meant the continual to escape the manufacturing centres of the East and the central government housed their. It meant the development and preservation of autonomy through small-holdings and quasi-independent communities. When the Pacific was met that ethos didn’t suddenly disappear, but instead combined with political action which emphasised the importance of control and the ability to escape things outside of that control. The craft producers and farmers did this when they saw how railroad monopolists through government grants came to control the central infrastructure that connected regions and allowed for trade. They recognised how private bank cartels squeezed their living by limiting loans and preventing investment. I’m not trying to paint a romanticised picture, but rather emphasise that the continual desire of the populist movement that birthed antitrust was the maintenance of decentralised private and governmental power. It meant maintaining the autonomy of municipalities and communities in the American Midwest from the developments of unrepresentative government in Washington, as well as resisting the monopoly power of Eastern manufacturers who, far from gaining a competitive advantage through their legitimate actions in the marketplace, instead curried government favours through infrastructural subsidies, the development of closed business networks that shutout competition and alternative production systems, and developed a revolving between big business and big government.

This is something far more fastidious and fundamental than the simple reintroduction of antitrust laws onto the US statute books (or their re-emphasis where they haven’t been repealed). It means the development of alternative production and regulatory systems that govern the distribution of socio-economic power. As the likes of Stoller and Lynn have noted, the development of antitrust legislation started with the populist and progressive movements, and was first enacted through municipalities and states adversely affected by powerful manufacturing interests and transportation monopolies. The ethos of these movements emphasised local control, competitive markets and the limitation of central power. But with failures in the 70s to control prices and inflation, as well as the power of energy monopolies in that period, new political developments changed the emphasis of antitrust toward purely technocratic concerns. If we are to develop alternative methods for the things the populist movements originally wanted, it means re-crafting identity-making institutions that blur the lines between economic and socio-political systems, de-emphasising technocratic considerations in favour of parochial vestiges of many different shades. The textile manufacturers of Lyon developed such a system that encouraged both competition and cooperation between manufacturers and subcontractors through a variable set of contracts and price-setting agreements guaranteed through municipal legislation organised between industrial guilds, manufacturers and local political offices[8].

A system of microregulation best describes these differential systems of industrial organisation that are informed by associations of producers, contractors and employees as well as the regulatory systems organised through governments. Piore and Sabel describe four types of micro-regulatory systems: regional conglomerates, federated enterprises, solar firms and workshops. The work of Kevin Carson adds to these types, recognising a multiplicity of potential organisational forms from DAOs to 3D printing workshops for white goods that directly connect consumer and producer, removing subcontractors and middlemen. As does Marc Andreessen in his description of Silicon Valley as one model of economic administration among a variety of others that regulatory arbitrage could produce[9]. What all these systems do is re-imprint economic identity onto industrial organisation, blurring the lines between markets and social systems. A series of ethoses are produced that develop decentralised tendencies opposing the bigness of both government and business much as the original antitrust movement did.

The move toward developments of new industrial divides are produced, new “resets”[10] that open up innovative pathways for the governance of human and technological activity means applying the wider antitrust ethos, that of decentralised control and the development of seeds of activity in the cornucopia of possibilities, to both economic and governmental systems. This can be through localising governmental services and federalising those through systems of subsidiarity. Things like tax referenda, cryptocurrencies for producing new tax and financial systems[11], and data networks organised through human-machine cooperation that sorts the flow of information, transportation and capital in marketplaces, urban environments and stock markets respectively (thus combining markets with planning through analytics). Or through the development of a subsidiarised commitology of committees that includes civil society and citizen organisations who can inform policy-makers and come to agreements on fair trade and price laws. The modern progenitors of antitrust seem to think that a simple change of statute or a reimplementation of the Sherman or Clayton Acts will mean that monopoly/centralised power will be adequately combated. However the paradigm shift that occurred to change the juridical structures surrounding antitrust is not something that will be reversed by voting for populists in the Democratic Party. It requires a new paradigm shift that moves systems downwards and outwards, producing avenues for innovation and exit.

The antitrust systems that allowed for these marketplaces, industrial commons, to maintain competitiveness and allow for innovative pathways through competition and the limitation of monopoly, can be one means for the preservation of autonomous systems of economic activity that don’t rely on the bigness of any centralised auspice, but rather are the product of contractual relations and legal obligations that are a genuine Magna Carta, a system for the preservation of industrial liberties while always allowing for an ethos of exit like that amongst the frontier of the American West.








[8] Piore & Sabel, The Second Industrial Divide




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