#CRESSE2024 in Crete is the (unmissable) European Summer conference on IO economics & antitrust policy. At the Temple of orthodoxy, was putting forward an unwelcome motion: “The Case for a Political Economy View of Antitrust”. Grateful to Becca Kelly Slaughter for joining the fireside from DC, and Jan Eeckhout as fellow mischief maker… also to Yannis Katsoulacos, splendid organizer, giving us the stage.

IO is the self-appointed “science” dominating antitrust as we have been practicing it in the last 20 years (in Europe, a bit longer in the US), as foistered on us by the silent neoliberal coup of the 1980s which shifted us away from fighting corporate power & its pathologies to a technocratic efficiency-based view where we told each other monopolies can be lovely, we just object to them if they get a little abusive, and you know, Type 1 error.

We face power on unimaginable scale, companies can say to governments “my market cap is bigger than your GDP”. And yet we still twist ourselves into narrow spirals looking at one little bit of conduct at a time. Ecosystems? “No, nothing new here, we can deal with all that, indeed we have LOTS of models! and we need to be careful when trading off benefits of mergers today w hypothetical long-term harm”! (good Hans Zenger, but true comments on ecosystem panel – my head exploding).

In the current political economy, the reality before us is so graphically problematic, how can we not see the relevance of concentrated economic power & its terrifying implications for democracy? How can we be so confident in “our tools” when we achieved so little? In a recent IMF blog, Nobel winner Angus Deaton said “Economics has achieved much… BUT we overlook power: Our emphasis on the virtues of free, competitive markets distracted us from the importance of power… Without an analysis of power, it is hard to understand inequality or much else in modern capitalism…We have largely stopped thinking about ethics… We are technocrats who focus on efficiency…. we valorize it over other ends. Economists say they focus on efficiency and leave equity to others, politicians or administrators. But the others regularly fail to materialize, so our recommendations become a licence to plunder…“

Becca Kelly Slaughter discussed reframing antitrust as “power not price”, refocusing on citizens, workers’ rights, small businesses. This is NOT populism, and doesnt mean one is “turning antitrust political”. Also need to “zoom out” and broaden the perspective from narrow legal/economic tools to a wider lens.

Jan Eeckhout‘s wonderful run through his seminal work on rise in concentration, rents shifting to capital away from workers, markups increasing, dynamism down, inequality up. We need more resources to enforcement (compare to spending on financial stability, antitrust is a fraction) and need to think of regulating hyperscalers like utilities. The political economy has dramatically evolved, tools cannot be the same.

Great session. Listen to the audio below.