Welcome to another installment of Compounding Interest. Please share this post and link to the site if you enjoy Exploring Capitalism.
Antitrust Redux
As I noted briefly in the last installment of Compounding Interest, there are strong signs that antitrust enforcement is set to play a major role in “guiding” the development and shape of the American economy in the next few years if not beyond. Though I noted that this came at the behest of a Biden administration bent on controlling the economy through a widespread competition policy, the revival of antitrust approaches is not limited to the current administration. Wielding the cudgel of antitrust is now becoming the favorite means to achieve goals throughout Washington and in the states. Robert Tracinski brilliantly captures the ominous dangers of this in a recent piece at Discourse Magazine. “Antitrust law is being invoked as an all-purpose tool,” he notes, “giving politicians and regulators the power to do whatever they happen to want to do for whatever reason.”
The list of reasons has now grown so broad as to include every policy aim dreamed up by any politician anywhere. Should antitrust enforcement be used against the evils of racism, sexism, and income inequality? Should it be deployed to protect “traditional” American family values, to prevent purported liberal dominance of social media, and to prohibit private social media companies from choosing not to host disagreeable users? Despite their very different partisan flavors, the issues behind both questions have found avid proponents in Congress, regulatory agencies, and the offices of state attorneys general. It’s no mistake that former President Trump made a big antitrust splash as he fought for re-election and that President Biden is now doing the same as he fights to wrangle control of the direction of Washington politics. Many partisan commentators have pointed out the flaws with the other side’s use of antitrust while remaining blind to the deepest issue. This is where Tracinski’s analysis really hits. “The root of the problem,” he explains, “lies in the fundamental subjectivity of antitrust law, which was evident from the very beginning.” Go check out the full article to see Tracinski’s deft illustration of how the inherent vagueness of antitrust is a blueprint for authoritarian economic policy.
The Same Mistake, Remix Edition
With thoughts of the partisan use of antitrust percolating in my mind, I came across an article that contained an interesting echo. Given my surprise at hearing this echo in the New York Times opinion section, and with certain caveats about my disagreements with some of the author’s assumptions and conclusions, I nevertheless think that Farhad Manjoo’s column is worth a read. Manjoo contemplates the potential outcomes of “fixing” everyone’s villain de jour, Facebook. It’s the company everyone loves to hate. In the wake of weeks of negative stories reported in the Wall Street Journal and the grand tour of Frances Haugen the whistleblower (and advocate of regulation), Facebook has continued to serve as the protean bad actor—capable of any and all sins against society and good governance. Against a background of Facebook itself making tendentious arguments to “update” how social media is regulated, it is starting to look increasingly likely that regulation will come.
The focus of Manjoo’s piece is Section 230, the notorious and notoriously misunderstood provision of Federal law that, in fine, protects internet platforms from being treated incorrectly as publishers for liability purposes. It highlights how the recently-proposed “Health Misinformation Act”—which aims to force Facebook to crack down on misinformation during public health emergencies—would only serve to exacerbate and inflame the politicization of science. More importantly, it would run roughshod over citizens’ First Amendment rights by giving fickle and partisan bureaucrats the power to demand social media censorship of speech. After reviewing other broad calls for reform of online speech, Manjoo notes, “both Trump and Biden are emblematic of a widespread misunderstanding about Section 230.” Just like antitrust, advocates for reforming or even abolishing Section 230 come from both sides of the spectrum, and both want to eviscerate its protections to serve partisan ends. Though unfortunately Manjoo concludes with a soft endorsement of regulating Facebook somehow (proposing everyone’s favorite Congressionally-appointed blue-ribbon investigative commission), the real value of the piece is when he highlights the danger of prioritizing shifting political goals over fundamental freedoms—the same issue that arises with the infatuation of both Republicans and Democrats with antitrust for political ends.
The Netflix Controversy (no, not that one)
The topic of capitalism and its supposed evils are never far from the surface in cultural debates. Every so often, the anti-capitalist types latch onto whatever thread of social commentary they can find in popular entertainment (a distinctively profit-driven industry after all) to highlight and amplify their case. The year’s winner goes to the astounding proliferation of commentary around Netflix’s Squid Game series, the latest supposed exemplar of the “horrors of capitalism.” Everyone is getting in on the game—Rolling Stone, Jacobin Magazine, BuzzFeed, and The Nation have all chimed in. College students across America are chiming in, too. Not to be lost in the shuffle, a standard North Korean propaganda site has also seized the opportunity to get some licks in against its traditional foe. Not to be outdone, other commentators have weighed in with a contrary view—Squid Game is actually a communist society. Nevermind that the creator of the show himself has identified his explicit purpose as being a critique of capitalism. Perhaps the best, or at least most entertaining, hot take on the show is a piece from Brendan O’Neill, who as a former member of the Revolutionary Communist Party in the United Kingdom knows a thing or two about critiques of capitalism. For what it’s worth, O’Neill now brands himself a “libertarian Marxist” and his political views are, well, eclectic. Still, he doesn’t have much taste for the bandwagoning thrill that seems to come with those who celebrate Squid Game’s “radical” message. As he notes:
I know the contemporary middle-class left is constantly on the prowl for flickers of radicalism – or at least what they understand radicalism to be – but the idea that millions of people eating popcorn and getting a fleeting thrill from watching people die is an expression of disgruntlement with late-stage capitalism strikes me as particularly bizarre.
It strikes me as pretty bizarre, too, but for entirely different reasons, which I’ll address in a moment. For O’Neill, the flood of commentary “confirms the extent to which anti-capitalism has become a pastime of the West’s woke elites rather than being a serious endeavour pursued by a revolutionary working class.” His condemnation of the millennial left comes from his identification of its misunderstanding of Marx and thus its misidentification of the role of capitalism in Marx’s historical worldview.
The issue I see with the commentary and the creator’s message, of course, is that it contains a truly bizarre view of what capitalism is. Leaving aside the completely arbitrary conditions of the game itself (hundreds of desperate people are effectively kidnapped to a remote location in order to play children’s games to the death for a chance to win cash prizes while anonymous billionaires watch and place bets on them), even the supposed allegorical qualities still don’t stand up. While creator Hwang Dong-hyuk may well have touched on something about how inequality and debt work in modern South Korea, that unfortunately has little to do with the nature of capitalism. Despite being a so-called Asian Tiger, South Korea is definitely not capitalist, as its turbulent political history since the end of the Korean War suggests. Though it has experienced rapid economic growth since the 1960s, this has been marked by a continuation of insular family-owned conglomerates, large state investment in heavy industry, universal military conscription for men, and significant limitations on free speech. These are hardly the hallmarks of a free society. As I discussed in an earlier piece, these kinds of contemporary “debates” about capitalism won’t get very far until we can reorient and reframe the discussion around capitalism properly understood.