The rise of the kitchen table economy

It’s not often that a Pulitzer Prize-winning playwright delivers the keynote speech at a competition policy conference. But last week in Washington, I introduced PEN America President Ayad Akhtar before he delivered the lunchtime address at a conference on monopoly politics sponsored by the Open Markets Institute.

The pairing wasn’t as accidental as it might seem. The narrator of Akhtar’s latest book, homeland elegies, is a Pakistani immigrant whose family came to the land of opportunity to find that America had transformed over time into a country where hyper-individualism collided with the culture of money. The result? A society where shareholder rights are easier to protect than civil rights.

The novel, which is read in book clubs across America, not only contains lengthy excursions into antitrust jurisprudence, but also critiques of financialization and for-profit healthcare. It also examines all the ways in which “protecting the consumer’s right to ‘lowest price’ as the overriding principle has worked The legitimizing discourse on the takeover of the political process by big (and growing) corporations,” as Akhtar put it. “In other words, our political order – by which I don’t just mean legislation – is increasingly determined by entrepreneurial thinking and interest.”

When monopoly power becomes a kitchen table issue in America, something embedded in popular fiction, business leaders should listen carefully. The popularization of antitrust law is part of a much larger shift in which economic policy debates increasingly fall into the purview not only of economists but also of lawyers, activists and ordinary people. These groups are less interested in technocratic debates about market mechanisms than in a grassroots discussion of how corporate power has distorted the market in ways they find absurd.

Consider purchase contracts that make it impossible for farmers to repair their own equipment instead of paying for the manufacturer’s costly services. Or the minimum-wage cleaners adhered to non-compete clauses that prevented them from doing janitorial work for a company that might offer a dollar or two more an hour. Or the fact that until recently, simple over-the-counter hearing aids weren’t available because device manufacturers made it impossible to buy them without an expensive prescription (Senator Elizabeth Warren’s bill repealing that in 2017 was one of the few things she and Donald Trump agreed).

Part of this shift towards kitchen-table sensitivity in competition policy is due to a growing public perception that the economic profession itself has been hijacked by corporate interests. As Cristina Caffarra, an economist and consultant on hundreds of mergers and acquisitions, put it at the event, “Economists invent useful narratives and sell them to lawyers.” They then use this seemingly scientific testimony to argue their cases.

But current regulators in Washington are much less interested in economic assumptions about how markets, many of which are increasingly being questioned, particularly in the digital space, should work. Instead, they prefer a more inductive approach to truth, where facts are presented in a reported manner and judged on their own worth.

This type of approach brought Federal Trade Commission Chairwoman Lina Khan and Justice Department antitrust chief Jonathan Kanter to their positions. Her starting point is that the economy is structured by politics, and politics tends to be structured by the people with the most money. Therefore, traditional economic theories about markets are no more or less useful than the collection of real facts that both sides can bring to a case.

As Kanter put it, seated on one of the panels, “The discussion [about corporate power] It’s about real people now, and it’s very different from the technocratic conversation we had when I came into the field. And I think it’s crucial to have an honest conversation.” For him, thinking about antitrust policy should include anything that makes it impossible for individuals to have full autonomy, in terms of being able to make the decisions that suit them could lead to a better life. This is an antitrust philosophy much more aligned with the ideas of constitutional democracy than the Chicago School.

It is also a broad definition that has yet to be fully proven in court. Despite more federal funding, more state antitrust cases, and an explicit 2021 White House executive order detailing 72 separate initiatives by federal agencies to address competition issues, the global mergers and acquisitions market hit an all-time high in 2021 (but 2022 numbers were lower, yet healthy in the compared to before the pandemic).

Perhaps that’s why Warren, who also attended the conference, called for an even broader competitive agenda that went beyond her arguments about busting big tech. Among other things, she called on politicians to resolutely oppose more questionable mergers instead of using “cures” (which are expensive to enforce and easy to play), make executives personally liable in criminal cases when their companies violate antitrust laws, and freeze private-sector stocks -Roll-up strategies. Warren has a record of setting the political agenda in antitrust. CEOs should monitor this area carefully.

rana.foroohar@ft.com