One of Senator Elizabeth Warren’s many gifts is that she can discuss important issues in plain language. Bill Clinton had the same ability. But her views are more progressive than Clinton’s. She will make a great president.
Below is an interview with Warren conducted by David Dayen of “The American Prospect”. It was published yesterday under the title “Monopolist’s Worst Nightmare: The Elizabeth Warren Interview”:
David Dayen: We’re doing this issue about economic concentration. And one thing I’ve noticed is that, probably since 1912 there hasn’t been this much talk about monopoly in a presidential context, in a presidential race. To what do you attribute that? I mean, why do you think this issue has inspired this interest at this time?
Elizabeth Warren: I believe the central question in America today is who government works for. Yeah, it’s got a lot of different directions, but that’s the fundamental one. Is it just going to work for the rich and the powerful, or is it going to work for everyone else? Antitrust cuts right to the heart of that. We’ve had a government that has kissed up to every giant corporation for decades. It has weakened antitrust enforcement, looked the other way on mergers, passed on deals that everyone knew were anti-competitive and would be bad for the economy and bad for competition but good for the bottom line of the companies that wanted it. And no one so much as fluttered an eyelash over it. And that’s started to change. And I think—So here’s my thinking: it’s because we’re focusing more on what’s wrong in this country. It’s not like somebody woke up and just said “antitrust”—we’re not that nerdy—but it’s about what’s wrong in this country. And as people increasingly see that the problem is not an overreaching government, the problem is a government that won’t get in the fight on the side of the people. Antitrust becomes one of the clearest places to see that.
DD: Now you did a speech at the end of 2017, you talked about this issue, and at the beginning of the speech you said something like, you know, people don’t have to know the Herfindahl-Hirschman Index to know that there’s something wrong.
DD: But how do you talk about it on the trail? How do you talk about it to really drive that home so that it doesn’t get bogged down in numbers and economic theory and stuff like that?
EW: It’s important to give examples of how it touches people’s lives. So when I talk about Amazon, for example, I talk about the platform where everybody goes to buy coffee makers and pet cookies, and that the platform works great. But that Amazon does something extra. It’s not just an ordinary marketplace. It’s a marketplace where Amazon, the owner of the platform, sucks up information from every transaction and every near-transaction, the fact that a shopper looked at the item, right, searched for the item, spent a little time hovering, it’s been in your cart.
And I talk about that. And then they use that information to go into competition with the businesses that are trying to sell you coffee makers or pet cookies. And the consequence of that is that the guy who busted his tail, figured out the pet cookie business, got out there and marketed it—Amazon looks over the edge and says, hmm, profit to be made there, let’s do pet cookies, don’t even identify it as an Amazon business, and move the guy who built this business back to page seven in the search. Routine, and now Amazon has sucked up one more business.
DD: The other issue with Amazon is, that pet cookie business, they take a cut out of every transaction he makes anyway.
EW: Exactly, exactly.
DD: And they can raise that price, they can change and say, “Oh, we’re charging more for shipping now, we’re charging more for storage now.”
EW: Every part of it. So, in other words, the way I describe that particular point is, it’s like baseball. You can run the platform—that is, you can be an umpire—or, you can have a team in the game—that is, you can run competition against others who are trying to sell the items. But you don’t get to do both at the same time. And people in the room all say, “Right.” That makes sense to me.
DD: You just break it down and it makes sense.
EW: That’s right.
DD: So we’ve seen, very recently, these hearings in the House on the digital platforms.
DD: And, you know, I’m wondering about your thoughts on the role of Congress in this policy. These are policies that Congress wrote, that they have oversight function on. You know, in the ’40s we saw something called the Temporary National Economic Committee, which was a series of investigations into all sorts of sectors over the economy. Do you think, is that something we need now? How can Congress get involved in this?
EW: Okay, I’m glad to see Congress doing this. I think it’s great. I want them to call witnesses, to let people tell their stories, I want them to expose the data. I want to see the books and records of some of these companies. Remember, Congress has got a lot of muscle if it decides to use it. But I want to make two other points. The first is current law gives the Justice Department and the FTC and the banking regulators a lot of power to move now. Even without Congress, a president who put a strong team in place could change antitrust enforcement in this country, without a single change in the laws from Congress.
DD: And it’s interesting you say the banking regulators, because people don’t realize how much power is in, you know, other agencies, not just the FTC and the Justice Department.
EW: Exactly right. I picked banking, but you’re exactly right. But it’s the reminder—There’s a lot we could do right now. But also, and this is what I argue should come out of all this, there are places where Congress should draw a bright line in this. So I have a plan to break up the big platforms. If a platform is doing more than a billion dollars in business, the platform has to be broken off from all of the ancillary businesses. And there’s just—We shouldn’t have to litigate it. Just make it happen. It’s too much concentration of power. And so I’m both ways on this: there’s a lot we can do without—I’m delighted Congress is doing this. There’s a lot we can do, even if Congress doesn’t change any law. But, there is at least one good place Congress could change the law and make this whole system work better.
DD: You mention your plan on the platforms, but you’ve also made the point that if we broke up Google and Amazon and Facebook tomorrow, we’d have a terrible concentration problem in America.
EW: Oh, it’s much broader than just that. Platform is such an obvious one and we’ve—
DD: And everyone interacts with it.
EW: That’s exactly right … the analogy from history where someone—one business—could not only control the marketplace, but also be a dominant player in the marketplace simultaneously. It’s not that you can’t find them in history. It’s that when we found similar economic concentrations in history, we broke them up.
DD: Sure, sure.
EW: Especially when they started buying everything else. And then, of course, doing—as I recall in the railroads—doing a discriminatory pricing map. Charge themselves a different price from [someone else’s] grain outfit.
DD: Absolutely. So, I mean, the sort of elephant in the room on this is the judiciary, which has a very particular theory and view of antitrust and even if you put in enforcers that want to take that in a different direction, you still have to argue that in court. So what do you think can be done there? I mean, obviously a new president would have judicial nominations, but you know, that’s going to take some time, so how—Is there a way to sort of get the judiciary to realize that they need to do their part here?
EW: Use every tool in the toolbox. So part of it is get an aggressive antitrust team. Part of it is presidential leadership. Get out and talk about this issue. And explain to the American people why the laws are working for the big guys and not for them. Encourage the academics to get out and make their case. Remember—
DD: The ones not on the payroll—
EW: … That’s exactly right. Remember, it was the academics that got this started in the wrong direction, arguably.
DD: I would argue that as well.
EW: Yes, exactly, so I think it’s all of the above. And, at the same time, move on the congressional front. I just don’t want this to feel like, gee, if we can’t move Congress, we can’t do anything. No. Bang away without Congress, but also, bang away on Congress to make change. Just move on all the fronts.
DD: Excellent, excellent. And finally, there’s a famous—It was Richard Hofstadter wrote this thing in the ’60s. And he said—And the title of it was “What happened to the antitrust movement?”
DD: That there was a movement that created all these laws and then the movement sort of went away and said, “Regulators will take care of it.” It seems like a movement is what is necessary at some level, and how do you inspire that?
EW: Okay, now let’s move back up to the 10,000 feet where we started this, because I think that’s what this is all about. When we started this conversation, I said that I think the question is who government works for. I think much of the antitrust relaxation over time in the ’60s was confidence the government would handle this. Confidence that we had regulators who knew their stuff and who were technically adept and who had shown that they would be on the side of the American public. And when the big corporations started pushing back, started advancing the academic work that said, “No, let the giant corporations do whatever they want. What could possibly go wrong?”—That it’s taken a long time for people to see the implications of that. Look, for 40 years now, the mantra in Washington and in most of the Republican Party and a big chunk of the Democratic Party has all centered around Ronald Reagan’s “What are the nine worst words in the English language? I’m from the government and I’m here to help.” Ha ha ha. The idea that it’s government that poses the threat to all of the rest of America and must be held at arm’s length, and missing the fact that it’s government that balances out the power of these giant corporations. And without an effective government to enforce antitrust laws—and other laws—we’re all in trouble.
DD: Well, it’s the idea that if there’s—If government takes away the regulation, the regulation doesn’t go away, it’s just in the hands of the giant corporations.
EW: It’s just in the hands of the giant corporations.
DD: So they get to do regulation from the boardroom.
EW: And that’s how we keep hearing lately about self-regulation. Aircraft manufacturers that self-regulated; how did that work out? You know, it’s—But it’s over and over. It’s wait, what? They’re doing what? The oil companies that were doing the drilling offshore were self-regulating? You know, they filed some reports that nobody read. That’s not a government that’s working for the public. So when you say about, is it going to take a movement? The answer’s yes. That is the movement we’re starting to build.