Meritocracy and the decline of the Democratic Party

Meritocracy, Franks argues, is the ideology that allowed Democrats to self-consciously claim the mantle of social justice and egalitarianism while subverting both. In this framework, one’s race, creed, color, gender, or sexual orientation shouldn’t matter when it comes to achieving success in America; what does matter is having the talent and ability to graduate from a place like Harvard Law. But at the same time, meritocracy demands inequality—not everyone, after all, can go to Harvard Law or become a doctor or a high-tech executive. In fetishizing meritocracy, therefore, the Democratic Party has embraced an ideology based on inequality.

Frank contrasts this ideology with the GOP’s more traditional plutocratic one. In the United States, as elsewhere, having a lot of money gives you power. But this “hierarchy of money,” as he puts it, is rivaled by another: a “hierarchy of merit, learning, and status.” The lawyers, doctors, and academics who compose “the liberal class” (to use the journalist Chris Hedges’s term) have erected their own edifice of power—one that has also come to ignore the interests of working-class people and reproduced structures of extreme racism, particularly in the prison system.
Continue reading

Antitrust in the era of Amazon

This Note argues that the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.

Continue reading

Regulations are Protections

Here is a typical example. Minority President Trump has said that he intends to get rid of 75% of government regulations. What is a “regulation”?

The term “regulation” is framed from the viewpoint of corporations and other businesses. From their viewpoint, “regulations” are limitations on their freedom to do whatever they want no matter who it harms. But from the public’s viewpoint, a regulation is a protection against harm done by unscrupulous corporations seeking to maximize profit at the cost of harm to the public. Continue reading

Liberalism and Trumpism

By “liberalism” I mean what is considered under this term in the US. By “to blame” I mean “for the rise of Trump and  similar nationalist-populists”.

What are the arguments for seeing liberal triumphalism which began with the collapse of Communism in the 1990s as having produced the backlash we are witnessing today? I think they can be divided into three parts: economics, personal integrity, and ideology.
Continue reading

Brexit: British Business and Industries

The UK has long depended on heavy flows of investment from abroad to make up for the weaknesses in its own corporate and financial institutions. In 2015 the UK ran a deficit in its external trade in goods and services of 96 billion pounds ($146 billion in 2015), or 5.2 percent of GDP, the largest percentage deficit in postwar British historyand by far the largest of any of the G-7 group of industrialized economies. By comparison, the US ran a deficit of 2.6 percent of GDP, while Germany earned a surplus of 8.3 percent, Japan a surplus of 3.6 percent, and France broke even. In the memorable words of Mark Carney, the Canadian-born Governor of the Bank of England, the UK must depend on “the kindness of strangers” to remedy its trade gap.

The reason for this unusual dependency is that for decades the UK has been unable to produce enough goods that the rest of the world wants to buy. According to WTO statistics, between 1980 and 2011 the UK’s share of global manufacturing exports was halved, from 5.41 percent to 2.59 percent, so that by 2011, according to UN statistics, the dollar value of UK merchandise exports at $511 billion was not far off the level of Belgium’s at $472 billion, an economy with one six the UK’s population, (and not included in the Belgian figures, the value of German exports routed through Belgium ports).

Looking at export industries such as IT products, automobiles, machine tools, and precision instruments, all strongly dependent on advanced R&D and employee skills at all levels, the UK’s performance looks even worse. The period of 2005-2011 is especially revealing because it includes both the years of the Great Recession and the collapse of trade between the advanced industrial economies, but also years in which their trade with China and other BRIC economies such as India and Brazil grew rapidly. Since one of the chief claims of the Brexit campaigners has been that there are now these exciting new markets in BRIC countries waiting for British exporters to conquer, it is worth looking at how British companies actually performed during those years.

Continue reading