WEBVTT - Matt Stoller Explains Monopolies 0:00:02.440 --> 0:00:03.560 All Zone Media. 0:00:05.000 --> 0:00:07.800 Hello and welcome to Better Offline. I'm your host ed Zetron. 0:00:19.880 --> 0:00:22.600 Today we're talking monopolies, and I'm joined by Matt Stoler, 0:00:22.720 --> 0:00:25.480 who covers market power and antitrust for The Big Newsletter 0:00:25.640 --> 0:00:28.080 and is the director of research at the American Economic 0:00:28.160 --> 0:00:30.280 Liberties Project. Matt, thank you for joining me. 0:00:30.760 --> 0:00:31.639 Hey, thanks for having me. 0:00:32.520 --> 0:00:34.839 So this is a very dumb place to start, but 0:00:34.880 --> 0:00:38.199 I think it's necessary. What exactly is a monopoly. 0:00:38.600 --> 0:00:43.080 Not a dumb place to start at all. There are 0:00:43.120 --> 0:00:48.360 different definitions, but generally speaking, it is the control of 0:00:48.400 --> 0:00:53.280 a recognized branch of trade or service, a unified control 0:00:53.720 --> 0:00:57.560 of recognized trade or service. And that's a definition I'm 0:00:57.560 --> 0:01:02.600 giving you from Lewis Brandeis, who was a Supreme Court justice, 0:01:02.840 --> 0:01:05.840 but it's the same. I think Milton Friedman had a 0:01:05.959 --> 0:01:08.400 kind of a similar definition. The essence of a monopoly 0:01:08.440 --> 0:01:11.640 is control of a market or a recognized trade. 0:01:12.440 --> 0:01:15.560 And what the most people not actually understand about them what. 0:01:15.800 --> 0:01:18.480 I think most people characterize monopoly as kind of an 0:01:18.520 --> 0:01:22.840 economic thing or you know, just a commercial thing, but 0:01:23.720 --> 0:01:27.679 really a monopoly is a political institution. So when we're 0:01:27.720 --> 0:01:31.800 talking about monopolies, we're talking about what is effectively a 0:01:31.840 --> 0:01:35.920 private government over a market, over an industry. If you're 0:01:35.959 --> 0:01:39.160 in that trade right, or that service, if you ply 0:01:39.319 --> 0:01:42.559 your trade there. If you're operating in a market which 0:01:42.600 --> 0:01:46.400 is monopolized, then you have a political boss who sets 0:01:46.440 --> 0:01:49.160 the prices, the terms of trade, who can buy, who 0:01:49.200 --> 0:01:53.680 can sell, and you're under their thumb and yeah, it's 0:01:53.720 --> 0:01:57.160 your trade right. So it looks like the quote unquote economy, 0:01:57.520 --> 0:02:01.280 but in fact it's really a person has or that 0:02:01.400 --> 0:02:03.680 firm has political power over you. And if you have 0:02:03.800 --> 0:02:07.000 enough monopolies in an economy, then at least in the 0:02:07.000 --> 0:02:09.360 commercial sector, which is a big part of our lives, 0:02:09.600 --> 0:02:12.720 we're not living in a democratic society. We're living in 0:02:12.760 --> 0:02:16.760 a society of a of a bunch of of private governments, 0:02:16.800 --> 0:02:18.800 authoritarian governments over markets. 0:02:19.760 --> 0:02:22.600 So Son Dapashi of Google would be like the president 0:02:22.680 --> 0:02:25.160 of his private monopoly, his little private I think that. 0:02:25.480 --> 0:02:28.080 I think that's right if you if you think about 0:02:28.160 --> 0:02:30.520 how people you know, there was a there's a good 0:02:30.600 --> 0:02:34.040 quote that from a plumber actually in the in the 0:02:34.080 --> 0:02:37.119 Wall Street Journal who said that, you know, the government 0:02:37.280 --> 0:02:40.680 can find me, but Google can put me out of business, right, 0:02:40.760 --> 0:02:44.679 because Google could take his business off Google Maps. They 0:02:44.720 --> 0:02:49.560 could they could change his ranking in Google Search, and 0:02:50.240 --> 0:02:54.040 so he was way more afraid of Google than than 0:02:54.080 --> 0:02:58.200 the government. And that's that's because Google has governing power 0:02:58.320 --> 0:03:00.560 over you know, over the Internet. You can see this, 0:03:00.760 --> 0:03:04.000 like every publisher can tell you that the change in 0:03:04.040 --> 0:03:07.600 Google's algorithm can be catastrophic or can be you know, 0:03:07.840 --> 0:03:13.040 hugely important and pactful in some ways. So yeah, very much. So. 0:03:13.160 --> 0:03:16.320 Google is the private government of the Internet, or at 0:03:16.400 --> 0:03:19.720 least the gatekeeper of the Internet. And it is exactly 0:03:19.800 --> 0:03:22.200 it's exactly what you're talking about. They also have political 0:03:22.280 --> 0:03:24.760 power because they're a big company and they lobby and whatnot. 0:03:24.800 --> 0:03:27.720 But just as infrastructure, they are governing that infrastructure. 0:03:27.919 --> 0:03:30.760 Almost feels like Yelp is like a borough of the 0:03:30.840 --> 0:03:34.360 larger Google country than Yelp controlling the reviews, and Yelp 0:03:34.440 --> 0:03:36.600 has a weird little mob like thing they do where 0:03:36.600 --> 0:03:40.360 you have to pay them to get rid of bad reviews. Now, 0:03:40.560 --> 0:03:43.880 it's very never really thought about the governmental comparison. 0:03:43.880 --> 0:03:45.440 Right, I mean, so what you have with something like 0:03:45.520 --> 0:03:49.520 Yelp is because Yelp is under the control of Google, right, 0:03:50.960 --> 0:03:52.960 And Google is doing all sorts of things to sort 0:03:53.000 --> 0:03:57.560 of try to kill Yelp yelp, and Google has monopolized 0:03:57.560 --> 0:04:00.839 to advertising, right, a company like it kind of has 0:04:00.960 --> 0:04:04.400 no choice but to move towards a kind of sleazier 0:04:04.480 --> 0:04:09.920 business model where they're extractive, because all of the other 0:04:10.040 --> 0:04:12.960 areas where they could legit make more legitimate money have 0:04:13.040 --> 0:04:15.440 been monopolized by Google or have been taken by Google. So, 0:04:15.520 --> 0:04:19.279 in one sense, what happens when you have monopolies, you 0:04:19.320 --> 0:04:20.960 have you know, higher prices and all the rest of it. 0:04:21.000 --> 0:04:24.320 But another thing that happens is that businesses that are 0:04:24.839 --> 0:04:32.240 operating often have a choice of continuing in existence or not. 0:04:32.520 --> 0:04:36.200 And the choice of whether to continue in existence is 0:04:36.240 --> 0:04:39.800 often to go down through a business model that can 0:04:39.880 --> 0:04:43.120 look sleazier, can be problematic, or can be coercive. And 0:04:43.160 --> 0:04:45.159 so it's like that's that's the choice. Do you go 0:04:45.160 --> 0:04:47.040 out of business or do you this do this thing 0:04:47.080 --> 0:04:49.719 that you know you don't like. Is there's a law, 0:04:49.839 --> 0:04:53.440 there's a rule of thumb called Gresham's law about counterfeit money, 0:04:53.720 --> 0:04:56.599 which is, you know, when somebody starts using counterfeit money, 0:04:57.040 --> 0:05:00.880 then nobody wants to use real money. Because even if 0:05:00.920 --> 0:05:02.560 you want to use real money, you know, you're like, 0:05:02.600 --> 0:05:04.120 I'm not going to put real money out there if 0:05:04.120 --> 0:05:04.920 it's all counterfeit. 0:05:05.000 --> 0:05:07.719 So yeah, the drive with the counterfeit has the advantage, 0:05:08.120 --> 0:05:09.760 right rules. 0:05:09.600 --> 0:05:11.680 Good money drives out the bad. And so this is 0:05:11.760 --> 0:05:13.599 one of the things you see. For example, when you 0:05:13.640 --> 0:05:17.720 go to like a like a expeedyer or something like that, 0:05:18.080 --> 0:05:20.800 and you're hotels dot com. You're looking for, you know, 0:05:20.839 --> 0:05:24.640 to book something, they don't show the you know, resort fees, 0:05:24.680 --> 0:05:27.039 the junk fees until you know, you get to the 0:05:27.120 --> 0:05:29.920 last page where you're going to check out, or sometimes 0:05:29.920 --> 0:05:31.880 even when you get to the hotel. And it's not 0:05:31.920 --> 0:05:34.720 that every hotel wants to rip you off, but they 0:05:34.800 --> 0:05:37.560 all know that you're going to be looking at the 0:05:37.560 --> 0:05:40.880 price and comparing the sticker price that you see on 0:05:41.480 --> 0:05:46.440 the on the results page, and if their rival is 0:05:46.480 --> 0:05:50.160 not is not showing you that junk fee, then they're 0:05:50.200 --> 0:05:53.080 at a competitive disadvantage if they don't lie. 0:05:53.120 --> 0:05:57.560 So yeah, yeah, well so well it's it's it's just 0:05:57.640 --> 0:06:01.960 that a market where you have rules that enable that 0:06:02.040 --> 0:06:06.040 allow fraud is just a different market than one where 0:06:06.080 --> 0:06:07.159 we don't allow fraud. 0:06:07.200 --> 0:06:10.440 It's just there. You know, there's discussions about capitalism or 0:06:10.480 --> 0:06:13.000 free markets or whatever. But the fact that you use 0:06:13.080 --> 0:06:17.560 the term market doesn't mean anything because markets are politically structured, 0:06:17.600 --> 0:06:21.479 like a farmer's market, a derivatives market, a slave market. 0:06:21.560 --> 0:06:24.400 They all use the term market. They're very different institutions, 0:06:24.600 --> 0:06:28.320 very different moral elements underpinning them, very different arrangements of power. 0:06:29.279 --> 0:06:32.080 So you've said something you wrote and deep, well it's 0:06:32.080 --> 0:06:35.640 also on your main page. Is America's in a monopoly crisis, right? 0:06:35.680 --> 0:06:36.279 What you mean? 0:06:37.360 --> 0:06:40.080 So what you haven't in a lot of areas and 0:06:40.120 --> 0:06:44.000 in most I think monopoly or oligopoly, which is just 0:06:44.080 --> 0:06:47.240 a small number of companies controlling a market is now 0:06:47.279 --> 0:06:50.880 a systemic feature of the American economy, and it didn't 0:06:50.960 --> 0:06:53.600 used to be. So there are different ways to measure it. 0:06:53.720 --> 0:06:58.160 But you know, about seventy five percent of industries in 0:06:58.200 --> 0:07:03.520 the last twenty five years have gotten more consolidated, and 0:07:03.839 --> 0:07:06.719 so you see, you know, and this is largely through mergers. 0:07:06.880 --> 0:07:09.680 So another statistic would be, you know, there's something called 0:07:09.680 --> 0:07:13.040 the Wilshire Wilshire five thousand, which is an index of 0:07:13.360 --> 0:07:17.160 public companies, and we don't have enough public companies for 0:07:17.200 --> 0:07:19.800 the Wilshire five thousand. They're only about thirty four hundred 0:07:19.920 --> 0:07:23.640 public companies. Now there used to be around nine thousand 0:07:23.720 --> 0:07:25.920 in the nineties. Now we have around thirty five hundred. 0:07:25.960 --> 0:07:28.720 It's largely because of mergers. Even the country per capitis, 0:07:28.960 --> 0:07:32.960 you know that the decline is even more significant. So 0:07:33.160 --> 0:07:36.360 just the number of big companies is smaller because companies 0:07:36.360 --> 0:07:38.960 have gotten you know, they've merged and gotten much much bigger, 0:07:39.800 --> 0:07:41.920 and this has a lot of consequences. What you see 0:07:42.000 --> 0:07:45.520 is wages are much lower than they otherwise would be. 0:07:45.560 --> 0:07:49.520 So the amount spent on employees with either increased wages 0:07:49.600 --> 0:07:53.520 or healthcare or training is probably between fourteen and twenty 0:07:53.600 --> 0:07:58.600 thousand dollars per American in the non in the non 0:07:58.640 --> 0:08:02.880 financial corporate sectors eighty million Americans. You see things like 0:08:02.920 --> 0:08:07.080 the cost of healthcare, which is largely driven by market power, 0:08:07.120 --> 0:08:13.280 consolidation in hospitals, pharmaceutical companies, insurers. The price of an 0:08:13.280 --> 0:08:16.880 insured family of four has gone from about ten to 0:08:16.920 --> 0:08:19.640 fifteen thousand dollars a year in two thousand and eight 0:08:19.720 --> 0:08:22.920 to about thirty thousand dollars a year today. So that's 0:08:23.160 --> 0:08:25.680 you know, a lot of the you know, lack of 0:08:25.760 --> 0:08:29.320 increase of compensation and wages. If you just take those 0:08:29.320 --> 0:08:33.320 two facts of just how much lack of ability to 0:08:33.360 --> 0:08:36.400 move to a new job because of consolidation. That's fifteen 0:08:36.400 --> 0:08:39.920 to twenty thousand dollars plus the increase that we're paying 0:08:40.080 --> 0:08:43.920 in healthcare. That's a lot of money. And that's you know, 0:08:44.200 --> 0:08:48.320 every single year, it's basically almost a new car every 0:08:48.360 --> 0:08:53.280 single year. That's just extracted from every family by this 0:08:53.440 --> 0:08:55.160 increased amount of concentration. 0:08:55.360 --> 0:08:58.280 And do you have less ability to move because there 0:08:58.280 --> 0:08:59.679 are just less places to work? 0:09:00.040 --> 0:09:02.120 Yeah, that's I mean, that's right. There's just like if 0:09:02.160 --> 0:09:04.840 you it used to be that you had, say you 0:09:04.880 --> 0:09:07.440 were in a town, you had ten stores, the you know, 0:09:07.640 --> 0:09:11.240 a couple of dry goods stores and grocery stores, butcher 0:09:11.520 --> 0:09:13.840 you know, like your you know, your standard main street, 0:09:14.280 --> 0:09:17.319 and then that all got put under one roof Walmart, 0:09:18.000 --> 0:09:20.839 and so you have one place to work and all 0:09:20.840 --> 0:09:23.719 the stuff is sold there, and now you don't have 0:09:23.880 --> 0:09:26.760 any place to bargain as if you're a worker or 0:09:27.160 --> 0:09:28.680 if you want to set up a store, you can't 0:09:28.679 --> 0:09:31.199 do that either because for you know, other reasons, because 0:09:31.240 --> 0:09:34.280 that Walmart has more bargaining power with suppliers, and so 0:09:34.440 --> 0:09:36.480 you can't compete. Even if you had a you could 0:09:36.480 --> 0:09:39.000 do it more efficiently, you still couldn't compete because you 0:09:39.000 --> 0:09:41.040 couldn't get the supplies that you needed, or you couldn't 0:09:41.040 --> 0:09:42.440 get them at the best at the same price. 0:09:42.559 --> 0:09:45.199 And that sounds like another manifestation of the political nature 0:09:45.240 --> 0:09:48.320 of these companies because they just set the terms that 0:09:48.400 --> 0:09:51.480 customers will expect and businesses have to operate with. 0:09:51.600 --> 0:09:53.800 Yeah, I mean Walmart in the nineteen nineties and two 0:09:53.840 --> 0:09:56.000 thousands as it was growing, and there are political reasons 0:09:56.000 --> 0:09:57.760 that were there were just changes in pricing law and 0:09:57.800 --> 0:10:00.320 anti trust laws. But Walmart would literally just go to 0:10:00.360 --> 0:10:06.079 their suppliers and they would say, okay, you Levi Strauss, 0:10:06.200 --> 0:10:09.040 you're not making your genes in China. We want you 0:10:09.120 --> 0:10:12.959 to move production to China. That's if you want to 0:10:12.960 --> 0:10:15.040 get into Walmart, and you need to get into Walmart 0:10:15.040 --> 0:10:17.880 because we are eight nine percent of the retail dollar 0:10:17.920 --> 0:10:20.720 and you need it, You're going to do this. And 0:10:20.760 --> 0:10:23.800 they just did this across the board, and they literally 0:10:23.840 --> 0:10:27.199 restructured how American production happens because. 0:10:27.040 --> 0:10:30.520 Was that to lower prices? Was that too? Why did 0:10:30.520 --> 0:10:32.079 they want them to move to China. 0:10:32.640 --> 0:10:35.800 Lower prices usually? But also you know, they had they 0:10:35.800 --> 0:10:38.520 had specific ways that they wanted to see their their 0:10:39.120 --> 0:10:43.440 their business operate, so they just want control. I mean 0:10:43.440 --> 0:10:47.360 there are other things that they did that are actually 0:10:47.440 --> 0:10:52.800 really interesting to restructure how retail works. But yeah, it 0:10:52.840 --> 0:10:55.040 was largely a price. It was a price element. 0:10:55.240 --> 0:10:57.480 And is the crisis that these there were just so 0:10:57.600 --> 0:11:01.200 many of these little moving within America. 0:11:02.080 --> 0:11:05.200 You mean that there's so many mononoply crisis, Yeah, I 0:11:05.200 --> 0:11:08.760 mean the crisis is that we have you know, as 0:11:08.840 --> 0:11:11.839 people get used to being bossed around, they lose their 0:11:11.880 --> 0:11:17.280 respect for democracy itself, right, I mean, that's that's the ultimately, 0:11:17.360 --> 0:11:20.320 like you see a ton of cynicism. And I think 0:11:20.360 --> 0:11:23.200 the reason that there's all of the cynicism about the 0:11:23.280 --> 0:11:25.360 rule of law, about the idea of living in a 0:11:25.400 --> 0:11:29.479 society is because most people experience living in an authoritarian 0:11:30.280 --> 0:11:32.200 part of their lives. I don't want to overstate it. 0:11:32.240 --> 0:11:34.280 We're not living in a dictatorship or anything. This is 0:11:34.280 --> 0:11:37.120 still a democracy. But you know, you get bossed around 0:11:37.160 --> 0:11:39.360 and you get told you can't mean, the amount of 0:11:39.400 --> 0:11:42.880 fear in commerce is overwhelming at this point. When you 0:11:42.880 --> 0:11:45.000 when you talk to people in lots of different areas, 0:11:45.240 --> 0:11:48.559 they're afraid to talk about what's going on in their industry. 0:11:49.120 --> 0:11:54.000 Because the monopolists can can retaliate against them. And so 0:11:54.080 --> 0:11:56.880 if you're living in fear, then you're not living, You're 0:11:57.200 --> 0:11:59.400 you're not free, right. You may not be living in 0:11:59.400 --> 0:12:00.840 a dictatorship, but you're not free. 0:12:01.880 --> 0:12:04.120 That's interesting as well, because so much of what I've 0:12:04.120 --> 0:12:08.160 talked about with the Valley is this without really framing 0:12:08.160 --> 0:12:11.160 it like you are, which is people fear. Samultman of 0:12:11.200 --> 0:12:14.719 Open Ai, he's grown big because people fear his existence, 0:12:14.760 --> 0:12:18.040 what he may say about them read Hoffmann right, same deal, 0:12:19.360 --> 0:12:21.920 And just the political nature of these institutions. I never 0:12:21.960 --> 0:12:24.360 really considered is this how it got so bad that 0:12:24.400 --> 0:12:26.880 the corporation's kind of got this level of power. 0:12:27.640 --> 0:12:31.760 So it's interesting the story of why this happened is 0:12:31.800 --> 0:12:35.840 actually not a story of big corporations seizing power, because 0:12:35.920 --> 0:12:39.720 we didn't actually have this problem in the nineteen seventies 0:12:39.760 --> 0:12:41.600 and before that. I mean, you know, there's always like 0:12:41.679 --> 0:12:44.599 some big companies, and there's always some problems here but 0:12:44.880 --> 0:12:46.920 here and there. But largely this is a story of 0:12:47.000 --> 0:12:53.320 bad ideas taking over. So what happened in the we 0:12:53.440 --> 0:12:58.000 had this populist tradition in America, right, which you can 0:12:58.120 --> 0:13:01.400 you can find this you know, really the the original 0:13:01.480 --> 0:13:03.520 Populace was a political party in the eighteen eighties and 0:13:03.559 --> 0:13:06.400 eighteen nineties. They were farmers from the South and the Midwest. 0:13:06.559 --> 0:13:09.559 They were upset about a number of different changes in 0:13:09.600 --> 0:13:13.280 the economy, the dominance of railroads, dominance of large banks. Basically, 0:13:13.360 --> 0:13:17.240 they were mad about Eastern capital controlling their business and 0:13:17.679 --> 0:13:21.600 making it hard to make a living selling farm products. 0:13:22.080 --> 0:13:26.160 And you control by processors, controlled by railroads. This is 0:13:26.280 --> 0:13:29.679 very similar stuff that we're seeing today. So standard oil. 0:13:29.679 --> 0:13:32.000 I didn't like that, But you could go back, you 0:13:32.000 --> 0:13:33.480 could find this, you know, you go back in the 0:13:33.520 --> 0:13:37.079 sixteen hundreds and find antecedents in England and so on 0:13:37.120 --> 0:13:40.480 and so forth. There has always been this tradition of 0:13:40.960 --> 0:13:42.960 let's not have too much. No one should have too 0:13:43.040 --> 0:13:46.559 much power in America, right, that's the checks and balances things, 0:13:46.600 --> 0:13:50.240 the federalist papers and whatnot. Also, no one should have 0:13:50.360 --> 0:13:52.600 there we should try to avoid conflicts of interest. I mean, 0:13:52.640 --> 0:13:55.160 that's in the Bible. No man may serve two masters. Right, 0:13:55.400 --> 0:13:57.679 So you have this these two sort of basic themes, 0:13:58.240 --> 0:14:01.760 checks and balances, no conflicts of interest. And we've we've 0:14:01.800 --> 0:14:04.800 always kind of understood that that's the way that we 0:14:05.080 --> 0:14:09.079 should arrange our society. Very bitter fights in the nineteenth 0:14:09.120 --> 0:14:13.240 century over corporate chartering. We regulated our corporusiness idea that 0:14:13.280 --> 0:14:15.360 we used to be less a fair and that's always nonsense. 0:14:17.000 --> 0:14:18.760 Just corporate chaltering. What do you mean that? 0:14:19.480 --> 0:14:21.960 So just the idea of being able to charter a 0:14:21.960 --> 0:14:25.320 corporation create a pupka idea, you can form one, yeah, 0:14:25.360 --> 0:14:28.080 being able to form one limited liability corporation where I, 0:14:28.280 --> 0:14:32.200 if my corporation does something, it's liable, but me as 0:14:32.200 --> 0:14:35.280 a human being that runs it is not right. An 0:14:35.320 --> 0:14:40.760 eternal entity that like you, doesn't die, is not a 0:14:40.840 --> 0:14:43.160 natural person, but can conduct business as if it is 0:14:43.200 --> 0:14:46.080 a natural person. That wasn't That was an innovation in 0:14:46.120 --> 0:14:48.920 the nineteenth century. It's not something that ever anybody could get. 0:14:49.120 --> 0:14:51.200 There were all sorts of fights over who could charter 0:14:51.280 --> 0:14:55.560 it for what reason. Originally it was academic institutions, municipalities. 0:14:55.760 --> 0:14:59.400 They didn't allow anyone to just charter a corporation. And 0:14:59.480 --> 0:15:02.280 because they were like this can be really dangerous. Corporations 0:15:02.280 --> 0:15:06.200 were originally chartered to allow the pooling. You know, eventually 0:15:06.200 --> 0:15:08.520 they started to charter them in business and they said 0:15:08.520 --> 0:15:12.240 you can pool capital and men to build things of 0:15:12.280 --> 0:15:14.360 public works and make a little profit, and we're going 0:15:14.440 --> 0:15:16.800 to put very restrictive confidence in there. And it was 0:15:16.920 --> 0:15:19.920 very restrictive until the eighteen eighties and eighteen nineties, and 0:15:19.960 --> 0:15:23.600 that's when you started to see federal antitrust laws because 0:15:23.720 --> 0:15:26.120 the state chartering didn't work as well, and so we 0:15:26.160 --> 0:15:28.720 needed a new regulatory regime, and that was the that's 0:15:28.720 --> 0:15:33.320 when we got into the federalization of it. But that's 0:15:33.400 --> 0:15:36.320 the story. The story is we've always kept a tight 0:15:36.440 --> 0:15:41.120 rain on commercial concentrations of power. In the nineteen seventies, 0:15:41.160 --> 0:15:44.360 there were sort of two different political and intellectual movements 0:15:44.360 --> 0:15:47.720 that came that won the debate. Each one within the 0:15:47.720 --> 0:15:52.080 Republican Party, one within the Democratic Party, the Republican the debate. 0:15:52.320 --> 0:15:54.640 The one on the right was the Chicago School. These 0:15:54.680 --> 0:15:58.640 were the Libertarians, and their argument was power doesn't matter, 0:15:58.680 --> 0:16:01.360 Concentrations of power doesn't matter, conflicts of interest don't matter. 0:16:01.520 --> 0:16:05.680 Traditional things like usery caps, all that stuff is very silly. 0:16:05.800 --> 0:16:08.360 The only thing that matters is efficiency. We need to 0:16:08.440 --> 0:16:12.680 just think about what is most efficient. And to understand efficiency, 0:16:12.760 --> 0:16:16.360 let's think. Let's ask economists. They are the scientists, right, 0:16:16.360 --> 0:16:18.840 We're going to move this political question out of the 0:16:18.880 --> 0:16:22.040 realm of the public and the citizen and move it 0:16:22.080 --> 0:16:25.040 to the expert, the scientists, the economist. That's why these 0:16:25.080 --> 0:16:28.400 political things become the economy. That's why we start using 0:16:28.480 --> 0:16:33.160 terms like human capital instead of people, or infrastructure instead 0:16:33.160 --> 0:16:36.280 of bridges. Like it's just a very you know, the 0:16:36.400 --> 0:16:40.840 language got gets weird and sort of flat distant, yeah, 0:16:41.320 --> 0:16:43.840 exactly distant alien right. I noticed this in the in 0:16:43.880 --> 0:16:45.280 some of the documents that I was looking at the 0:16:45.320 --> 0:16:47.800 government doctor in the seventy eight seventy nine, that like, 0:16:47.800 --> 0:16:52.960 the language started getting weird and very technocratic, wonky. So 0:16:53.040 --> 0:16:55.000 that was on the right. On the left, it was 0:16:55.040 --> 0:16:58.840 sort of like some quasi socialists who made a similar argument. 0:16:59.120 --> 0:17:02.760 And they they you know, they they were not they 0:17:02.800 --> 0:17:05.199 didn't like small business right because they thought that like 0:17:05.240 --> 0:17:09.959 small business people were like uh racist and and Rubby 0:17:10.119 --> 0:17:13.359 and Andy. They preferred working with you know, the big 0:17:13.440 --> 0:17:16.240 the big banks and the and the big chain stores. 0:17:16.280 --> 0:17:18.680 And they thought, oh, they're cosmopolitans regardless. 0:17:19.240 --> 0:17:22.400 Who knows how big corporations feel about race. Jesus. 0:17:23.200 --> 0:17:24.560 I mean, I'm not I'm just telling. 0:17:24.400 --> 0:17:26.400 You no, no, no, no, I'm not saying you're the one. He's 0:17:26.440 --> 0:17:27.440 just like, oh god. 0:17:27.960 --> 0:17:31.040 Right, I mean so so. So they didn't like car dealers, right, 0:17:31.040 --> 0:17:32.919 That was they were like, car dealers are sleazy, we 0:17:32.920 --> 0:17:35.080 don't like them. They were kind of more socialists, and 0:17:35.080 --> 0:17:36.720 they said, you know what we should we should have 0:17:37.280 --> 0:17:40.679 big planning, right, work with IBM, work with like the 0:17:40.720 --> 0:17:45.480 big fancy companies to sort of plan things, and and 0:17:45.480 --> 0:17:47.800 and that. They were like, we need experts to kind 0:17:47.800 --> 0:17:50.679 of be planners in the economy. And that's actually not 0:17:51.119 --> 0:17:54.439 very different than saying, let's just allow the economists to 0:17:54.520 --> 0:17:58.320 run things, right, It's actually very similar. Both the right 0:17:58.359 --> 0:18:00.199 and the left they kind of hated each other, but 0:18:00.240 --> 0:18:04.320 they agreed that populism was bad, that small business was 0:18:04.320 --> 0:18:06.760 sort of foolish and silly, and that what we really 0:18:06.760 --> 0:18:10.600 should do is is have big institutions running things. And 0:18:11.000 --> 0:18:14.000 those big institutions, you know, maybe the right thought, well, 0:18:14.000 --> 0:18:16.320 they should just generate cash because that's more efficient, and 0:18:16.359 --> 0:18:19.720 the left maybe thought, let's have them be more socialist 0:18:19.840 --> 0:18:21.960 and look out for the public interest. But that was 0:18:22.000 --> 0:18:25.600 the sort of the gist of what both and they won. 0:18:26.119 --> 0:18:29.720 And then they changed antitrust laws in the nineteen seventies 0:18:29.760 --> 0:18:33.399 and a whole bunch of regulatory laws in the nineteen eighties, like, 0:18:33.480 --> 0:18:37.840 for example, deregulation of airlines, which happened in nineteen eighty. 0:18:37.920 --> 0:18:44.359 The most aggressive proponent of deregulation of airlines was Ralph Nader. Okay, 0:18:44.960 --> 0:18:47.959 wasn't a right wing thing. The airlines themselves didn't want it. 0:18:47.960 --> 0:18:50.800 It was Ralph Nader pushing it very aggressively. He was 0:18:50.840 --> 0:18:55.000 also very aggressive about pushing for deregulation in banking. You know, 0:18:55.160 --> 0:18:56.840 I mean, it's a weird history here. 0:19:07.680 --> 0:19:10.960 It's weird. How will like the two very different sides 0:19:11.040 --> 0:19:13.960 both seem to kind of turn against workers almost. 0:19:14.760 --> 0:19:17.359 Yeah, So Nata realized he made a mistake. But what 0:19:17.480 --> 0:19:22.040 the basic idea there was, Oh, this is it's bad 0:19:22.080 --> 0:19:24.679 for consumers that we have this regulatory scheme of for 0:19:24.760 --> 0:19:28.800 banks or for or for or for truckers or for airlines. 0:19:28.920 --> 0:19:32.479 It increases prices, it's not as efficient as it could be. 0:19:32.680 --> 0:19:36.800 If we consolidate power, that's more efficient. Right, all these 0:19:36.840 --> 0:19:37.480 grubby you. 0:19:37.480 --> 0:19:39.359 Know, because scale, you'll be able to do. 0:19:39.920 --> 0:19:43.639 Right. And so the Chicago schoolers or the right wingers 0:19:43.680 --> 0:19:46.240 were like, absolutely, this is completely right. I mean they're 0:19:46.320 --> 0:19:49.119 hippies and communists and we hate them, but they're not 0:19:49.160 --> 0:19:52.080 wrong about the need to bring the experts in to 0:19:52.200 --> 0:19:55.159 run things and move away from these you know, grubby, 0:19:55.240 --> 0:19:58.600 dumb small business people. And you know, the there's a 0:19:58.640 --> 0:20:00.560 lot of it is the consumer rights move movement was 0:20:01.520 --> 0:20:04.840 part was the people on the left who got this 0:20:04.920 --> 0:20:07.080 to happen. And you know, even if today if you 0:20:07.160 --> 0:20:11.119 read like the biographies autobiographies of people who worked in 0:20:11.160 --> 0:20:14.800 the Carter administration, though like invective, the anger they have 0:20:14.920 --> 0:20:18.520 towards the teamsters is really weird. Like I've read like 0:20:18.680 --> 0:20:22.840 multiple people from was his name, Alfred Kahn was kind 0:20:22.840 --> 0:20:24.840 of the big one. He was like diregular, but he 0:20:24.920 --> 0:20:26.840 used to talk about like how the goal of a 0:20:26.880 --> 0:20:30.000 lot of the policies was to just destroy the teamsters 0:20:30.000 --> 0:20:32.360 and reduce wages like for workers, and. 0:20:32.320 --> 0:20:35.600 Did they did. Why was there such bipartisan descent for 0:20:35.640 --> 0:20:38.399 small business? It just doesn't Maybe it makes sense just 0:20:38.520 --> 0:20:41.119 looking back, like Hinslight's twenty twenty, but it just feels 0:20:41.119 --> 0:20:45.200 so illogical almost on the left. 0:20:46.000 --> 0:20:48.720 There's an elitism to it. Right, So you had this 0:20:48.760 --> 0:20:51.720 is the first generation like in this it's the sixties 0:20:51.760 --> 0:20:55.240 and seventies, and now you have finally like tens of 0:20:55.240 --> 0:20:57.800 millions of people who are college educated. Right, it's right 0:20:57.840 --> 0:21:01.160 after the GI Bill and this the World War two, 0:21:01.640 --> 0:21:05.439 and they're they're trying to understand the economy and the 0:21:05.480 --> 0:21:07.840 New Deal. The New Deal exists, right, the New Deal 0:21:07.880 --> 0:21:11.960 framework is there. Things aren't basically prosperous, and they stop 0:21:12.119 --> 0:21:16.280 caring about questions of political economy and concentrations of power 0:21:16.359 --> 0:21:18.840 and inequality because there just isn't that much of it. 0:21:19.000 --> 0:21:22.159 I mean, yeah, there's like there's some like rich people. 0:21:22.200 --> 0:21:23.920 There are rich people, but they're seen as kind of 0:21:23.960 --> 0:21:27.240 like borish and tacky. They're not like considered powerful. Wall 0:21:27.240 --> 0:21:31.080 Street doesn't really matter, you know, in the seventies, it's 0:21:31.160 --> 0:21:34.440 just like a place with coupon clippings of like bonds. 0:21:34.480 --> 0:21:37.240 It doesn't it's not you know, it's not a big deal. 0:21:37.840 --> 0:21:42.000 And that's kind of the vibe that that most people have. 0:21:42.560 --> 0:21:44.480 You know, it's in nineteen seventy nine, you could like 0:21:44.760 --> 0:21:47.719 you could leave high school and you could just get it, 0:21:47.800 --> 0:21:50.520 get a job making fifty bucks an hour in a factory. 0:21:51.200 --> 0:21:54.399 Right that it was just a very different society. So 0:21:54.440 --> 0:21:58.200 there just wasn't the concern over being able to make it. 0:21:58.320 --> 0:22:00.560 In and not fifty dollars an hour. Job was not 0:22:00.720 --> 0:22:03.000 I'm going to guess from mega corporation. 0:22:03.720 --> 0:22:05.480 Or it was I mean, but it could be. It 0:22:05.520 --> 0:22:07.800 could be but like it could be for Ford, or 0:22:07.800 --> 0:22:10.360 it could be for a supplier of Ford or whatever. 0:22:10.440 --> 0:22:13.400 But like it wasn't you know, there was a lot 0:22:13.400 --> 0:22:17.000