Factually! with Adam Conover - Our Anti-Monopoly Moment with Zachary Carter

Episode Date: September 1, 2021

We've suddenly gone from a world with little antitrust enforcement to one in which strong anti-monopoly action has broad bipartisan support. How did this happen? Today senior reporter at Huffington Post Zachary Carter is on the show to help answer this question. You can check out his book at factuallypod.com/books. Learn more about your ad choices. Visit megaphone.fm/adchoices See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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We are back with you today with another brand new episode in which I talk to an amazing expert about all the incredible things they know that I probably don't know and that you probably don't know so that all of our minds can get blown together. We're going to have a great time. Now, on this show before, we have talked about monopoly capitalism and antitrust in America, or more precisely, the lack of any antitrust enforcement of any kind in recent decades. It's a problem. It's a problem that we have let companies get larger and larger, buy each other, merge, consolidate into monopolies to the point where a couple of corporate megaliths, we're talking Amazon, Disney, and Alphabet, that's Google and YouTube's parent company, have massive undue influence over American life. If you're a consumer or a worker, you have felt the impact of this, whether you know it or not. And, you know, again, we've talked about it on the show. We talked to Matt Stoller, a wonderful expert on this topic.

And even after those conversations, I was starting to feel like this was an impossible problem in American politics. The fact that there are lots of other reasons that monopolies can be bad. They can control our political system. They can lower wages for workers, lots of other problems. But unless the price of your Big Macs got higher, the government wasn't doing anything about it. And a lot of that is because both parties have seemed hopelessly enthralled to big business for years. And that's kept the Department of Justice rubber stamping mergers and the Federal Trade Commission from doing much in the way of anything in terms of regulating trade, which is its job. And as a result, I had assumed for a while that chances

for change on this very important issue were nearly non-existent until very recently. Very recently. This entire conversation has completely transformed in America. There are tender shoots springing from the once barren field of antitrust in America. For instance, there's a woman named Lina Khan. If you follow antitrust, you've probably heard of her. She's a young scholar. She wrote the seminal paper describing how antitrust enforcement needs to change to deal with Amazon. It was a sensation in the rarefied world of economics papers. Okay. It's too rarefied even for me. I've not read this paper. I just know that it was a big fucking deal. All right. Well, this young progressive woman with very, some would say, radical ideas on this topic,

she was just confirmed as Joe Biden's chair of the Federal Trade Commission. And not only that, she was confirmed with bipartisan support. Even arch conservative Ted Cruz welcomed her into one of the most powerful regulatory roles in government and said he was looking forward to working with her. Isn't that interesting? Why did that happen? The Supreme Court has gotten into the renewed antitrust mix too. They recently ruled that the NCAA was in violation of antitrust law and that it can't stop student athletes from getting education-related payments. Now, this opens the door for the first time to

student athletes receiving some benefits from the multi-billion dollar monopoly organization their labor is benefiting. And even more incredibly, conservative justice Brett Kavanaugh wrote a concurring opinion saying nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate and added that the NCAA is not above the law. I mean, when you've got Elena Kagan and Brett Kavanaugh agreeing on an issue, it starts to seem like a pretty broad consensus is forming to some degree. And beyond that, we started to see a broad cultural change in our political system. For the first time, politicians on both sides are discussing

how we might actually go about breaking up big tech companies. Even in my industry, Amazon's recent attempt to buy MGM, a major player in the movie industry. Well, turns out the government is suddenly taking a closer look at that and maybe it'll be overturned. Very rapidly, we've moved from a world in which no antitrust progress is possible to one in which there's a sudden thaw in which it seems anything could happen. So what led to this transformation? What brought it about? And where might it go?

Well, to answer, our guest today is Zach Carter. He's a journalist. He's a writer in residence at the Midyard Network. And he's the author of The Price of Peace, Money, Democracy, and the Life of John Maynard Keynes. I can't say enough how much I think you're going to enjoy this interview. I had a blast. Please welcome Zach Carter. Zach Carter, thank you so much for being here. Thanks so much for having me. So you've written extensively about economics, about Keynesian economics specifically. I want to start by talking about antitrust. We've talked about antitrust on the show many times before, about the need for antitrust regulation,'ve talked about antitrust on the show many times before, about the need for antitrust regulation, about the problem when we have massive consolidation in the economy.

So it seemed like a very big problem that maybe wouldn't be fixed anytime soon. But it started to seem like there has been a bit of a sea change in the way our country and maybe the world is handling these issues. Do you feel that way? And if so, why? I think so. I think the Biden administration is taking the critique of the American economy and to some extent, the global economy that a handful of intellectuals in the antitrust movement have been putting forward for the past half a decade or so. And that critique is essentially that most, if not all, of our problems in economic problems stem from large concentrations of corporate power and that corporations, as we understand them, do not really function as businesses or commercial enterprises in the traditional sense, the way that most of us are sort of accustomed to thinking about commerce.

But they're more sort of like private governments. They're so large that they exercise a kind of political control over resources and communities or aspects of communities that is undemocratic. It's a sweeping critique. It's a different conception of antitrust than the one that prevailed for the last half century or so. In that prior mode of thought, the consumer welfare standard was considered the only really legitimate reason for getting involved in, for the government to get involved

in an antitrust dispute. Yeah, there's this idea that it was, I think the courts would use, as long as it's not raising the prices for consumers, then we're not worried about it. But if a monopoly is causing prices to go up, that's bad. But otherwise, everything else is fine. But there's other bad things that happen as a result of monopolies. Yes. And this older way of thinking about antitrust, I think, stems from a sort of laissez-faire kind of market-centric understanding

of reality that markets tell us critical information about the world and that if we organize the world according to the sort of pricing information that we receive from markets, then we'll end up with a good world. And there's a lot of reasons, I think, over the past decade or so for people to question that sort of more foundational belief. And so I think the change in sentiment about what antitrust policy is supposed to do is part of a broader reexamination of what markets do, why we have them, how they come to be, and how they're governed. And markets are governed. They don't necessarily govern themselves.

They're created by political power, and they're governed by political power. political uh power and uh and they can be and they're governed by political power um so yeah i think the now it depends on who you talk to in the antitrust movement there are different conceptions about how you know how how uh this new framework ought to be implemented but in general i think the biden administration um has has taken has has accepted this critique and is is is has has taken has has accepted this critique and is is is proceeding as if large concentrations of corporate power are a serious threat to shared prosperity. Well, so let's talk about some of the other like bad consequences of large concentrations of corporate power in addition to prices going up. That's the one that I think I learned about in high school. You know, monopolies are bad because then there's no competition and therefore prices will go up willy nilly. I think I learned about in high school. You know, monopolies are bad because then there's no competition

and therefore prices will go up willy-nilly. I think most Americans probably have that sense of, you know, oh, it's a monopoly, that's bad. But what are some of the other bad consequences? Like, for instance, you wrote about the concept of a monopsony in an issue of your newsletter that I read. What is a monopsony? So monopsony is another fancy word for, I think a common sense understanding of monopsony

is a monopoly that affects workers. The reason monopsony became important in the 1930s when it was developed by an economist named Joan Robinson, it was co-discovered by another economist named Edward Chamberlain. We traditionally think of monopoly as standard oil, as a single producer that corners so much of the market that they're able to dictate terms for the rest of the market. Monopsony is not about producers. It's about buyers. But monopsony is not about producers. It's about buyers. If you have a buyer for that good, then that buyer, if it's big enough, if it controls a big enough part of the market, it can dictate terms for the suppliers, for the sellers.

And so you have all the problems that we associate with monopoly, but in a slightly different form. And it's an important distinction because it can be applied to the labor market. And if you think about a worker as somebody who is selling their labor, and you think about a corporation as a buyer of labor, then you can easily see how if you have a power mismatch between the buyer and seller there, then the seller could end up getting a raw deal. Look, I've seen an example of this in my own business in television writing. You know, as a TV writer, I'm trying to sell, I literally, I call it, I'm trying to sell a new show. I have a new show that I'm trying to pitch and I want someone to buy it. And I'm out there pitching different, you know, TV networks, hoping one of them is going to buy it from me. Literally in the middle of me trying to sell my last show, two of the buyers bought each other.

They merged HBO Max, HBO Max and Discovery Plus said they're merging. Right. And so previously, you know, when I went to pitch this, I pitched five different places. I'm like, shit, next year I'm going to pitch four. Then there's going to be less competition between them. And as a result, whichever one is, you know, left standing is not going to have to offer me as much money. And there's, and it's, we see, I can see it currently in my industry. For instance, Disney, Netflix, this is how, this is how they work. And, you know, for folks in, for instance, in my, in the Writers Guild, the union that I'm a member of, people are concerned about this. People are like, hold on a second, less buyers means they're going to be able to drive our wages down. And so that's it's I guess it's just a different way of looking at a monopoly.

Like normally when we say monopoly, we think of, oh, we're consumers, we're buying from the monopoly. But when we're selling our labor to a monopsony, I guess it can be both things at once. It can be a monopoly and a monopsony simultaneously. It's a different way of looking at who's who's harmed. And it's the worker who's harmed in this case, not the consumer. Right. And this doesn't exclusively apply to the labor market, although I do think that is where it is most powerful as a as a concept in economics. You can think about, you know, just a large retailer like Amazon being able to set terms for the sellers who work through Amazon. And that's, you know, most of the problems that we see in today's economy that the antitrust reform movement has identified are not new problems.

They're not things that we've never seen before, but they are very intense in this particular moment. I think one of the reasons they're so intense and so acute at this stage of history is because we just ignored antitrust policy largely for the previous half century. But I do think there's a couple of important distinctions here about how you think about monopsony in the context specifically of the NCAA's student-athlete compensation setup, or lack thereof. You don't get paid if you're a student-athlete, even though your sports program makes a lot of money for your school. And that is- And a lot of money for TV networks, and a lot of money for advertisers, and a lot of money for the people who make the jersey with your name on the back, and a lot of money for basically everybody but you. And people who make the jersey with your name on the back and a lot of money for basically everybody but you. And people who write about it, even. I mean, and so I feel a certain sense of obligation here.

I'm not a sports writer, but I've written about this particular case and I actually got, you know, I can I have a sub stack. I can I can quantify how much I got paid. You know, you got paid for writing about the NCAA's antitrust issues, even though the athletes in the NCAA, again, didn't get paid or they got paid in scholarship, which, let's be honest, if you go to a state school that's worth low five figures a year, that's not even a yearly salary. No, no. And look, let's be fair.

There are some universities whose sports programs don't make a lot of money. There are some programs at universities that don't make money at all, even if their other programs do. There are details here that are important. But in general, we're talking about athletes in programs that make a lot of money for the schools. That's why the programs exist. That's why they're so high profile. It's a major part of the funding base for higher education in the United States. And, you know, Brett Kavanaugh is a Supreme Court justice with whom I disagree on many, many issues. But his writing on monopsony is written with a certain sort of moral clarity and passion.

But it is distinct from the way other people who have thought about monopsony have presented it. When you read Kavanaugh's opinion in the – it's a concurring opinion in the NCAA case. He makes it sound like monopsony is this very rare thing, that it's a terrible thing. It's sort of a corruption of the market as it's supposed to exist. There's a pure ideal of American commerce. This is a departure from that, what the NCAA is doing. And that is a violation of the rules about how the world should be. When you look at the way earlier theorists of monopsony talked about it, and most importantly here, I think Joan Robinson is a very, very distinguished economist from the 20th century who worked very closely with John Maynard Keynes on the development of the general theory of employment, interest and money, which we can talk about later.

But but Robinson didn't think that monopsony was this sort of rare thing. She thought it was endemic to, at that time, a 20th century economy. And the question then is what you do about it. We're not just talking about a few outliers, a crazy thing that happens when Amazon takes over too much of some particular sector, or the NCAA refuses to pay student athletes. She was saying this is something that is in every labor market, really. And so the way that you want to respond to monopsony, if you think about it that way, I mean, she sees it as sort of a problem of degree. You know, it can be more severe or less severe, but it's everywhere in some way pretty much all the time.

And there are thinkers who follow Robinson here who say, you know, the key here is not just to crack down on individual violators when things get totally out of control. You need to have some sort of regulator looking after this problem and paying attention to it all the time. An antitrust regulator who is worried

about monopsony in the labor market. Now, you don't necessarily have to call that an antitrust regime. If you're regulating wages and you have somebody in the market saying, look, corporations, businesses are constantly underpaying their workers. We need to figure out how much and make adjustments. You know, the Department of Labor could just do that as part of its ordinary course of business. And we wouldn't think of it as an antitrust issue. Or we could have unions, stronger unions that are able to advocate for themselves. And so maybe we don't need, you know, we just need regulation to make sure that that is a fair negotiation

that's happening there, that kind of thing. Right. But some sort of, there's an imbalance of power and you need some sort of institution with power to correct that imbalance of power. It's not just a problem of prices getting awry. There is a clear power imbalance in the economy. And it's not going to do the things that we want if we don't correct that with some sort of the economist John Kenneth Galbraith, who is very deeply influenced by Robinson. He called this countervailing power. That's the essential thing that needs to be done to deal with this. Whether it's the state or the labor union or something else, Galbraith was fairly agnostic

in his theoretical writings. But you can see different schools of thought emerge very quickly once you start acknowledging these sort of realities that I think most of us intuitively grasp this idea once it's presented to us. It has a certain explanatory power that feels in some way almost obvious once you've heard it. Yeah. I mean, you are starting to reorient the way I think about this because I was prepared to go down a whole list of like, all right, what are the other problems of consolidation and monopoly in the economy? What do they cause?

But what you're describing is the real problem is not strictly money related. It's power. The issue is power imbalances that will crop up, you know, whether, hey, sure, Amazon is a giant one that Amazon can dictate terms for all of these other companies as these as this huge seller. how, I don't know, a local fucking paper supplier like in the office is, you know, dictating terms for people there, et cetera. Or you can like, you know, having power imbalances is a problem because it means that one person is going to be dictating terms for another part of the market. And that's and that is the ultimate problem here that we want to keep an eye on. Am I getting it right? I think so. And you can see very quickly how these ideas about economics and economic theory very quickly turn into political considerations and disputes over political theory and the proper role of government

and what we mean when we talk about democracy. And these questions, when people pursue these kind of breakthroughs in economics are not easily sorted out quickly. I mean, I think the adoption of the consumer welfare standard, this idea that only an increase in prices for consumers at the end of this enormous production chain, only those higher prices are what matters. This is a result of a conception of you get to this place if you think of the market as a place where democracy happens, that as consumers we make choices. We are in some way equals as buyers of products, and the market responds to our preferences and what we want. And so as purchasers, we can provide information to the market that will cause the world to be ordered in some way that we like. If you see the political mechanism as the home of democracy or the state, you're going to come

to a different set of conclusions. And if you see the labor union or workplace democracy as the true home for democracy, you could come to a different set of conclusions. And people who thought about this came to different conclusions over the course of their lives. I mentioned Joan Robinson earlier as one of the most important early theorists of this. She's a brilliant antitrust, anti-monopoly thinker. Then she goes on to being a brilliant, one of the founders of Keynesian economics. And then she keeps going further. And, you know, by the 1960s and 1970s, she's something of an apologist for Mao. So these, you know, the people who were involved in this changed their minds. Not all of their political views are views that I think we would find attractive from a perspective of 21st

century, you know, democratic thought. But you have to grapple with these ideas when you are talking about reforming the system, which, you know, I think smart economics, smart economists since the financial crisis of 2008 have been trying to wrap their heads around what went wrong at that point in time and why that event happened. And I think pretty much everybody can say, everybody at least that I listen to, will say that something went wrong in 2008, right? Something very bad happened

that should make you stop and take stock. But it isn't immediately obvious to every smart person what exactly that thing is. And I think those – I think Biden is testing a couple of things right now. a return to a conception of Keynesian sort of market and state relations that was very common around the world in the decades immediately following World War II, but which has become very unpopular in the decades since. Okay, I want to find out more about what you mean by that in a second. But first, I just want to talk about the the concrete changes that we've seen in the Biden administration's approach and in these Supreme Court cases. Like, let's just because we've already talked about it. Let's talk about this NCAA Supreme Court case. You wrote about this, that this this case means that antitrust reform is now the norm. And just tell me, just

tell me a little bit more about that case and why you feel that such a bellwether. little bit more about that case and why you feel that's such a bellwether. I think it's a big deal when you have this consensus across the progressive wing of the Democratic Party and the social conservative wing of the Republican Party, that this is an explanation that they find attractive. I think Brett Kavanaugh's understanding of monopsony is, for instance, different from mine. But I think the fact that he's talking about it means that there's something that the progressive antitrust reformers and Brett Kavanaugh agree on. They have a way of communicating about this stuff. They're going to have different political goals and different, I think, visions of a just society ultimately. But this idea that this problem is sort of in a conceptual space that we

kind of share, to me suggests that using the antitrust frame can be a particularly effective way for the Biden administration to go about making changes to the existing economic order without rocking the political boat as much as it would need to, if it were adopting a different frame for what went wrong in 2008. And you can see it with the NCAA. It's so flagrant. I mean, they don't even pay the athletes, right? Clearly, there is a problem. But if you get, you know, I'm not so sure that Brett Kavanaugh would be in the majority on a decision, you know, requiring, you know, a $15 minimum wage or something across the economy on the grounds that fast food workers, you know, face overwhelming monopsony

problem. But the fact that he's already committed to it intellectually makes it harder for him to oppose that sort of thing when it comes up. And I think the public consensus on this stuff often matters as much as the sort of day-to-day positioning of different ideological movements, we forget that the legal profession in particular takes a lot of its cues on what is reasonable from the expert consensus in the economics profession. That's why so many lawyers have upheld this consumer welfare standard for so long is because the economics profession, at least the side of the profession that faces Washington, D.C., has said this is true for a long time. Now that there is a lot of skepticism about that in the economics profession, and importantly, among political actors in Washington, D.C., who the economics profession discusses things with, I think the

legal profession and the courts will sort of follow suit. It'll take some time. But as those ideas change, I think you'll also see some of that elite sort of thought consensus trickling down to the rest of society. Because you'll just hear leaders and famous people talking about things in such a way that monopsony is understood to be a central problem. But it, I mean, if you had asked me, I would have guessed that it would have taken a little bit longer for Kavanaugh to get on board, right? Being an arch conservative in many ways. And I would assume a fan of college sports and

a lot of fans of college sports are not interested in the argument that the athlete should be paid. Right. I've had so many arguments with my dad about this. No, no, they get a scholarship. Come on. The scholarship is worth so little. And like, look at how much money is being made. Everyone is getting paid. I watch, I'm on TV. I get paid. I'm looking at these guys. They're on TV. They're not getting paid. pay. I watch, I'm, I'm on TV. I get paid. I'm looking at these guys. They're on TV. They're not getting paid. Like it's, it's flagrant, but you know, again, people who are fans of these things tend to tend to not be that open to it. And sort of, so for it's an unlikely coalition appears to be forming is the, is the surprising part about it in a place that I wouldn't have

really expected. What, what, what do you think? I mean, what do you think caused that in, you know, conservative circles? It's hard. I mean, look, I put my cards on the table here. I'm not a lifelong member of the conservative movement. I, I, my politics are generally more progressive. So I don't speak with the authority of an insider here, but, you know, I think 2008, you don't have to be a left winger to think that something went terribly wrong. And there were, I was covering, I was a financial journalist at the time, and you did see people who were sort of in denial for a little bit. That, ah, this must be all the fault of Fannie Mae or Freddie Mac. There's some sort of government regulator that's out of control. It was the Fed's fault, whatever. And you can certainly fault pretty much every institution that's involved with the mortgage

market at this period of time is doing something wrong. But it becomes pretty clear that you have a lot of really big banks, right, that issued the mortgages either themselves or through, you know, through mortgage brokers that they hired. They dominate this market not only for mortgages, but for mortgage-backed securities and for credit default swaps and all these financial derivatives that were tied to these mortgages that went bad. And then you see the government rescuing them. It seems very clear that there is a market that is highly concentrated that has failed in a particular way. And the question then is, what do you do about that?

Do you break up the banks? Do you regulate them in a different way? I think it becomes very difficult, particularly after the crisis, as banks just continue to break the law over and over again about things that in some cases were not catastrophic for the broader economy. I'm thinking here about Wells Fargo and their checking account scandal. This is a huge scandal a few years ago where they just invented fake accounts, like millions of fake accounts. Actually, even calling it a fake account, that's sort of the tagline. They were real accounts.

You just didn't sign up on them. They were illegal real accounts that were invented for no reason, right? Just a very funny personal aside. I remember like a year after that, I received like an audition request from my agent asking like, do you want to would you want to read to be this corporate spokesperson they sent me the script for the audition and it was a wells fargo uh ad that was like at wells fargo we're sorry for what we did and we and we pledged that we're going to be better but in much more corporate language than that but i was like that is so fun There's no fucking way I can read this. I was like, no, I'm not. I'm not going to do this. But it was very I was like, that's the funniest to be the voice of the corporate apology for one of the most massive corporate frauds in recent history. That and Volkswagen, the biggest corporate frauds I can think of from the last

decade. And, you know, not they didn't destroy the economy the way the mortgage crash did. But you see this and you're like, how does this happen? Well, it happens when you have a giant institution that can do it. And so I think, you know, from the, I think the anti-monopoly movement got a lot of, it built a lot of steam from seeing these big institutions behaving in ways that seemed unaccountable.

And, yeah, Wells Fargo just kept happening. It wasn't just the fake account scandal. I mean, they also had a problem where they acknowledged in SEC filings that they had accidentally repossessed thousands of cars. I mean, if you go down the street and you steal somebody's car, you are a car thief. If you accidentally repossess thousands of cars due to a computer glitch, then you're Wells Fargo. So I think the anti-monopoly movement got a lot of juice from this. But there are also good faith, smart critiques of the economy that say this really doesn't have anything to do with the size of these institutions. That's not the salient factor here.

It's just that they're behaving badly. This is something that happens in a private economy, in private markets in general. We have to have regulations for a different set of reasons. But I think, ultimately, it's not necessarily a huge deal which particular kind of reform camp you fall into if everybody agrees that these large institutions are out of control and they need to be reined in in some important way. Well, the pieces are starting to fall together for me because I think the point that you've made and the point that we're all sort of waking up to is that monopoly consolidation, these antitrust issues are not just, again, about prices. They're about power and about democracy and about the idea that when these companies get so big, they are little, like you said,

they can just do what they want. Like, you know, Wells Fargo can just, they can just create all those accounts because they're so powerful. They can just do whatever they feel like. can just they can just create all those accounts because they're so powerful. They can just do whatever they feel like. And that is we do have a revulsion against that in American society of other actors dictating terms. You know, we have a very individualistic society. And then also, you know, we have a strong tradition of democracy and it's anti-democratic to have these gigantic organizations that can just do whatever they want by fiat.

And one of the things I've noticed is conservatives have gotten very mad about that as well. Like specifically, I've gotten so mad at Facebook and Twitter, right, for all this stuff about censoring conservative voices. Now we can have an argument about whether or not they actually were censoring conservative voices, but we'll save that for a different episode. The point is that a whole lot of conservatives feel like that. And that's an example of them waking up to, oh, hold on a second. Giant corporations can dictate terms to me in ways I maybe don't like and I don't get a say in with Lena Kahn, who's Biden's new extremely antitrust FTC commissioner, right? Yes. They're waking up to the same thing that we all are just for different reasons and with different goals.

Does that sound right? I think it's well, you know, like all explanations, it's a simplification. You know, the map is never the territory. I know, of course I'm simplifying things. I'm not – you're the expert. My job is to simplify it and make it stupid. My job is to say, ah, it's a little more complicated, right? It is slightly more complicated.

But, I mean, I think ultimately that whether you agree with the conservatives railing against the tech companies or you agree with the tech companies or you don't agree with either one. It is the case that these are large, powerful corporations that are not, generally, whose power is not checked on important issues by any kind of democratic mechanism. And if you believe that markets are self-correcting, then you believe that this problem will just take care of itself eventually without any kind of public act. And I think it's significant that within the conservative movement, people don't believe that anymore. And I think this is a really, really interesting kind of, frankly, I think it's been a long-standing tension in conservative thought. If you break down the different sort of ideas about the free market that people like, the same person, someone like Milton Friedman put forward over the course of the 20th century.

Milton Friedman argued that in perfectly good faith, he was totally sincere about this. He argued that a free market would get rid of racism. It could maybe even end war because people would make choices and doing racist things would be bad for business. But then he also said, and so this racist stuff would just be forced out of public life. But he also said by 1970 that corporations that tried to do anything other than make as much money as possible were engaged in some sort of illegitimate socialist project. That it was really, really terrifying for corporations to adopt different sort of social welfare, social justice kind of programs instead of just trying to make money. There's a tension there.

Either the market will drive out the bad stuff when these companies adopt their social welfare programs, or these social welfare corporations are somehow bad and socialist and dangerous. That tension's always been there, and you can sort of see it breaking out in the conservative movement now where there are a lot of social conservatives who are angry about the, I think the term that's being thrown around a lot now is like woke capital. But there are also more traditional business conservatives who say, hey, isn't that what we want? Do we want, do we really want the government to come in here and start telling businesses what to do? It's a really important philosophical, it's a difficult nut to crack and i don't think it's obvious where the conservative movement goes from here um because you can you can easily imagine this resolving a lot of tensions between the left and the right on these philosophical issues i think it's a lot harder to imagine the sort of social distinctions between left and right that we think

of and we think of a conservative or a liberal dissolving just because this idea went away. But either way, you can tell that ideas are changing now. This is a moment in time when a lot of thoughts are up for grabs in these different camps that weren't 10 years ago. And that's the really interesting thing about this, because it's this disagreement that liberals and conservatives have had about economic policy that there seems to be the beginning of a realignment on, like a fundamental realignment. And it's a little bit less visible to us because it's not part of the culture war. It's not part of what gets talked about on cable news. It's not part of what people get angry about. It's these

deeper underlying assumptions that have been with us for close to a century that are starting to get shuffled around in ways that are interesting and a little surprising and unpredictable. It's a little hard to see where things are going to go when Ted Cruz is voting for Biden's progressive antitrust appointee because they have something they agree on, that's like, oh, we're starting to shuffle the cards here in a way that I didn't anticipate and I don't quite know where it's going to go. I think that's right. And it's not just on the right where this is happening. And I think you can even see this within the Biden administration to some extent.

You know, I think we talk about, so the other area where the Biden administration, I think, has been really, I think, very different from its Democratic Party predecessors is on its very early and open push for a more aggressive Keynesian economic program. And when I say Keynesian, you know, I think most people think of Keynesian economic program. And when I say Keynesian, I think most people think of Keynesian economics in terms of deficit spending, that it's okay to take on big deficits when the economy gets bad. Wait, wait, wait, wait, wait.

We got to take a break because this is going to be a whole new chapter of this interview. I want to dive into this. I don't want you to say more because I'm going to ask you more about it. We'll be right back with more Zach Carter. OK, we're back with Zach Carter.

You were before the break. You were in the middle of what was going to be a wonderful explanation of the Biden administration, their new Keynesian program. So tell me what you mean by Keynes and just remind us of who Keynes was. Keynes, Keynes. I always say it wrong. I always say Keynes. I'm not pushy about it. People have, you know, he's dead. He doesn't care. But he was an economist in the 20th century, most important economist of the 20th century, probably possibly when he died. The Times said that he was the most important economist since Adam Smith.

And I think in some extents, he's more influential than Adam Smith in that in that he legitimized an entirely new kind of way of thinking about government. And the sort of history of the United States as a global superpower is intimately connected to this conception of economic power. And I think when they teach Keynes in Econ 101 courses, or at least when I was taught Keynes in an Econ 101 course back in the very early 21st century, he was the deficit spending guy. He's the guy who says, you know, sometimes there's something bad that happens, the economy goes into a slump, and to get out of the slump, the government needs to spend some money and sort of prime the pump, get things back on track, and then the government can get out of the way and the market can do its magic.

And that is one conception of Keynesian economics. But I think when you dig into the theory and the politics that were happening when Keynes was developing this theory, it's very clear that deficit reduction or deficit, not deficit reduction, the opposite of that. Adopting very large budget deficits as a sort of strategic policy tool is just one sort of, you know, tool that can be used in service of this sort of broader set of ideas, which is that markets don't govern themselves. They're not forces of nature out there that lead naturally to prosperity. They have to be created and they have to be managed.

And Keynesian thought this is they're created and managed by the state. And the reasons for this are many, but the basic problem that Keynes says with the conventional economic view of humanity is that we can't make easy, rational decisions about economic value over time, because we don't know what's going to happen in the future. We are governed by uncertainty. And so it's totally possible for something that we don't see coming to rearrange our judgments about the present. I think the coronavirus pandemic is a great example of an uncertain event changing everybody's outlook. And then you've got to do something about that.

You can't just say in the long run, this will work out. The market can't handle coronavirus all by itself. Just like self-correct and oh, we figured it out. You need some amount of someone saying, OK, wait, we need to do X, Y, Z and implementing it. Exactly. And I think sort of like the monopsony discussion we had earlier, you can think of Keynesian stuff as, ah, it only matters when coronavirus happens. Or you can think markets don't just deliver full employment and prosperity on their own. They need to be managed. And the tools that you need to provide, the aid that the government needs to supply will vary at different times for different reasons.

But it's not like this is an on-off switch where sometimes you need stimulus and sometimes you don't. There's not so much a stimulus and step back approach, but a general course of macroeconomic management. Well, the market is, look, I don't know. I think of it as being a little bit like a sporting event, like a game. It's like you have the players, you have them competing, right? But then you also have the rules and conditions of the game, which are set by an outside party to get a result that we all want. You know, like,

you know, Major League Baseball looks at how baseball is being played and they say, oh, you know, no one can man, no, no one can hit anything because, you know, all these all these baseball. I was going to use this is a bad example. I'm going to use an example from like baseball in like the 1920s when it was the dead ball era and no one could, you know, hit any of the balls because the balls were all dirty and they used the ball the whole game. And so they said, you know what, we'll start replacing the baseballs. We'll change the height of the mound. We'll adjust things a little bit so that it's a more equal competition between the hitters and pitchers. And the games are more fun to watch, right? Like NBA has the shot clock, right? In order to make the game play a little bit faster. And now we're all enjoying it and we can, you know, see, you know, and we know that different, different leagues have different amounts of equity between them, et cetera. I'm taking the metaphor too far, but like there's

the conditions under which the event happens determines like what the results are to a certain extent. That's like something we know in life. Of course, it's also true in markets. The rules are supposed to lead to a certain kind of social outcome. Yeah. Right? In this case, that the game is fun to watch, right? But in the labor market, you know, you want it to lead to full employment. You want it to lead to new businesses coming up with new ideas because they have this market full of employed people to buy things. You want to see certain things happen. You want to see certain things happen. And what is profitable under certain sets of rules may not necessarily lead to good social outcomes.

I mean, I think climate change is a really glaring example there. Oil companies made a lot of money for a long time. It's not because it wasn't profitable, right? Climate change is happening because doing things that were bad for the environment made a lot of money. And so where you want to, you know, what social goals you have depend on, I mean, those are not scientific issues. Those are value issues. And people in democracy have to sort those things out through some sort of democratic decision-making process. But then you need rules to see if,

if those those ideas about how society should look can actually be, can actually be realized. And I think the Biden administration's embrace, not, not just their embrace of large deficits in, in this, this year, but the rationale that Biden has given for them in a series of speeches suggests to me a pretty serious change in the kind of elite consensus opinion about what markets do and how they work. I mean, he said in multiple addresses now, you know, that the government is, the United States government is not some occupying

force from a foreign land in the United States. I mean, it's a loaded statement. It literally is another foreign land, but here it is not. Yeah. But here it is not. It's us. It's we the people. It is an expression of democracy. And that was not something, that's not the way Bill Clinton would talk about, about government. He would say things like, you know, the era of big government is over, we need to unleash the power of innovation. And, you know, there's all this technological change happening. And we can't stop that. But we can harness it. It is the the assumption was that markets would do the things that we needed. And maybe they were a little rough around the edges, you had to sort of, you know, guide them a little bit here and there when they got a little bit wild. But in general, this was the stuff. And I don't think that's a core assumption for the Biden administration. Markets can work. They cannot work. It depends on what you want to do. And you can see that with these different packages, economic

packages, that the Biden administration has proposed. We're not just talking about roads and bridges and potholes in the infrastructure language. These bills have been separated and there's a lot of horse trading going on, so things are up in the air. But one of the things that people really objected to, that conservatives and his political opponents objected to when he rolled this stuff out was the use of the classification of care work and in-home aid for people with serious medical issues, that this was considered infrastructure under this, you know, one of these Biden proposals. And independently of whether that was popular, it was enormously popular.

It still polls very well. But you could say, oh, that wasn't, that's not infrastructure. And it sounds a little bit silly because we're used to infrastructure being like these, it's like concrete, you know, and mixing trucks and stuff. Yeah, rebar. Yeah. But if you think about infrastructure as the stuff that's necessary for the market to work, for a labor market to work, if you're at home caring for your parents 18 hours a day, it's hard for you to go out and have a job. Same thing for child care. There's a bunch of stuff on child care in this Biden package. this stuff that has obvious social ramifications, but that is also part of the sort of support mechanism for making a market that works, that is responsive to what we want.

In the same way that if you don't have transportation, workers can't get to their jobs and therefore we cannot, the economy will suffer as a result. We know that's infrastructure. If workers do not have a way to care for their children and they have to stay home, have to drop out of the job market for a couple years um because they have no child care or because they're caring for an elderly uh relative uh that's it's the same problem it's like a necessary substrate for them to get to the fucking job site so it's infrastructure from that perspective that makes a lot of sense to me I do think that there is some tension here between the sort of Keynesian conception of market management and some versions of the antitrust version of market management. And the point I want to make here is that for Keynes, you have to have a concentration of power in order to make

Keynesian policy work. And that concentration of power in order to make Keynesian policy work. And that concentration of power is the government. And what makes it different from concentrations of power in the private economy is that the government is assumed to be in some way democratically accountable. If you're going to have what they call counter-cyclical devices in your economic management, you know, spending a lot of money to end a recession, for instance, you want the government to be a concentration of power that spends a lot of money. Someone's got to be the spender. You're not just waiting around for atomized institutions to make these decisions. So there's a coordination thing, which I think involves, is in some ways in tension with some versions of the anti-monopoly diagnosis of the problem.

But with that caveat being said, people with these two intuitions have worked together politically very effectively for much of American history. the type of state that was created by the New Deal as a hybrid of Keynesian demand management and aggressive antitrust enforcement. Those two things together really sort of form the basis for the administrative state that develops out of the Great Depression. And one reason why these two things seem to go together so naturally, I mean, these different factions fought at different times for different reasons, but they had this political alliance that lasted for like 40 years. And one reason that made sense was because these people had been talking about this and seeing these problems as somehow related and these factions working together all the way back into the 19th century.

The original anti-monopoly movement is not just about corporate breakups. It's about worker hours and the eight-hour day. All of these ideas are sort of working together and people are talking to each other about them before you have names like John Maynard Keynes or Joan Robinson to attach them to and to be formalized into these theories. So I think we're seeing under Biden a revival of that kind of New Deal idea of democracy and government that has been out of fashion in both parties for quite some time. I think it's come back into fashion in part because of presidential politics. I mean, I think watching the primaries in 2016 and 2020 for the Democratic Party was, you know, these were very different events than presidential primaries had been over the course of my lifetime. But I think also, you know, there are sort of these deterministic ideas about, well, under capitalism, everything is determined by the forces of production and who owns them. dictated by some mechanistic force beyond our control. And I look at the last 15 years or so and I see events happening in the world,

people changing their minds and responding to them and actually having new ideas on both the left and the right. I don't like all the ideas that are that people are coming up with, but I think clearly people are changing their minds. And it's hard for me to believe that this intellectual stuff, the actual discourse about this doesn't matter in some way. It seems to me that it really does matter and it's affected particularly the leadership of the Democratic Party. Well, it is surprising because, you know, you heard, for instance, in the last campaign,

you know, Bernie Sanders and Elizabeth Warren both talking about issues of antitrust to varying degrees. And, you know, you could be forgiven for thinking, well, unless one of them wins, it's not going to go anywhere. I mean, Biden wasn't saying that stuff on the campaign trail. But then, like, he is elected and he starts nominating all the people that you would think that they would have nominated. He starts, you know, following up on at least some of these policies. And yeah, it's not something that I would have predicted until I saw it happen. And I think you're probably right that the discussion about these things has actually led to changing people's minds. So now that that's happening, I mean, what are the possibilities for the future that you see? I mean, like, you know, for the last couple of years, break up big tech has been a motto for a lot of the people I've had on my platforms. been banging that drum, for example. Could we start to see, you know, it's been decades since the government even talked about breaking up monopolies, last one being Microsoft, and it failed to do it. But, or, okay, sorry, last one I know about, you're shaking your head, like maybe there's, like, I don't know what I'm talking about. No, no, you do know what you're talking about. I mean, the lawsuit against Microsoft failed in a lot of important ways. But in other respects, I do think that lawsuit served as a pretty important check on Microsoft.

I'm not sure we would have seen, say, the rise of Google without that lawsuit, even though it didn't ultimately, you know, I don't think the lawyers who filed that suit think that they achieved all of their goals. But I do think in a lot of ways, the birth of the internet around the turn of the 21st century, the turn of the millennium, I guess, in some respects are a result of that case being brought. It changed the way Microsoft operated in the market, even if they didn't have to pay

a huge fine. It was the government checking them and saying, hey, hold your fucking horses because, hey, here we are and we're paying attention. But, you know, 10, 15 years later, something like, for instance, you know, this is a gong I've banged a lot. The way, for instance, that Google prioritizes YouTube and its search results to make to ensure its dominance in video, right? The fact that I think the death knell of the open internet that we should have seen coming was the fact that when

YouTube came on the scene, it was instantly the only place to watch video, right? As the only, like the, sure, you can go on daily motion maybe, but you're not really looking on daily motion. You're looking on YouTube. If it's not on YouTube, you're not watching it. And, and like YouTube immediately became the only source. And part of the reason that was, was because Google was able to use their monopoly in one area to give themselves dominance in another area. That's exactly what Microsoft was doing. They were, you know, their web browser was part of their operating system and they were forcing people to use it. What Google does is arguably worse because it actually worked. It actually happened, but there was absolutely no enforcement around it. And so are we going to start seeing that sort of enforcement again?

And are some of these companies going to be broken up in your view? I mean, that's a big crystal ball for me to ask you to look into, but. Always, you know, the future is always unwritten and predicting the future is a dangerous business. But, you know, we haven't had a regulator like Lena Kahn in the federal government in that kind of position for a long time. I mean, Lena Kahn is, she's Biden's appointee to run the FTC and just has authority over everything from mergers to a lot of different ways that a lot of different aspects of all kinds of businesses, not just tech businesses. And she's not messing around. I mean, this is her intellectual movement. I mean, there are other important figures in it, but she really is the sort of North Star

theorist who, you know, she's been teaching at Columbia for a while. I'm not sure if she had another law professor job before that. I've only known her for a few years, but she's been working on this for her whole career. She's not there to just get a job and fill a seat. She's going to do stuff. And there is a new kind of consensus around people at the top levels of the administration that this stuff matters. So you will absolutely see the administration try. Now, whether they are successful, I think, depends a lot on how quickly these ideas circulate through the judiciary, because all these companies are going to invoke every single legal mechanism they possibly can to try and stop this stuff from happening. And if the courts are still stuck in, you know, 1978 legal theory, then they'll lose. But I think, you know, the way that Kavanaugh is writing about things for the Supreme Court

suggests that there is some room for a lot of different types of antitrust action against different types of antitrust action against different types of companies. Big tech is, I think, rightfully, they've earned their slot as the sort of big bad guys in the American economy right now. But they're not the only, tech is not the only sector in which you have a concentration problem. So I certainly think the administration will try. But I also think, you know, when you look at these big multi-trillion dollar proposals to, you know, to create new child care systems and or, you know, at least more support for child care for families who need child care for in-home care,home care. These have to go through something. The government doesn't just send out checks

and the checks just magically solve problems. They have to go to institutions which then do stuff. That process is always messy. Again, there is kind of a tension here between spending a lot of money and getting it out the door quickly so it can do things that typically means operating with big operators. So how that money is actually spent will matter quite a bit. And you could easily see a lot of money being wasted by monopolies in that process. But it's not as if these problems are going to solve themselves absent some sort of coordinated public response. The reason that we have the problem is because we've

had markets around for a long time. These are not the types of problems that the markets that we have had have been able to solve. Yeah. But it's just fascinating to me that like, look, there's a lot of things that the Biden administration wants to make progress on, right? They want to make progress on voting rights reform, on climate change, on this infrastructure. Like the first two seem to have very little chance of making their way through Congress. Infrastructure, they're doing their best to sort of bully that through. But antitrust as something,

just another pressing problem that the country has, like seems to actually, we might actually see change on the issue a little bit quietly, a little bit in the background, but in a way that's like really powerful perhaps. I don't know. Do you, like it feels like there's a big rock that's like really powerful, perhaps. I don't know. Do you, do you, like, it feels like there's a big rock that's shifting a little bit. Do you share that feeling?

Yes. And you have administrative levers that can be pulled. I mean, it's not, you don't just, you don't have to go to Congress for a new bill every time you want to do something about what's happening in, you know, in the case of Facebook, for instance, you know, they had a consent order from the FTC, a regulatory, you know, kind of sanction against them in 2011. You know, how you deal with, I mean, it seems very clear that they violated that over and over and over again. How you deal with that is something that the regulator has to deal with.

It's not something that Congress deals with. It's not something that the judiciary deals with unless the company sues over how the regulator enforced it. So you have things that only regulators can do under the law. And those tools are really very powerful. Whether the courts will respect them depends on the court. But I do think there's a lot of potential right now for some pretty big changes to take place. The Biden administration does have a lot of different priorities. And it is a particularly difficult era to actually do things in the United States. I mean,

yeah, to say the least, it's, this has not been, these are not the glory days for American government, right? There's a reason why, you know, the Trump, the Trump make America great again, slogan, I think really did harness a sense that a lot of people have that something has gone wrong lately. The things are worse now than they were before. Whether that's true or not, these are big historical questions. But I think a lot of people do have that sense. And certainly, the government's just not super functional. You can see even things like the rental assistance that was supposed to go out under the first tranche of Biden money, Like 83% of it is unspent. This is billions of dollars in aid that's just supposed to go to people trying to pay their rent.

And we just haven't been able to get that money spent somehow. So that's, you know, that's a genuine cause for concern, I think. But over the course of the pandemic, generally, the government's done a good job getting money off the door. You know, there are a lot of horror stories, but I don't think there are a whole lot of people who think, wow, if we had if the government had just sat on its hands and not responded financially to the pandemic, things would have been better. That doesn't seem to be a very popular opinion, even among people who are enthusiasts of what we used to call the free market or laissez-faire economics. Yeah. Are you worried at all about the, again, this growing coalition, right, disappearing or maybe not having the results that we want? Because, for instance, I think about there was a lot of news a couple of years ago about there being a growing coalition between

the conservatives and the liberals about criminal justice reform. That we had, you know, a bunch of conservatives feeling that, oh, you know, mass incarceration is too expensive. We should reduce and it's not having the results that we want. So we can reduce that. Of course, liberals want criminal justice reform. There was I think the only big reform bill that I can think of that came out of the Trump administration or that was signed by the Trump administration was the First Step Act, which was a first step at some criminal justice reforms. But then that coalition quickly dissipated as Trump started running more on a tough on crime platform and, you know, the Black Lives Matter protests and

et cetera. And, you know, that First Step Act was really, you know, you can debate how many steps forward and how many steps back it was. So there was a much ballyhooed consensus that, or coalition that, you know, sort of evaporated into the mist. Do you have that concern at all that, you know, if we listen to this conversation again,

two years from now, and I'm going, oh my God, Brett Kavanaugh and Ted Cruz agree with Lena Kahn. Right. Woo hoo. We're going to solve a bunch of problems here. Is that going to look pretty naive a couple of years from now? You know, you always run the risk of being naive at any time you say that a better world is in any way possible. But if you don't if you don't try, then you never get there. So, you know, I think, sure, it's possible. But if you don't try, then you never get there. So, you know, I think, sure, it's possible we will look foolish in a few years for talking like this. But, you know, under Trump, I think the Democratic Party, it was very obvious to Democrats and people who are not aligned with the Republican Party that the

Republican Party's ideological beliefs were shifting because of the president's personality. The president had an ability to say, nope, I want to do it this way, and the party would follow him. And I think for Democrats, that was pretty horrifying to watch. But that is the way intellectual change often happens. There are these ideas. A lot of the ideas are good. Not all of them are good. But until somebody in power starts doing something with them, you don't get the sort of consensus, you know, hegemonic shift in conventional wisdom that you saw, at least within the Republican Party under Trump for a whole bunch of stuff. And I think you're seeing now under Biden, at least with the turn to

Keynesianism and to antitrust. There are a whole bunch of other things, the Biden administration, I don't have a clear sense of, I think the Biden administration's foreign policy, for instance, is clearly different from Barack Obama's foreign policy and that we are getting out of Afghanistan right now. But what does that have to, is there a comprehensive theory that links what's happening in Afghanistan to antitrust and to Keynesianism that can explain all of this? You know, I don't know. There will be intellectuals who are sort of held up to legitimize whatever it is the Biden administration does. But I think the success or failure of these ideas as intellectual paradigms, as ways to see the world, depends entirely on their political success. If the

political world can't make it happen, then the ideas will be discarded. Um, and, and something else will, will come along. Well, thank you so much for joining us to, to help pieces through all this. Uh, where can folks find out you tell us about your book a little bit. Yes,

I have a book, uh, called the price of peace, uh, money, democracy, and the life of John Maynard Keynes. It's a biography of John Maynard Keynes,

uh, as the title suggests. It's on Random House. You can get it at bookstores everywhere. You can even get it at Amazon. I won't be mad. Or you can get it

at our special bookshop at factuallypod.com slash books, where if you get it there, you support this show and your local bookshop because they give a little money to your local bookstore.

See, that's a good one too. Or Amazon, if you like, or better yet, walk down your local bookstore and buy a copy. But do buy it, please. I really like your money. And I hope you get a lot of it. Zach, thank you so much for being here. Can't thank you enough. Thanks so much for having me, Adam. And I hope you get a lot of it. Zach, thank you so much for being here. Can't thank you enough. Thanks so much for having me, Adam. Well, thank you once again to Zach Carter for coming on the show.

I hope you enjoyed that. Once again, if you want to purchase his book, you can pick it up at factuallypod.com slash books. That's factuallypod.com slash books. And that is it for us this week on Factually. I want to thank our producers, Chelsea Jacobson and Sam Roudman, our engineer, Ryan Connor, Andrew WK for our theme song, the fine folks in Falcon Northwest for building me the incredible custom gaming PC that I'm

recording this very episode for you on. If you want to send me an email about the show, you can send it to factually at adamconover.net. That's factually at adamconover.net. And I do read those emails and sometimes I even reply. You can find me online at AdamConover.net or at Adam Conover wherever you get your social media. Thank you so much for listening. We'll see you next week on Factually. That was a HeadGum Podcast.