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The Next Recession


One thought I’ve had a lot over the last couple of years is that the real power of the rejuvenated left will truly be determined in the next recession, not in this presidential election. The biggest reason that no bankers went to prison after 2008 is that the left was so enervated and weak that there was no left demands to move any kind of agenda at all. This is a big reason why people read so much into the moderate technocrat that was Barack Obama that was counter to his entire career. Finally, Occupy started moving the left toward real organizing and that has continued in the years since, moving in different directions that we can see in all sorts of places today, including the recent strike wave and Sanders and Warren campaigns. The left needs to continue to grow--both inside and outside electoral politics. Ultimately, it’s going to be the next real crisis point where the left will demonstrate what power it has or doesn’t have. And before you say Trump is a crisis point–yes that’s certainly true in many ways, but in terms of the daily lives of most Americans, not much has changed because the Obama economy is still in effect.

So one reason I liked the piece on antitrust for a new generation by Sanjukta Paul and Sandeep Vaheesan is that it uses the future recession as the key point.

That’s why, if reform can’t happen sooner, we ought to seize on the next recession as a moment of crisis in which to remake antitrust law and restore its historical purpose: to redistribute economic resources and power to the people. A more equitable distribution of income and clout would make our economy more stable and less susceptible to sudden downturns, as well as empower all citizens.

US law regulating monopolies was intended to put a check on the likes of John D. Rockefeller and J.P. Morgan, who monopolized industries like oil refining and steelmaking. Now, though, its aim of preserving competition helps large companies while hurting small businesses, workers, and consumers by allowing corporate behemoths to merge and preventing groups of independent workers and small firms from building power through collective action.

To understand the upside-down nature of the law, consider the gig economy. This sector has become a significant source of employment (albeit precarious and badly paid) since 2008. And as far as antitrust law is concerned, large corporations like Uber and Lyft have enjoyed the freedom to set prices for hundreds of thousands of putatively independent drivers. Meanwhile, the gig workers do not have the right under existing antitrust law to organize to raise their wages and demand better terms of work. When Uber engages in price coordination, it’s legal. When gig workers do, they’re considered to be acting collusively.

Not only is this a legal paradox; it is also the making of economic disaster. When the next recession hits, Uber will be tempted to slash its drivers’ incomes further, and drivers will have no remedy through collective action. Moreover, this Uber antitrust paradox is playing out across the economy more broadly. Currently, antitrust law’s official purpose is to promote competition, yet it uncritically allows and even blesses the economic coordination that takes place within big firms. Demanding that antitrust law promote only competition is not a tenable solution. Competition is not categorically good. Indeed, we take many of the current limits on competition for granted, from patents and property rights more generally to business corporations themselves, all of which antitrust law recognizes as legitimate. The fact is that both pernicious and socially desirable forms of competition and cooperation exist. A cartel of large pharmaceutical corporations fixing the prices of lifesaving medicines has consequences radically different from a group of workers or small firms confronting a powerful purchaser. Yet antitrust law today treats these two cases as legally indistinguishable.

Again, we will see where we are at with the next recession. And it’s why regardless of the presidential election, we need all sorts of organizing for change and to build power and capacity and make new demands and hold politicians accountable.

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