In his recent blog post, Gabe Winant describes a reform program associated with antitrust in order to contrast it with and sharpen the features of an alternative framework: “socialism, with Marxism behind it as an intellectual tradition.” I appreciate the post as an honest, careful effort to characterize certain apparently foundational disagreements—or at least divergent operating assumptions and ideas—about how the world works and how to move toward a better one. This response hopes to build on that effort, and in that same spirit.
While labels and camps aren’t the ultimate point here for anyone, they can be useful to a degree for bringing out substantive questions that actually do matter, and some initial clarification is in order here. Antitrust is an area of law and policy activity. Within that area, there are active debates, such as, for instance, whether the goal of antitrust should be to maximize economic output or to disperse economic power and decision-making. Winant identifies one set of partisans within those debates—let’s call them Brandeisians—as his main interlocutors, and as a foil for Marxism. It’s worth noting, however, that many of those same partisans see themselves as part of a somewhat broader effort to shift the common sense of “economic” law and policy thinking, e.g., in antitrust, corporate law, banking and finance, and other fields (particularly but not only fields that might be associated with regulating as well as constituting business institutions). I’m not sure quite what the label for that project is or should be, but I think at least part of Winant’s argument aims at that intellectual, political, and social register of activity rather than merely at antitrust, strictly speaking. Regardless, none of these efforts hope to present a total worldview at the level of Marxism or even, in my view, socialism.
Winant makes a set of mutually supporting but logically separable criticisms of this constellation of efforts: that antitrust partisans wrongly think the law capable of fundamentally modifying a set of “quasi-automatic” causal mechanisms inherent to markets or to the capitalist mode; that antitrust aims to improve the circumstances of a segment of “capital” (small producers), rather than workers, and thus picks the wrong player, so to speak; and finally, that those who hope to reform economic law embrace a kind of quixotic “voluntarism” that imagines that better (fairer, more democratic, or more egalitarian) legal choices can just be made by fiat, or perhaps through intra-elite agency and persuasion. All of these criticisms are worth taking seriously.
***
The sharpest potential disagreement, and therefore perhaps the most productive one, concerns whether a relatively predictable set of causal patterns can be ascribed to a distinctive set of economic arrangements that we might call markets, or the capitalist mode of production. With respect to this issue, as Winant notes, the Brandeisian reformer finds themself positioned between a group of left critics (Marxists) and a group roughly defending status quo economic law and policy, each of whom tend to credit the quasi-automatic market mechanism to a somewhat greater degree—though, of course, the latter tend to valorize this mechanism, while the former see it as destructive but inevitable (without more fundamental transformation). As Winant writes, capitalism “dominates not by personal authority, as feudalism did before it, but by impersonal, quasi-automatic mechanisms. Even plantation slavery, the most personally despotic form of capitalism, was subject to market discipline.” What is the “quasi-automatic mechanism” to which even the plantation owner is subject? It is “the requirement of competition, the internal law of the capitalist system,” driven by the profit motive. According to a set of views that Winant relates, this requirement of competition leads inevitably to monopoly, itself a stage in the unfolding development of the system.
What’s described here as distinct stages—competition giving way to its absence—are actually, I think, two coexisting aspects of any system involving reasonably complex economic activity that is mediated to some degree by exchange and prices: namely, economic coordination (which has other forms besides monopoly) and competition. Indeed, while economic competition often plays a central role in theoretical accounts of markets, economic coordination is also analytically indispensable when it comes to understanding the economy. Specifically, economic coordination not only constitutes the economic “units” that will engage in competition (a point that Marx himself was clear about in his discussion of the realm of production, in essence the business firm) but also suffuses markets and industries in a wide variety of patterns that are difficult to square with the picture of quasi-automatic market mechanisms.
As the economist Frederic Lee has written, a market is a “social structure qua institution and whose existence is predicated on continuous and sequential transactions of a specific product. The market is also the site of socially structured competition, which means that variations in the social structures result in different kinds of competition within and across markets.” Lee names here the essential role of “legal rules and practices that specify how enterprises are organized and engage with each other in the market,” crucially including “how enterprises cooperate, compete, or merge,” in other words, antitrust or competition law. Law, and antitrust law in particular, are thus important not only for their potential in reform, but also analytically, because of law’s irreducible role in structuring economic competition and coordination in particular ways that then create particular, path-dependent dynamics and results. Contra any picture of markets operating via quasi-automatic mechanisms, the organization and operations of any such market are as much a product of contingent rules as any law of nature.
The point is not to erase competition and external constraints from this picture, but to insist that the “forces” of competition and the objective constraints they may represent necessarily play out in interaction with systems of economic coordination—in and between firms, informal business networks, governments, trade unions, market exchanges, industrial cooperatives, and other forms—and that both these systems of coordination and to some degree the competition itself are necessarily shaped by social and legal choices (which do not themselves flow neatly or uniquely from those same forces). Therein lies the main issue.
Importantly, socially and legally determined patterns of coordination extend to the very determination of price. Many or even most markets are characterized by tacit price settlements, effectively created through social mechanisms among business actors and indirectly or directly supported by law. For example, prevailing antitrust law generally tolerates “conscious parallelism,” so that conscious but uncommunicated price coordination between competitors is essentially permitted, so long as an overt agreement about prices is avoided. It is also, of course, true that price wars and other disruptions occur, which may rupture these settlements and eventually lead to new ones—whether it is simply a new price level, or a more basic change to market structure in which firms merge, or one firm or a set of firms emerge as clear market leaders that set the price level. And while conscious parallelism is much harder to pull off in markets populated by numerous very small firms, for instance, these are often precisely the markets in which adjacent actors (for instance, Amazon relative to small merchants, or well-capitalized shippers relative to small port trucking companies) exercise significant power, effectively harvesting the gains from such controlled chaos. Neither phenomenon can really be characterized as an automatic mechanism lacking in conscious human coordination or control.
So what lies beneath price competition as an objective constraint, to which any form of coordination, flow of competition, or set of market rules must respond? One is the comparative cost structures faced by producers, in light of uneven technological changes and changes in the availability of resources and inputs, whether those changes affect the “same” product or a closely related existing or new product. There does not seem, however, to be any reason to believe that changes to cost structures play out in a law-like way over time or across sectors. For example, mainstream theory says that the firm’s cost curve is upward sloping, or that marginal costs increase as production increases. There are numerous counter-examples to this, as well as reasons to think that an individual firm’s “marginal costs” will change in a variety of ways over time, with less or more production, as well as many other factors. This is assuming we can perform such a calculation at all for complex multi-product firms facing a wide variety of overhead costs. The bottom line is that whether for the individual firm or specific sectors or the economy as a whole, the question of cost structures seems to be an empirical one, rather than one subject to systematic, law-like relationships.
The other primary “objective” economic constraint is changes in consumer preferences or demand, which the modern outlook especially tends to emphasize. But while demographic trends are obviously relevant to effective demand, more fine-grained variations in consumer demand are themselves heavily shaped by the nature of technological investment and change, product design decisions by leading producers and, critically, by ability to pay (which in turn is heavily determined by various public policies—at least within a world whose basic total resources currently exceed its basic total needs). Regarding the contemporary tendency to understand “pure” consumer demand as an objective, quantitative constraint, Ernest Mandel wrote:
If I ask somebody: “What is the utility of this knife to you?” he will reply: “A very great utility”, or “I use it a lot”, or else “I have no need of it at all”. Nobody answers … by stating a quantity. [] Resigning themselves to not being able to express use-value quantitatively, the marginalists fell back on a quantitative expression of the needs which use-value has to meet.
As this implies, use-value is also more often than not embedded in social processes—not merely in the sense of cultural and social influence on the individual, as important as that is, but literally, in the various industrial and household production processes for which a vast array of goods are inputs. These in turn are the products of many conscious social choices, a great many of them shaped by law.
To be clear, there is no need to deny the existence of objective or external constraints on market settlements and flows of competition—especially those flowing from changing availability of resources, technological change, and demographic change. But there is, I think, a need to insist that the effects of these constraints play out through systems of socially and legally shaped coordination and competition that are non-trivially different from each other.
Nor is there any need to claim that all rules and settlements are equally politically or socially feasible at a given time. While that is, of course, false, both comparative and historical observations show that an important variety of competition- and coordination-structuring rules have coexisted with the “system-logic of capital.” Historically, even the places and times more strongly associated with pre-monopoly capitalism were characterized by levels and types of economic coordination that need to be acknowledged. The early and mid-nineteenth-century American economy (even putting aside slavery) is one such place. As William Roy wrote of that time:
While it is common to think of devices to control prices as a form of economic deviance, the sheer number of such devices, especially at the local and regional level, indicates that they may have been the norm rather than the exception. Local and regional markets were rarely comprised of atomistic producers facing an impersonal market of equally atomistic consumers. Rather, there existed a wide variety of governance regimes with varying degrees of market dynamics.
Case reports of disputes in which various economic actors sought to legally enforce their pricing arrangements tend to confirm Roy’s inference. Throughout the nineteenth century, courts applying common law not only did not punish but frequently enforced what we would today call price-fixing agreements, but which at the time were seen as perfectly natural devices for attempting to stabilize one’s market environment. These arrangements ranged from rate-setting agreements between “mechanics” that evolved directly from craft governance, all the way to the modern idea of business “cartels.” Obviously, these agreements did not insulate participants from any of the rapidly changing ‘external’ constraints mentioned above. As the steamship gave way to the train, no amount of coordination between steamship captains could buck changing realities. But that both forms a justification for the coordination, and points toward its role in smoothing transitions whose worst effects otherwise fall upon the least powerful actors. As one nineteenth-century judge noted, direct coordination among producers should be permitted precisely because their collective decisions did not operate by fiat, and were instead constrained in numerous ways. If instead the courts had enforced a stringent rule against price coordination (as indeed they would do more and more in the decades after 1890), that would result in a very different set of dynamics and results.
Some of this variety is also evident across domestic systems, with the caveat that the global nature of the economy and the dominance of some actors within it probably limit the extent of this variety. Consider, for example, Kathleen Thelen’s body of comparative work on Germany, which has shown that greater legal toleration for direct coordination among horizontally situated market actors has produced a very different set of market dynamics, specifically including the dynamics between labor and management. (Germany is still the base for one of the world’s strongest industrial unions.)
Louis Brandeis, in fact, looked toward German industrial organizational patterns, in which small to medium sized firms often survived through direct coordination up to and including price, during the same period that the American economy moved further toward mergers and consolidation into single firms. More generally, Brandeis fundamentally thought about competition as something that was channeled through social and legal choices and—as he observed regarding various forms of cooperation—that competition could proceed on some dimensions even if it was controlled along one dimension (e.g., wages or even prices).
But that’s not an observation unique to the antitrust tradition. The English socialists Sydney and Beatrice Webb made the same observation in elaborating their economic arguments for a robust sectoral living wage, noting that not even competition between workers was eliminated through wage coordination. While Brandeis and the Webbs were indeed arguing normatively in favor of specific forms of coordination in making this point, the point itself has a more general analytical component. Market organization is as much a product of contingent rules as any law of nature. This is important for understanding the economy—even if it is concluded that the variety of rules attainable under current constraints is limited. I have here focused on varieties of price coordination, because they form perhaps the most direct challenge to “the law of competition” as typically construed, but a variety of other contested rules that have indeed changed over time also help to constitute market activity, including the categories comprising “capital” itself.
***
Too briefly, I’ll address the point that antitrust partisans side with small capital over labor. First, it is important to emphasize that, in recent years, the project of trying to affect the direction of antitrust law has in fact been focused as much on workers qua workers as it has been on small business. One priority, for instance, involves unraveling the tensions created by a loosely interpreted “consumer welfare standard” that not only tends to excuse corporate power but specifically serves as a kind of license for labor discipline that appears to be inconsistent with any of the carefully theorized purposes of antitrust law.
Beyond that, it is true that antitrust partisans envisage the possibility of strategic labor-small capital alliance, at least in many cases, to a greater degree than most Marxists probably do. Speaking for myself, spending time with the labor-small capital distinction has made me more skeptical that an essential economic logic drives political differences between these categories. To be clear, there are obviously many important functional differences meriting distinct legal and political approaches; what I doubt is the a priori view that the divide between labor and small capital is necessarily strategically or analytically more significant than, say, the divide between big capital and everyone else.
For example, I certainly think that professional workers are workers in the full sense—but is it really true that the Punjabi small farmers who agitated against the Modi government efforts to undo publicly supported price coordination, or the New York City bodega owners who support Zohran Mamdani, are on the wrong side of the salient political line while relatively well-paid academics (or nurses, or city employees) in the United States are on the right one?
Of course, there are many in the “small capital” category who do not seem interested in an alliance with labor. But one again has to ask whether social reality at this level is the result of an underlying economic “logic,” or how much of it is contingent on prior and current legal choices. Some of the worst offenders where labor is concerned do what they do for structural reasons that are nevertheless shaped by law: they often exist in market environments in which they cannot coordinate directly on rates or other matters, have razor-thin margins, and are subject to much more powerful actors in adjacent markets. Winant would agree with most of this, of course; the question is how much is contingent upon legal rules within our reach. What if our legal regime channeled small business coordination in different ways?
To take a historical example, independent fishermen along the west coast in the late 1930s through the 1950s engaged in broad, multi-racial organizing, forming unions to bargain with buyers, a remarkable feat. Their organizations were tragically destroyed in large part because the legal system policed the labor/small capital line too well. (The other component of this dual attack was persecution for harboring communists.) I don’t see how someone highly committed to the labor/small capital divide could fault the decision to deny the fishermen “the labor exemption.” In fact, the Supreme Court decision on fishermen and the antitrust labor exemption turned on the fact that the labor exemption was articulated partly in terms of the idea that “labor is not a commodity,” while the fishermen were undeniably involved in selling commodities (and also undeniably owned capital, though small).
***
Finally, the point where there is least disagreement at the broadest level concerns the issue of structure and choice in the horizons of possibility open to us. Who could possibly look at the last two years, for example, and believe that we can “just choose” better rules or outcomes—or that intra-elite persuasion and argumentation alone could manage to win the day? One appeal of the Marxist orientation, I think, is the deep sense that there is something fundamentally connected about the many ways in which our world needs to turn away from domination of all kinds—from the more subtle and insidious to the overt and violent—and toward material care for all humans (and the Earth) and meaningful mutual respect. I admire this conviction, and in some ways I share it.
But the fact that the horizon is constrained—even constrained in ways that plausibly constitute a kind of collective madness—does not itself answer the question of the nature of the constraint. It doesn’t tell us whether these deeper connections can be known through analysis at all—or whether they are instead perhaps aspects of reality to be felt as motivating forces, rather than analyzed at the discursive level of mind. More specifically, it is frankly not clear to me that the categories “labor” and “capital” form the basis for the deeper structure animating our phase of history. This is especially so because these categories (especially “capital”) are themselves creations of law. While that alone doesn’t resolve the issue, of course, it does point back toward the varieties of economic organization in our recent past and across existing legal systems. Within that variety may lie the seeds of possibility, whether directly through horizon-opening reform or indirectly through greater understanding.
