This week, we’re sharing a few of our favorite posts from Notice & Comment’s recent symposium on Networks, Platforms, and Utilities, a new casebook by Morgan Ricks, Ganesh Sitaraman, Shelley Welton, and Lev Menand.
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One of the things that constituted the neoliberal era in law schools was a mainstreaming of a very particular view about markets. Markets were presumptively efficient, neutral, and likely to resolve difficulties by routing around them. They were the solid ground beneath our feet, moving us inexorably toward the efficient result, much the way the landscape routes a river to the sea.
This casebook is an unmistakable event in the undoing of that perspective – revealing it not just as wrong now, but as wrong always. Markets are made by people, and this casebook, organized sectorally, has the quality of naming names. You’ll hear about the private school that Bill Gates went to and why it mattered. You’ll learn why the fact that Ben Franklin was the first Postmaster General influenced the history of the Post Office. The basic feel is that particular people, institutions, and histories, matter – and that we must integrate deep understanding of these contexts with functionalist and structural thinking to address recurring problems in the operation of NPUs, like the possibility of monopolization, discrimination, and cream-skimming. It creates a template for a radically different approach to thinking and teaching about the economic governance for lawyers. All the better that this approach uses the skill sets lawyers actually have (at least ideally): working with people, and thinking like institutionally-minded problem solvers, to write and interpret laws to govern highly complex processes that shape our collective lives.
What happens when we stop generalizing about the economy from the starting point of the grain market, as neoclassical models all seem to, and start generalizing from the post office, or the operating system? That’s the kind of question this casebook puts on the table, and it is a major accomplishment. It not only brings into view the historical evolution of different utilities, networks, and platforms, but also brings into view the major institutions designed to regulate them. Frankly, I’m embarrassed at how much I learned in the first 200 pages about NPU law’s objectives, regulatory toolkit, and institutions. The book makes excellent reading material for faculty who don’t work on or teach one of the NPU sectors in the book, because it introduces a set of highly evolved institutions and a radically different paradigm of market governance than what most of us, if trained in law in recent decades, think of as normative.
Now to what the book leaves out. There’s a funny way, as I was reading, that the book felt to me overly focused on the “economy” side of political economy, and insufficiently attuned to the “political” part of political economy. Four examples will help illustrate the point.
Early on, the book tells us that “NPU law is concerned in part with maximizing efficiency.” Here, and elsewhere, the book seems to suggest that we can take the value of efficiency as an appropriate and coherent metric. But that’s of course one of the central questions of LPE scholarship. Efficiency cashed out as wealth maximization isn’t a neutral value, nor a coherent and democratically warranted one in most settings. One of the puzzles for those of us interested in political economy is how to talk about economic governance beyond the myth of some singular, neutral, mathematically derivable value called efficiency, while also keeping whatever contemporary economics can contribute to our understanding of the dynamics of economic life and governance. Can we use concepts of “public goods” and “network effects” without importing the model of objectified, self-correcting markets that stand outside of social relations? Do these concepts need to be modified to do that, and if so how? This is a book that can help us think about this problem, but less so if it doesn’t surface it explicitly.
Second: The book should do more to thematize the critical political economic consequences – as opposed to more bare “economic” consequences – of how NPUs are managed. For example, early on the authors describe nondiscrimination norms as central to the NPU toolkit, but don’t really say why, beyond a few references to overcharging and “favoritism,” all of which sound in fairly conventional economic register. It’s not, I think, by accident that we regulate the postal service, energy, and banking law, to try to ensure universal access. And the reason isn’t just for the sake of efficiency.
Today, a key feature of NPUs – I’d even say one that belongs on the list of the factors that tend to make something an NPU – is that access to them is essential for pretty much everyone. It’s even a key aspect of how courts, and the rest of us, think about what a public utility, or infrastructure, is today. They’re those systems that we have to have access to in our society. When did electricity or running water become a “platform” or “utility”? When they stopped being something that some people bought as a private good in the marketplace, and became something that all of us depend upon. Things that are so essential generally have to be regulated to be available in some measure equally to all in a decent society. There isn’t an accidental relationship between NPUs and democracy, this means – they are infrastructural to it, and because of that it is not possible to allow them to be commodities in the normal sense of the word (H/T Karl Polanyi). This opens the door for a critically important concept and value in NPU law, which we might call universal access (or even decommodification, aspirationally?) that we need political and not just “economic” tools to think about.
Third, there could be much more here on systems of power and how they operate through the regulatory state. Law operates in, and shapes, fields of power, and NPU law is no different. Lakier and Macey made a version of this point, noting that firms have used the tools of NPU law to entrench their dominance over rivals, and to stand in the way of progress toward renewable energy. My own view is that a central question in LPE today relates to this issue: how institutionally do we best connect politics to market design, for example by democratizing administrative processes? Given the complexity of this task, and its importance, it would make sense in the administration chapter to give some attention to it, focusing not just on judicial review and rate regulation, but also on how NPU scholars have thought about the public’s participation in administration.
Many NPU scholars have in fact done deep work on this question, in ways that help connect conventional admin law courses to a course on NPU. Two good – and contrasting – examples from an LPE perspective are Sabeel Rahman and Blake Emerson’s work. Rahman, in Democracy Against Domination, describes how a theory of democracy can require the institutionalization of countervailing power. Emerson sounds some similar notes in The Public’s Law, and asks how a bureaucracy can be both publicly responsive and efficacious at the same time. With material like this in view, a class would be set up to discuss how and when NPUs should incorporate public values and processes – for example, porting to a discussion of permitting reform in an energy law discussion, or the pros and cons of community control over local utilities, or the relationship between public utility law and public accommodations values in a world after Masterpiece Cake.
Finally, the book could use more reflection on the politics of the category of NPUs themselves. A few other comments in the symposium have described this, so I won’t belabor the point. The authors themselves make the point that NPU-ness is more of a spectrum than a binary, but it should be more central to the framing of the book. Healthcare is an obvious example of something that should, even on the authors’ own definition, clearly be included as an NPU: it’s a means to an end, it delivers predominantly services (though this seems like an odd criterion to me, and to buy into a goods/services distinction that is less coherent in the digital age), and it is shot through with network effects, monopoly issues, and horizontal interconnections. It might even be the quintessential NPU of the next century – the largest employer, close to 20% of GDP, and essential to our ability to care for ourselves and one another.
It’s hard enough to introduce NPUs as a concept, so there is no doubt a temptation to mainstream them in their most familiar form. But the intervention is too important to be limited in that way. The deft device of the chapters “to come” – in an age where casebooks can be online and not constrained by page limits – has left the authors the possibility of still more future chapters on things like healthcare and education, and I hope very much that they add them.
