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LPE Originals

The Functional Logic of Antitrust: Oligarchy vs. Democracy

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The reinterpretation of antitrust in terms of “consumer welfare” has not resulted in bountiful consumer welfare, but oligarchy unleashed. But, as I wrote in the Journal of Law and Political Economy, antitrust can be a force for fairness and democracy again. A reimagined antitrust law that restricts consolidation of business assets and permits certain forms of coordination among small actors would limit domination and disperse power.
LPE Originals

The Hidden Shortages of the Market Economy

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If you think shortages—in goods like toilet paper, meat, and masks—came in with the pandemic, think again. Shortages are periods during which demand exceeds supply, and they’re an inescapable feature of all markets, all the time. When an investor bids up the price of Apple stock because none is available at current prices, that’s a…
LPE Originals

The Economics of Shortages

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The price of food increased 2.6% in April, the largest single-month increase since 1974, but food industry executives are insisting that the country has enough food. So why are prices going up? The explanation provided by the industry is that consumers are buying more than they need, creating shortages. But a shortage is not a…
LPE Originals

Killing Antitrust Softly (Through Procedure)

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The Supreme Court has waged a multi-decade war on private rights of action. It has subverted the rights of consumers, workers, small businesses, and others to hold corporations accountable for wrongdoing through lawsuits. The Federal Arbitration Act (FAA) has been a preferred tool of the Court. Since the 1980s, it has reinvented this modest statute,…
LPE Originals

The Erosion of Public Control Over Public Utilities

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Since the 1970s, Congress and federal agencies have replaced regulator-established rates with market-derived pricing in many sectors of the U.S. economy. Electricity and natural gas are two such industries. Congress and the Federal Energy Regulatory Commission (FERC) have abolished regulated rates and instituted market-based pricing in a part of the electricity and gas supply chains.…
LPE Originals

“As if the Last 30 Years Never Happened”: Towards a New Law and Economics, Part 1

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The empirical research we present in this post itself exemplifies how economics can be a powerful tool for examining (and not just assuming) the relationships between the formal structure of the law and the activities of economic exchange. As we lay out further in a subsequent post, legal leftists who fail to engage with the richness of academic economics miss out on many important insights.
LPE Originals

The Allocation of Economic Coordination Rights

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The concept of economic competition is central to policymaking deliberation in this country. Yet even as our understanding of that concept evolves to take better account of corporate power, our thinking about competition retains a fundamental blind spot. Simply, the boundaries of the business firm insulate many instances of economic coordination that would be deemed anti-competitive…
LPE Originals

Khan on Ohio v. American Express

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I recently published two pieces assessing Ohio v. American Express, the Court’s most significant antitrust opinion in a decade. At Vox, I explained how the Court’s 5-4 decision ratified a new and troubling approach to antitrust. In short, the Court created a special rule for what it describes as “two-sided transaction platforms”—a term that encompasses, for example,…
LPE Originals

Against the Cult of Competition

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Competition is one of the talismanic words in law and economics and American life. It is often hailed as an unqualified good and touted as a solution to what ails society. The value of competition is endorsed across the ideological spectrum: Conservatives decry the lack of competition in schools and taxi cab services, while progressives…
LPE Originals

Antitrust and the Informal Sector in South Africa

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This is the second post in a two-part series about law and political economy in the South African context. The series reports on a collaboration among leading ‘heterodox’ economists, left-wing sociologists, high level government policymakers, and legal scholars, advocates and activists aimed at “thinking large” about reconstructing the nation’s political economy. *** The way out…
LPE Originals

From Territorial to Functional Sovereignty: The Case of Amazon

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Economists tend to characterize the scope of regulation as a simple matter of expanding or contracting state power. But a political economy perspective emphasizes that social relations abhor a power vacuum. When state authority contracts, private parties fill the gap. That power can feel just as oppressive, and have effects just as pervasive, as garden…