Biden’s new approach. The Biden Administration has signalled a new approach to competition policy in the US, potentially ending 40 years of neoliberal orthodoxy. Biden’s recent executive order taking 72 separate measures against anti-competitive practices by big businesses is being seen as the opening salvo in a larger plan to curb the power of monopolies in the US economy.
~~The appointment of Lina Kahn to head the FTC. The first sign of this new approach was the appointment of anti-trust lawyer Lina Khan to head the Federal Trade Commission (FTC), the US’s competition regulator. Khan became famous for writing (while still a student) an influential article on Amazon’s anti-competitive business practices and why the neoliberal approach to competition law (in the US called “anti-trust”) made the government powerless to curb them. The article called for a new approach, and since her appointment Khan has set about reforming the FTC accordingly.
~~The decline of neoliberalism? Since 1979 competition policy in the US - and the UK - has been based on the theory espoused by the free market Chicago School. This argued that the only test for competition should be consumer welfare, which in turn should be judged solely by the impact on consumer prices. Under this philosophy, significant anti-competitive practices have been ruled legal, and monopolies allowed to flourish. Khan and other scholars argue that market structure is critical, and the law should test its impact not just on consumers but on workers, producers, entrepreneurs and citizens. Economics blogger Noahpinion has summarised the new approach and explained recent academic scholarship analysing the various economic harms arising from corporate concentration.
Stronger competition policy in the UK? Former Conservative MP Andrew Tyrie, who resigned last year as chair of the Competition and Markets Authority (CMA), has criticised the UK’s light touch approach to regulation in a report published by the centre-right Centre for Policy Studies. He called for new regulatory powers to enable the CMA to tackle the growing monopoly power of the tech giants. Conservative MP John Penrose authored an independent report for the government arguing similarly for stronger competition policy earlier this year.
~~The CMA and Big Tech. In February the CMA announced that it was setting up a specialised Digital Markets Unit to investigate the anti-competitive practices of big tech companies. It is currently looking at Amazon and Google over fake reviews on their websites, and it was reported last week that it may force Facebook to sell the gif creator Giphy which it acquired to consolidate the monopoly power of Instagram.
~~Tech firms and the high street. Competition lawyer Michelle Meagher, author of the influential book Competition is Killing Us, documents the growing power of tech platforms in grocery and food delivery sectors and explains how a CMA focused on market structure could benefit UK high streets.
~~Digital commonwealth. IPPR argues that much of the data collected by digital companies should be publicly owned, so that it can be used for general benefit. James Meadway expands on the idea of a digital commons. The city of Barcelona has been developing the idea of a digital commons in practice.
Tackling corporate power. Michelle Meagher, John Christensen and Nicholas Shaxson have launched the Balanced Economy Project to tackle monopolies and excessive concentrations of market power around the world. Recent issues of their Counterbalance newsletter have explained how the anti-competitive practices of digital platforms impact on small businesses, and where monopoly power intersects with tax havens.
Berliners vote to take corporate landlords’ property into public ownership. A popular petition calling on Berlin’s City Government to force corporate landlords (with 3,000+ apartments each) to sell their properties to the state is set to be voted on in a local referendum in September. An article by the FT suggested that the case “could set precedent for other cities with high rents”. Economist Daniela Gabor explained how housing became an asset class in Berlin and other European cities.
Green and inclusive housing policy. The Women’s Budget Group released Rethinking Housing Supply and Design, a policy paper calling for green housing plans that reverse gender inequalities and enshrine sustainable housing as a right rather than a financial asset. Recommendations include: returning land to local councils and community land trusts, including women in planning decisions and ensuring housing design is responsive to the needs of carers and diverse households. (Twitter thread summary)
Work
Beyond furlough. The TUC has called for a permanent short-time working scheme to continue to support incomes and limit job losses in times of economic crisis as a replacement to the Coronavirus Job Retention Scheme and Self Employed Income Support Scheme. (Guardian coverage and Twitter thread summary)
~~Build upon the successes. The TUC’s Kate Bell tweeted a thread pointing to evidence showing the “undoubted success” of the schemes in protecting jobs and incomes over the course of the pandemic, but called for them to be built upon to protect workers from future economic change, with an emphasis on training furloughed workers.
Legal right to disconnect. Autonomy released a paper calling for a legal “right to disconnect” amid an “epidemic of hidden overtime”. The paper outlines the evidence base and international precedents for protection from unpaid overtime and its related negative effects, and provides the legislative wording of such a law if policymakers wanted to implement it. (Guardian coverage)
How realistic is a four-day week? Frederick Harry Pitts published a critical take on the issues that may arise in trying to implement a four-day working week, concluding that “the four-day week may seem impractical in the short term. But with talk of ‘building back better’ and ‘levelling up’ backed up by a more interventionist industrial policy across the political spectrum, the medium-to-long term picture offers proponents some measure of hope”.
The case for democratic public transport. Common Wealth released a briefing explaining why restoring a vibrant local economy and thriving high streets will require reshaping the ownership and operations of bus networks. Their paper explains the history and impacts of bus privatisation and deregulation on consumers and shareholders and calls for democratic public ownership to ensure all stakeholders benefit from public transport.
Finance
ESG critique from the horse’s mouth. The FT’s Moral Money interviewed Tariq Fancy, BlackRock’s first global chief investment officer for sustainable investing turned whistleblower. Fancy argued that Environmental Social Governance (ESG) investing is a “dangerous placebo...There’s no evidence that [ESG investing] has done anything beyond - I would argue - burning time.”
The role of public banks in responding to the Covid and climate crises. UCL IIPP’s Thomas Marois published a blog post looking at the role of public banks in the response to Covid-19. The author finds that banks with clear public purpose mandates were best able to respond to crises and argues that new public banks - such as the Scottish National Investment Bank and UK National Infrastructure Bank - “must be bent to the public, not private, interest” through “fierce democratisation”.
Macroeconomics
Putting recovery in context. The UK economy grew by 2.4% in Q2 2021, slightly less than the BoE’s original forecasts. Commenting on the news, NEF explained why the upcoming cut to Universal Credit and the ending of the furlough scheme in September pose further risks to recovery and the TUC reminded readers that the UK recovery is lagging behind other OECD countries.
~~Plea for government investment. Sir Nick Stern argued that net zero cannot be achieved with an austerity mindset and joined a group of senior experts calling on the HM Treasury to invest in new technologies needed for the low carbon transition.
International cooperation and Covid-19
Climate adaptation and debt. Mohamed Nasheed, speaker of the Maldives parliament and former President and ambassador for ambition of the Climate Vulnerable Forum commented on the implications of the recent IPCC report, reminding readers that: "The untold story, and challenge, of climate adaptation lies in the economic predicament of climate-vulnerable countries who are trapped in debt."
US has legal powers to share vaccine IP. Public Citizen’s Zain Rizvi reviewed the US government's contract with Moderna and concluded that ”because Moderna learned how to commercially produce hundreds of millions of doses on the taxpayer’s dime, the government appears to have unlimited rights in the recipe for commercial-scale mRNA vaccine production.” (Twitter thread summary)
