Overview

Shifting the Overton Window

Tactics to Shift the Window

Myths

Conclusion

Endnotes

Overview

Ever since Joseph Overton, who was a scholar at the Mackinac Center for Public Policy, developed his concept of the importance of shifting the window of what is acceptable public policy, the idea has become foundational for thinking about policy change.[1] Overton argued that policymakers will not consider ideas that are outside a certain window of acceptability; and when that is the case, advocates of alternative policies must first work to change the window—either to widen it, so their view is seen as reasonable and acceptable, or to shift the entire window, so competing views unacceptable and their views are accepted. For the last decade, progressives have been engaged in a sustained and successful campaign to both shift the Overton window on antitrust—to delegitimize the accepted approach that is based on the long-established consumer welfare standard—and to win acceptance for a new one based on a so-called “public interest standard,” a core component of which is protection of competitors, especially small business.

This report discusses the new and old windows, and briefly examines a number of myths based on false assumptions and misguided inferences that progressives by and large have been able to successfully seed into policy debates.

Shifting the Overton Window

In the 1980s, the Overton window on antitrust was framed around four key principles, accepted and embraced by both liberal and conservative antitrust scholars:

1. Large firms are not inherently problematic.
2. In some cases, market power can lead to a decrease in Economic welfare; in other cases, an increase. Each case must be evaluated on its merits.
3. Antitrust should protect competition, not competitors.
4. The goal is to promote overall economic efficiency, especially consumer welfare and dynamic efficiency (innovation).

It was precisely this antitrust window that prevented progressive, self-proclaimed “neo-Brandeisians” (after the tradition of former Supreme Court Justice Louis Brandeis, who sought to hold back the rise of the early 20th century industrial economy and argued that bigness was the “mark of Cain”) from ascribing to antitrust laws inappropriate policy goals. One of these unwise goals would have been to transform antitrust enforcement so that most large firms would have been broken up, and most of those that remained would be subject to utility-style economic regulation. The insulation by antitrust laws of the “small dealers and worthy men” from the process of competition and innovation was both a detrimental objective and an historical error in the antitrust jurisprudence.[2] Fortunately, policymakers and judges moved away from Brandeis’ failed refrain and economic misconceptions, which made possible American companies’ quest for efficiency and innovation under more reasonable antitrust enforcement.

Over the last 15 years, as the centrist economics of presidents John F. Kennedy and Bill Clinton have fallen out of favor among liberal Democrats, neo-Brandeisians have resurfaced to unearth old jurisprudence commonly perceived as errors from the past, asserting that virtually all economic problems stem from one cause: large corporations. Robert Reich summed up the view when he wrote that increased concentration has “resulted in higher corporate profits, higher returns for shareholders, and higher pay for top corporate executives and Wall Street bankers—and lower pay and higher prices for most other Americans. They amount to a giant pre-distribution upward to the rich.”[3] Roosevelt Institute scholar Nell Abernathy wants antirust to “tame the corporate sector.”[4]

This has led to a proliferation of screeds against bigness: Tim Wu’s The Curse of Bigness, Matt Stoller’s Goliath: The 100 Year War Between Monopoly and Democracy, Jonathan Tepper’s The Myth of Capitalism: Monopolies and the Death of Capitalism, Zephyr Teachout’s Break ‘Em Up: Recovering our Freedom From Big Ag, Big Tech and Big Money, Barry Lynn’s Cornered: The New Monopoly Capitalism and the Economics of Destruction, and perhaps the book with the catchiest, if not the most eloquent title, Sally Hubbard’s Monopolies Suck: 7 Ways Big Corporations Rule Your Life and How to Take Back Control. It should go without saying, but these books almost all start with a description of an idealized world before the 1980s, when corporations were supposedly much smaller and everyone else much better off. A host of economic problems that have transpired since then are all blamed on the rise of both so-called monopolies and a new corrupt school of antitrust, enabled by craven antitrust scholars in the pocket of big companies. And like a three-act play, the finale involves the neo-Brandeisians arriving to save us and restore some long-lost American dream by taking the antitrust hatchet to big, bad corporations. Nice (old) narratives, terrible public policy analysis (again).

The neo-Brandeisian project is not about efficiency, innovation, consumer benefits, or American competitiveness; it is about “values.” The core value is deconcentration for the sake of it.

To be clear, the neo-Brandeisian project is not to improve the economy with antitrust. It is to limit the size and economic influence of large corporations, regardless of whether it hurts or helps the economy, competitiveness, workers, and consumers.

The neo-Brandeisian project is not about efficiency, innovation, consumer benefits, or American competitiveness; it is about “values.” The core value is deconcentration for the sake of it—almost always without tangible benefits, and with a certainty of considerable costs and stifled innovation. But again, the neo-Brandeisian project is not about making economic sense from a perceived antitrust problem; it is about achieving the populist goal of moving to an economy with many fewer large businesses. According to neo-Brandeisians, because small is beautiful, nearness trumps competitiveness, nostalgia prevails over innovation, and slogans overcome analysis. Progressives have indeed embarked on a fight for values. But it is far from certain that most Americans embrace these questionable values—and it is undoubtedly clear that American competitiveness will suffer from these unnecessary political infightings.

But progressives face a key political challenge in fulfilling their agenda to radically redistribute wealth and income in America: the U.S. Senate, or more specifically the filibuster rule. For as long as progressives must get 60 votes in the Senate to achieve their policy agenda, they know that the odds of success are quite limited, to say the least. It would be hard to turn many industries into regulated ones, or to raise the corporate income tax, or to require companies to have workers on their boards, or other long-held progressive goals, when it comes to the
corporate sector.

Therefore, they understand rightly that the executive branch is their only option for achieving their redistributionist goals, and therefore antitrust enforcement is their ideal tool of choice, as it does not depend on congressional enlightenment. The open-textured provisions of the Sherman Act could indeed allow for a shift in the interpretation of antitrust laws, only with a change of mindset in the Federal Trade Commission or the Antitrust Division of the Department of Justice (DOJ). Both antitrust authorities can be influenced at arm’s length, contrary to the institutional hurdles inherent to the passing of laws in Congress. Neo-Brandeisians act strategically, and their efforts have been successful in shifting the Overton window, as evidenced by the recent cases against large tech companies.[5]

However, these efforts have also worked, as evidenced by the current efforts of House Antitrust Subcommittee Chair David Cicilline (D-RI) and Senate Antitrust Subcommittee Chair Amy Klobuchar (D-MN) to change antitrust laws to make it easier for a Democratic administration to win antitrust cases in court. And they know, just as the muckrakers who went after Standard Oil knew, that to make progress in Congress, there needs to be a villain that voters can identify, and this case it is “big bad tech” (or more specifically, “big bad Internet companies”). First, big tech; then big business generally.

For neo-Brandeisians, just as for Brandeis himself, bigness was not a blessing in the form of more innovation, stronger international competitiveness, better jobs, and higher productivity. It was a curse keeping America from realizing its true destiny of being a social democratic country.

By aggressively going after large corporations and ideally breaking them up into smaller companies, the neo-Brandeisians would not only, in their mind, achieve a giant redistribution downward to the working class, but cripple the political power of big companies, paving the way later for their dominance of not just the House, but also the Senate.

But the neo-Brandeisians face a key challenge: the Overton window. As House antitrust staffer Lina Khan wrote in the progressive Democracy Journal, “America’s monopoly problem today largely results from a successful campaign in the late 1970s and early 1980s to change the framework of antimonopoly law.”[6] In other words, the window changed then, partly due to the rise of the influence of the Chicago school of antitrust in the 1970s, and also because of the rise of new, more quantitative and sophisticated industrial-organization scholarship, as well as changes in the structure of the U.S. economy, particularly globalization.

Observing that the window could be changed again a decade or so ago, a significant group of neo-Brandeisians began a campaign to move the previously accepted ideas to outside the Overton window and replace them with their own. But these efforts represented not only an Overton window change to new, original directions, but also a pendulum swing back to the old, disparaged policy choices and judicial errors made in the post-war era—that were fortunately given good riddance to.

Their goal was to shift the window to the following:

1. Large firms (which neo-Brandeisian activist Matt Stoller calls “Goliaths”) are inherently problematic.
2. In all cases, market power leads to a decrease in economic welfare. There is need to evaluate each case on its merits.
3. Antitrust should protect competitors, especially small businesses, in order to create a society composed of “independent yeomanry.”[7]
4. Antitrust should be guided by the “public interest” standard,[8] which is pretty much whatever progressives decide it should be, including preserving jobs, reducing income inequality, protecting small firms, addressing climate change, improving racial justice, boosting free speech, reducing corporate political power, and even improving happiness.[9]

For these neo-Brandeisians, just as for Brandeis himself, bigness was not a blessing in the form of more innovation, stronger international competitiveness, better jobs, and higher productivity (even though it brings all those things).[10] It was a curse keeping America from realizing its true destiny of being a social democratic country, with the people controlling the means of production, and most people working for small, independent businesses.[11] They argued that big companies should be broken up—and wherever that is not possible because the economic costs would be too great, they should either be regulated as a public utility or replaced with government-owned companies.

And shift the window they had to do, because under the prior window, it was hard to make the case that most big companies, including platforms, were harming consumers (the prior bottom-line standard). As neo-Brandeisian advocate K Sabeel Rahman wrote:

In contemporary antitrust regulation, however, the central question is whether concentrations of economic and market power enable extractive or unfair consumer prices. On that metric, it is hard to show how Amazon and other Internet companies use power in harmful ways. If these companies lower prices and increase access for consumers, how could they be considered dangerous?[12]

Indeed, if they had wanted to achieve their goal of rejecting 120 years of economic evolution from small farms and small shops to large enterprises, they would have had to shift the window away from economic and consumer welfare and toward something else—what they called the “public interest standard.” This would have been a shift in the window of significant proportions, considering that within the antitrust community, there was widespread and strong support for the conventional framing.

Tactics to Shift the Window

So how were the neo-Brandeisians to succeed? There were three key steps.

Step 1: Tie All Economic Problems to the Rise of “Monopoly”

It would have been hard to shift to a neo-Brandeisian Overton window had the U.S. economy performed well over the previous two decades. But after the recession of 2001, a host of economic problems—including a decline in productivity and wage growth, a slowdown of new-firm formation, and a growth in income inequality—made for a fertile field for neo-Brandeisian attacks on big business. Even though there were a host of causes behind these maladies (including the rise of China, increases in corporate short-termism, government underinvestment in the factors that drive growth, including education, and others), the neo-Brandeisians were not ones to let a crisis go to waste. Virtually any and all economic problems would now be laid at the feet of large corporations, which were now considered “monopolists.” Neo-Brandeisians did not bother so much about detailing in which markets these companies were monopolists—as long as they were repeatedly and unhesitatingly labelled as “monopolists.”

This demonstrates one way to shift the Overton window. The most vocal neo-Brandeisian institution, The Open Markets Institute, depicted market realities in a rather “gross” way in order to catch public attention. (See figure 1.) No need for nuance or analysis.

Figure 1: “A helpful chart,” tweeted by Open Markets Institute, November 19, 2020