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Episode 7: How Monopoly Capitalism Challenges American Democracy · America's Why Project

• 0:00
  SPEAKER_02: Welcome to the America's Why Podcast.
• 0:17
  SPEAKER_01: Hello, I'm your host, Matt Levinger.
• 0:20
  SPEAKER_01: I'm joined today by Matt Stoller for a conversation on the topic how monopoly capitalism challenges American democracy.
• 0:28
  SPEAKER_01: Matt is the director of research at the American Economic Liberties Project.
• 0:33
  SPEAKER_01: He's a former congressional policy advisor whose writings have helped inspire the new anti-monopoly movement in America.
• 0:40
  SPEAKER_01: He's the author of the book Goliath: The Hundred Year War Between Monopoly Power and Democracy.
• 0:46
  SPEAKER_01: And he also writes the monopoly-focused newsletter Big, which has hundreds of thousands of subscribers.
• 0:52
  SPEAKER_01: And he hosts the podcast Organized Money, which breaks down the ways monopolies control everything from the food we eat to the drugs we take, the way we communicate, and even how we date.
• 1:06
  SPEAKER_01: Matt, this is a podcast about public storytelling in America.
• 1:11
  SPEAKER_01: It's about how bad stories can lead us astray and about how better public storytelling can help us solve our hardest problems.
• 1:21
  SPEAKER_01: For many years, you've been telling a story to a growing audience of listeners and influential places about the disastrous effects of monopoly capitalism on American democracy, on the American economy, and on the well-being of the American people.
• 1:37
  SPEAKER_01: I wonder if you could start just by giving us the elevator pitch version, maybe in a way that your next door neighbor would understand.
• 1:44
  SPEAKER_00: Yeah, so the I think the easiest way to understand the problem with monopoly power in America is to go back to the inauguration of Donald Trump, who ran a campaign in 2024 talking about populism, railing against elites.
• 2:00
  SPEAKER_00: And during the inauguration, it was a really cold day.
• 2:03
  SPEAKER_00: And what he decided not to have the traditional inauguration outside, but to have it inside the Capitol.
• 2:10
  SPEAKER_00: And so his supporters, the people who kind of came to DC, voted for him, the normie supporters were in the cold, outside celebrating, but couldn't see the inauguration.
• 2:23
  SPEAKER_00: But inside, where he was actually uh inaugurated, what you had was a very a much smaller crowd.
• 2:31
  SPEAKER_00: And in that crowd were uh a couple of people who I think everybody knows.
• 2:36
  SPEAKER_00: So it was um Sindar Pichai, who's CEO of Google, you had Jeff Bezos, co-founder of Amazon, uh Mark Zuckerberg was there, you had Elon Musk, you had uh you know the people that run the most dominant companies that maybe we've ever seen in in the world.
• 2:57
  SPEAKER_00: And they were there to celebrate the inauguration of the president while the president's supporters who had voted for him were left out in the cold.
• 3:09
  SPEAKER_00: Now, in the year or so since Trump was elected, what we've seen is that image uh kind of laid out in policy.
• 3:20
  SPEAKER_00: And so essentially America has made a bet that the data center build out and AI is going to be our strategy.
• 3:31
  SPEAKER_00: If it weren't for hundreds of billions of dollars that these companies are investing, because they've captured a significant share of the profits in our economy, combined with the government support for what they're doing, we would probably not be growing or might even be in a recession.
• 3:49
  SPEAKER_00: And I think that's the story right there, which is that the the fusion of these extremely powerful, extremely large firms and the billionaires or centi billionaires, however we want to talk about them, that control them have been fused with the state in a way that is sort of beyond the control of our democracy.
• 4:12
  SPEAKER_00: That's how I'd characterize it today.
• 4:22
  SPEAKER_01: It uh is very, very different than the economic consensus of like the night late 1940s, 1950s, early 1960s that monopolies were bad, both for the American economy and for the American people.
• 4:36
  SPEAKER_01: But something changed.
• 4:38
  SPEAKER_01: Yeah.
• 4:38
  SPEAKER_00: So you can go back to the American Revolution, you can go back to the 1600s, you can go to the 1950s.
• 4:44
  SPEAKER_00: And what you will generally find is a traditional American or Anglo-American skepticism towards concentrated power, particularly concentrated financial power.
• 4:54
  SPEAKER_00: And there are two principles.
• 4:55
  SPEAKER_00: One is no one should have too much power.
• 4:58
  SPEAKER_00: There should be competition in markets.
• 5:00
  SPEAKER_00: You also see this in the political realm, checks and balances, those kinds of things.
• 5:04
  SPEAKER_00: The other is that we should try to avoid conflicts of interest if we can prevent them, right?
• 5:09
  SPEAKER_00: It's in the Bible, no man may serve two masters.
• 5:12
  SPEAKER_00: Those are the two principles that have guided a lot of political formation of the colonies and then the American state and American markets.
• 5:20
  SPEAKER_00: And what happens, I think you've seen some exceptions to this, important exceptions, but we we always kind of saw that this was the way to understand how to build a society.
• 5:31
  SPEAKER_00: In the 1970s and 80s, there was a sort of set of ideas saying that those concepts were silly, that what we should really be focused on is not concentrations of power or conflicts of interest, but efficiency, particularly like the efficiency of capital.
• 5:46
  SPEAKER_00: We should be nice to capital, because if we're nice to capital, then we will have more prosperity and more liberty.
• 5:52
  SPEAKER_00: And so there was a change in how we organize our corporations and our economy and our society.
• 5:59
  SPEAKER_00: I look at this through the lens of antitrust law, which is a specific body of law, but it occurred throughout most of the legal areas that deal with a lot of money, banking law, securities, law, bankruptcy, so on and so forth.
• 6:09
  SPEAKER_00: And so you saw an enormous roll-up of power across our markets in every part of the economy, from banking to retail to defense to technology.
• 6:19
  SPEAKER_00: And the net effect is that you have a few monopolies that are controlling much of our economy.
• 6:25
  SPEAKER_00: And in most sectors, you have one or two or three companies controlling that sector.
• 6:32
  SPEAKER_00: That's new.
• 6:33
  SPEAKER_00: We haven't had that before.
• 6:34
  SPEAKER_01: So it's a bit of a paradox, if you will.
• 6:37
  SPEAKER_01: How can monopolies thrive in a nation that claims to cherish free trade and free markets as bedrock values?
• 6:46
  SPEAKER_00: Well, I mean, it it it would it by changing the definition of freedom, really.
• 6:51
  SPEAKER_00: That's that's what happened.
• 6:53
  SPEAKER_00: So freedom used to mean free being free meant being independent of arbitrary coercion, right?
• 7:00
  SPEAKER_00: Arbitrary coercion from anyone, from a criminal gang, from a distant financier, from a monopolist, whatever.
• 7:07
  SPEAKER_00: And there were lots of different ways that we protected ourselves from strong rules or in bankruptcy to union, you know, union rights and civil rights and all sorts of things that you could do to prevent arbitrary coercion.
• 7:21
  SPEAKER_00: Uh and in the in the 70s and 80s, we said, no, actually, that's not what freedom means.
• 7:26
  SPEAKER_00: Freedom doesn't mean freedom from arbitrary coercion.
• 7:28
  SPEAKER_00: Freedom means just freedom from government restriction.
• 7:30
  SPEAKER_00: Any government restriction is a limitation on your freedom.
• 7:34
  SPEAKER_00: So if the government says you're not allowed to gamble, right, or you're not allowed to have slot machines, then that is a limit on your freedom.
• 7:41
  SPEAKER_00: But of course, a society that doesn't allow slot machines is not necessarily an unfree society.
• 7:46
  SPEAKER_00: Um just because it's a restriction doesn't mean that it's a limit on your actual ability to act in your own as a as a free citizen.
• 7:55
  SPEAKER_00: So by but by changing that definition and saying, well, we don't actually care about arbitrary coercion, that doesn't matter.
• 8:02
  SPEAKER_00: What matters is whether there's a government restriction.
• 8:05
  SPEAKER_00: It fundamentally reoriented how we see ourselves, how we see markets, how we see our society.
• 8:12
  SPEAKER_01: So what does freedom mean for you and your colleagues at your organization, the American Economic Liberties Project?
• 8:18
  SPEAKER_01: Aaron Ross Powell Well, it's a traditional American approach.
• 8:20
  SPEAKER_01: It's freedom from arbitrary coercion.
• 8:24
  SPEAKER_01: One of the things that's really, really striking to me is that if you look at the policies of staunch Republican presidents like uh like Dwight Eisenhower and even Richard Nixon, they have an instinctive distrust of monopoly power.
• 8:42
  SPEAKER_01: Is that fair to say?
• 8:44
  SPEAKER_00: Yeah.
• 8:44
  SPEAKER_00: I mean, when Dwight Eisenhower was a general in occupied Germany, he broke up I.
• 8:49
  SPEAKER_00: G.
• 8:49
  SPEAKER_00: Farben.
• 8:50
  SPEAKER_00: His his, I think his parents or grandparents were small um dry goods salespeople.
• 8:56
  SPEAKER_00: They were, they ran local stores.
• 8:59
  SPEAKER_00: Um the Nixon, you know, his his family was they were farmers.
• 9:03
  SPEAKER_00: You know, it was a there was a well-understood framework of small proprietorship being the bedrock of America.
• 9:09
  SPEAKER_00: And those small proprietors need to be needed to be protected from dominant financiers, from monopolists.
• 9:17
  SPEAKER_00: And you saw that on both sides of the aisle.
• 9:20
  SPEAKER_01: And even in the area of taxation, it's a very, very different world in the 50s and 60s than it is today, because under Eisenhower, the top marginal income tax rate was 91%.
• 9:32
  SPEAKER_01: And even under Nixon, it was 72%.
• 9:35
  SPEAKER_01: And now it's about 37%, which accounts for a lot of the reason for our national debt.
• 9:41
  SPEAKER_01: Is that right?
• 9:42
  SPEAKER_01: That's I think correct.
• 9:43
  SPEAKER_00: I mean, what you what you've broadly seen is that in uh I think from really from the 30s, I mean you could go back many years earlier, too.
• 9:53
  SPEAKER_00: I think the New Deal is is our modern framework, but the New Deal built on what was there before.
• 9:59
  SPEAKER_00: There was essentially a tax on capital.
• 10:02
  SPEAKER_00: And what we said is capital needs a fair return, so does labor.
• 10:07
  SPEAKER_00: And if if either of them get out of whack, we have a problem.
• 10:12
  SPEAKER_00: But fundamentally, labor is more important than capital.
• 10:15
  SPEAKER_00: That was, you know, Abraham Lincoln said that, Teddy Roosevelt said that.
• 10:18
  SPEAKER_00: That was a general view of how America works.
• 10:21
  SPEAKER_00: A very important old phrase is the fruits of your labor.
• 10:24
  SPEAKER_00: We should be able to have control and gain the fruits of our own labor.
• 10:29
  SPEAKER_00: And I think that that, you know, you can look at the tax rates, there's lots of loopholes and various other things.
• 10:34
  SPEAKER_00: But the basic premise is look, we need to make sure that there's not that capital is not getting an unreasonably high return.
• 10:40
  SPEAKER_00: Because if capital is getting an unfairly high return, then they're being extractive in some form or fashion, either extracting too much from labor, or they're taking too much from consumers, or they're engaged in some sort of behavior that's, you know, consuming too much from the community.
• 10:55
  SPEAKER_00: And so we need to prevent that.
• 10:56
  SPEAKER_00: And that's what those tax rates really represented.
• 10:58
  SPEAKER_00: And then the fact that we effectively don't tax capital today, because we want much higher returns on capital and unfairly high returns means that we have a very extractive society.
• 11:11
  SPEAKER_01: So it seems to me, if we want to sum up what we've talked about so far, America moves in the late 1940s, 1950s, early 1960s from a kind of bipartisan consensus that monopolies, monopolies are bad for the economy and bad for the American Republic, to a new consensus that bigger is better and monopolies may be our friends.
• 11:35
  SPEAKER_01: Is that fair to say?
• 11:36
  SPEAKER_01: I think that's fair.
• 11:37
  SPEAKER_00: I mean, what what you you know what you have is a view like I think it's the economists really imported this view into the mainstream of American culture.
• 11:46
  SPEAKER_00: In fact, you can trace the, I think, rise of monopolies with the dominance of economists in our discourse.
• 11:53
  SPEAKER_00: Their view is that bigness is not a result of um illicit behavior or sketchy behavior or extractive behavior.
• 12:03
  SPEAKER_00: Bigness is a result of just being better at something.
• 12:05
  SPEAKER_00: Google is big and and everybody uses it not because it engages in contractual terms that exclude or pay off rivals, but because they're just a really good search engine.
• 12:15
  SPEAKER_00: And so we we we should want bigness, right?
• 12:17
  SPEAKER_00: And that was the intellectual change that happened.
• 12:20
  SPEAKER_00: So bigness is now seen, or at least I don't know that I don't think normal Americans think this way, but I think in the policy world and among, you know, sort of the upper strata that that controls a lot of our discourse, yeah, they think bigness is good.
• 12:33
  SPEAKER_00: Bigness is efficient.
• 12:35
  SPEAKER_01: So you get kind of a new bipartisan consensus by economists on the right and economists on the left, or the center left anyway, that efficiency is more important than free markets.
• 12:51
  SPEAKER_01: And that this is gonna generate wealth for the people who matter.
• 12:56
  SPEAKER_00: Yeah, I think that's right.
• 12:57
  SPEAKER_00: I mean, yeah, you the the the idea of economists is that we have to speak in a very um in terms that make a lot of assumptions about human beings.
• 13:09
  SPEAKER_00: Um that like humans are rational actors, that you know, capital, high return on capital shows increasing productivity, not extraction.
• 13:20
  SPEAKER_00: And and those those view, you know, conflicts of interest really are not uh are not significant.
• 13:27
  SPEAKER_00: They usually are competed away.
• 13:28
  SPEAKER_00: There's lots of assumptions that are baked into the way that we think about policy that I think we can all acknowledge are not true, but we still make policy along those lines.
• 13:40
  SPEAKER_01: So when you come and talk in my executive education classes, you cite a couple of examples.
• 13:46
  SPEAKER_01: One is very close to the concerns of the military officials who who are the participants in my classes, and that's the defense industrial base.
• 13:55
  SPEAKER_01: So what what happens there?
• 13:57
  SPEAKER_00: Well, I mean, you know, there there's um I think one of the one of the big problems that we've had in the last, I don't know, year or so are rare earth magnets.
• 14:09
  SPEAKER_00: Right?
• 14:09
  SPEAKER_00: Rare earth magnets are these, you know, they're they're they're made, they're not they're made out of elements.
• 14:14
  SPEAKER_00: They're not actually rare, but are just hard to a little bit hard to process.
• 14:18
  SPEAKER_00: And they are forms of magnet.
• 14:21
  SPEAKER_00: They're magnets that go into things like engines or satellites or electronics.
• 14:27
  SPEAKER_00: And they're not, we don't, they're not actually, it's not a big industry.
• 14:30
  SPEAKER_00: It's maybe it's a billion dollars or something like that.
• 14:31
  SPEAKER_00: But they go into everything.
• 14:33
  SPEAKER_00: And the US used invented the rare earth magnet, but the Chinese bought our rare earth magnet producers in the in the 90s, and they closed down all our rare earth magnet facilities and started to, they monopolized it in China.
• 14:51
  SPEAKER_00: And at any time the US tried in the last, I don't know, 20 years, 30 years, tried to re-enter the business.
• 14:58
  SPEAKER_00: What the Chinese producers did, who are now essentially state-owned or state directed, is they lowered the price of rare earth magnets to make it not viable for us to produce our our own.
• 15:07
  SPEAKER_00: Okay, so you know, and an economist said, first of all, if China is subsidizing rare earth magnet production, cool, we'll take it.
• 15:16
  SPEAKER_00: We like getting these cheaper rare earth magnets.
• 15:18
  SPEAKER_00: That's a good thing.
• 15:20
  SPEAKER_00: Second of all, it's not a very big industry, so what does it really matter?
• 15:22
  SPEAKER_00: Who cares?
• 15:24
  SPEAKER_00: And so then you fast forward, and then we have these negotiations with China, and China says, you know what?
• 15:31
  SPEAKER_00: We're gonna cut off your rare earth magnet supply.
• 15:34
  SPEAKER_00: And that rare earth magnets go into everything, the auto industry, the missiles, whatever.
• 15:39
  SPEAKER_00: And so all of a sudden, all of these companies, trillions of dollars of economic activity, these companies go to the government and they say, uh, we need rare earth magnets from China.
• 15:49
  SPEAKER_00: So you better not, you better do whatever China wants.
• 15:52
  SPEAKER_00: And now there's like a um uh, you know, a lot of investment going into rare earth magnet production and whatnot.
• 15:57
  SPEAKER_00: But no economist sort of had uh even a language to talk about the risk that this, what monetarily is a very small industry, presented, even though it's actually a really important industry because it's the foundation of a bunch of other stuff.
• 16:11
  SPEAKER_00: And I think what you see in general is that's the kind of thinking, of poor thinking that we see in terms of policy production.
• 16:20
  SPEAKER_00: Now, we can get into some of the in you know, national security problems that have to do with the fact that we have monopolies like Boeing that are terrible at what they do, that are now running our defense um complex.
• 16:33
  SPEAKER_00: And and it didn't didn't used to be that way, but that is the way it is today.
• 16:37
  SPEAKER_00: Um, but in general, what you see is that the the basic flaw where where economists just don't look at risk.
• 16:45
  SPEAKER_00: They don't look at risk, they don't look at things they can't measure.
• 16:48
  SPEAKER_00: And that is how we organize our society today.
• 16:51
  SPEAKER_00: And it is why people are so mad and they feel like there's so little common sense in how we do anything.
• 16:57
  SPEAKER_00: Let's take another example, baby formula.
• 16:59
  SPEAKER_00: So that's a good one.
• 17:00
  SPEAKER_00: I mean, that one, you have a problem like um you call this problem power buyers.
• 17:07
  SPEAKER_00: Okay.
• 17:08
  SPEAKER_00: So in in an economy, what you want is a lot of buyers and a lot of sellers.
• 17:12
  SPEAKER_00: Now, typically, when people think about a monopoly, they think, oh, well, if you're a monopolist on steel, you sell steel.
• 17:17
  SPEAKER_00: And since you're the only producer of steel, you can raise the price if you want to, or you can reduce the quality, and that's a problem.
• 17:23
  SPEAKER_00: But there also can be monopolies on the buying side.
• 17:26
  SPEAKER_00: In in the baby formula market, it's actually the U.S.
• 17:29
  SPEAKER_00: government that is the biggest buyer of baby formula through the WIC program, which funds baby formula for um for poor and lower, lower uh middle class women.
• 17:40
  SPEAKER_00: And the way that that formula program is structured, it's they essentially hand out monopolies in every state.
• 17:47
  SPEAKER_00: So every state buys from essentially one baby formula producers.
• 17:52
  SPEAKER_00: And so the net effect is you only had three producers of baby formula in America.
• 17:58
  SPEAKER_00: And so when one of them had uh serious problems in its in one of its um baby formula plants, you all of a sudden had a dramatic shortage of baby formula.
• 18:10
  SPEAKER_00: And so um what should have happened is we should we shouldn't have uh a power buyer of the US government that creates these monopoly situations.
• 18:20
  SPEAKER_00: What we should have is a the government that says, okay, we're gonna buy from a diverse set of sources.
• 18:25
  SPEAKER_00: And so if one of them goes down, you have uh some redundancy.
• 18:29
  SPEAKER_00: But that isn't in fact the way that we did it.
• 18:31
  SPEAKER_00: And it's not like we've reformed the WIC program.
• 18:34
  SPEAKER_00: Um we didn't fix it.
• 18:36
  SPEAKER_00: The baby formula dynamic is a little bit unusual because it's directly the government that is the power buyer, but you see power buyers everywhere.
• 18:44
  SPEAKER_01: You also say that monopolies affect the way we date.
• 18:47
  SPEAKER_01: Can you talk about that?
• 18:49
  SPEAKER_00: Well, I mean, you you have um Barry Diller who um rolled up most of the, I think it was the match group, they bought up most of the dating services and have changed pricing.
• 19:03
  SPEAKER_00: And so most people date today through online dating, and so they're going essentially through one company to mediate those dating choices, to price those dating choices.
• 19:14
  SPEAKER_00: I mean, not pricing the dates, obviously, but pricing how people meet.
• 19:19
  SPEAKER_00: And I think that it's something that, you know, uh it's a little weird, honestly.
• 19:25
  SPEAKER_00: It's it's kind of a strange thing that our culture is now so you know intermediated with um with with one company, with the match group for how we um choose romantic partners.
• 19:38
  SPEAKER_01: So you you've talked a lot about how to how monopolies negatively affect the economy and affect the real well-being of the American people.
• 19:45
  SPEAKER_01: How does it hurt democracy?
• 19:49
  SPEAKER_00: Well, I mean, there's a couple of ways.
• 19:50
  SPEAKER_00: You know, one is there's direct lobbying power, which we all know about.
• 19:55
  SPEAKER_00: I mean, for a really long time, I think most people have wanted to see a strong privacy law.
• 20:01
  SPEAKER_00: We don't have one.
• 20:02
  SPEAKER_00: And we don't have one because the the big tech companies prevent it.
• 20:06
  SPEAKER_00: People want to see all sorts of different rules that constrain uh large financial institutions.
• 20:14
  SPEAKER_00: We don't have them.
• 20:16
  SPEAKER_00: Um, we don't we're unable to actually pass very simple laws, like laws that would restrain something that everybody agrees are are a problem, which are pharmaceutical benefit managers who are these middlemen in the pharmaceutical system that are unhelpful in all sorts of ways.
• 20:32
  SPEAKER_00: We're unable to pass laws to restrain them.
• 20:35
  SPEAKER_00: I think there's a general view in America, and it's an accurate view, that Congress just doesn't do very much.
• 20:41
  SPEAKER_00: Um, that Congress, unless the the wealthy need a bailout or some sort of war, is is essentially non-functional.
• 20:49
  SPEAKER_00: And that's because monopolists have found ways of essentially creating veto choke points on anything that that um that Congress might want to do.
• 20:59
  SPEAKER_00: That partly it's a campaign finance system problem that has you know that in itself privileges those with a lot of capital.
• 21:07
  SPEAKER_00: But the other part of it, which I think is more interesting when you're talking about monopolies, is not just that they're big companies with a lot of money and influence in funding think tanks and whatnot.
• 21:17
  SPEAKER_00: It's also that they now are direct infrastructure.
• 21:21
  SPEAKER_00: So if you're running an election, right, do you care more about the rules imposed by the Federal Election Commission, or do you care more about the rules imposed by Facebook, right?
• 21:34
  SPEAKER_00: Or Meta.
• 21:35
  SPEAKER_00: I think you care more about the rules imposed by Meta, because that those rules determine how you can communicate with voters, whereas the FEC rules are not that important.
• 21:46
  SPEAKER_00: And I think you see that kind of across the board, that that core infrastructure about how we interact as a society, how we communicate, how we sell things to each other, um, how we do politics, how we transmit ideas are Now mediated by these monopolists.
• 22:03
  SPEAKER_00: And so they are direct provisioners of governing services.
• 22:07
  SPEAKER_00: We don't necessarily see them that way, but that is actually what's happening.
• 22:13
  SPEAKER_01: We started out this conversation with your elevator pitch on what's wrong with monopoly power.
• 22:19
  SPEAKER_01: Right.
• 22:20
  SPEAKER_01: Let's move on to your elevator pitch on what needs to be done differently.
• 22:23
  SPEAKER_01: Sure.
• 22:25
  SPEAKER_00: Well, I think that there's uh I I mean I could I could go into the policy and say, well, when you break up monopolies across the board, there are actually a lot of really interesting things going on to do that.
• 22:37
  SPEAKER_00: Like, for example, uh, I just wrote this up, but there's a there's a big trial going on in North Carolina between a NASCAR, which is a monopolist in stock premier stock car racing, and of all people, one of the owners of the NASCAR teams who is the NBA legend Michael Jordan.
• 22:55
  SPEAKER_00: And it's this fascinating case where um, you know, Michael Jordan is suing NASCAR and saying, you know, the way that you control premier stock car racing, prevent competition has all sorts of implications.
• 23:09
  SPEAKER_00: And it's a jury trial.
• 23:12
  SPEAKER_00: If Jordan wins, then NASCAR is gonna have to allow more competition.
• 23:18
  SPEAKER_00: It might even get broken up.
• 23:19
  SPEAKER_00: They might have to sell off racetracks.
• 23:21
  SPEAKER_00: And what you'll see is a healthier, better sport um of of um of uh stock car racing.
• 23:29
  SPEAKER_00: It's not the core problem in democracy, but you know, the family that controls NASCAR is worth$6 billion.
• 23:34
  SPEAKER_00: They're very politically influential.
• 23:35
  SPEAKER_00: NASCAR is something a lot of people enjoy.
• 23:37
  SPEAKER_00: It's part of American culture.
• 23:39
  SPEAKER_00: It's gotten less popular over time as it's been run poorly.
• 23:42
  SPEAKER_00: So you will see a reinvigoration of stock car racing if um if this case, you know, if Jordan wins, or maybe even if he doesn't.
• 23:51
  SPEAKER_00: I mean, like the trial itself is having really significant impacts on the sport.
• 23:55
  SPEAKER_00: I bring that up not just because it's on my mind, but because it's the kind of thing that that's the the way you think about how you create a free society is not distinct from the way you think about how do we have a better, more free stock car racing circuit.
• 24:12
  SPEAKER_00: We have thousands of things like NASCAR in this country, and every single one of them has its own politics.
• 24:21
  SPEAKER_00: And when you have a monopoly, you know, people talk about in NASCAR, they talked about the France family as the dictators of NASCAR.
• 24:28
  SPEAKER_00: They used a political term about an authoritarian running that sport.
• 24:33
  SPEAKER_00: If you have enough parts of America in terms of industries where you have dictators running them, people get used to authoritarianism.
• 24:41
  SPEAKER_00: And then it doesn't seem that weird to have authoritarianism in the political sector.
• 24:46
  SPEAKER_00: And so I think that like when one of the things you saw is when Doge was laying people off in government and people were, you know, you you saw this reaction of people saying, well, you know what?
• 24:56
  SPEAKER_00: I got laid off, so screw them, right?
• 24:59
  SPEAKER_00: Or why do they deserve protections?
• 25:01
  SPEAKER_00: Like we don't have protections or whatever it is.
• 25:02
  SPEAKER_00: And it what that was is it was people who said, Well, I don't have the rights of a free person.
• 25:09
  SPEAKER_00: Why should other people in my society have the rights of a free person?
• 25:12
  SPEAKER_00: Why should they have any redress?
• 25:15
  SPEAKER_00: And I think that that is a a serious problem.
• 25:18
  SPEAKER_00: But when you look at it from the other side and you say, well, Michael Jordan, or you could look at there's lots of antitrust cases like this going on, is fighting for, advocating for liberty through competition and and open markets.
• 25:31
  SPEAKER_00: And you could start saying, well, you know what?
• 25:32
  SPEAKER_00: If the guys in NASCAR can do this, or the guys in other, you know, areas, you know, I can, there's healthcare IT, there's lots of other much more boring sectors where this is happening.
• 25:41
  SPEAKER_00: Why can't we get freedom in this other area?
• 25:43
  SPEAKER_00: Right.
• 25:44
  SPEAKER_00: And I think that's what's what, you know, uh Daniel Iceberg, you know, he had this good quote, said, courage is contagious.
• 25:51
  SPEAKER_00: And that is true, right?
• 25:52
  SPEAKER_00: Like I think people get used to bad things happening.
• 25:56
  SPEAKER_00: Mostly in my life, I've seen bad political decisions.
• 25:58
  SPEAKER_00: I think that's kind of the I'm not, I'm not a young man.
• 26:01
  SPEAKER_00: Um, it it is it has been a grim period, I think, in American history.
• 26:06
  SPEAKER_00: But that that can be reversed.
• 26:09
  SPEAKER_00: And if we do see some changes that are that are positive, even small changes, things that people notice and realize, then I think you what you will see, we do live in a democracy.
• 26:20
  SPEAKER_00: I mean, this this really is a democratic country.
• 26:22
  SPEAKER_00: And if you can overcome that cynicism and that sense, oh, there's nothing can be done, we can't have nice things, then you really could have uh this this simmering rage that we've been seeing since um 2006, really.
• 26:35
  SPEAKER_00: You will see an explosion of innovation and freedom and creativity.
• 26:40
  SPEAKER_00: And and that that's what we've seen throughout American history.
• 26:43
  SPEAKER_00: We saw it in the New Deal, we've seen it in uh, you know, other areas in the in the the post-Civil War era and lots of other you know periods in American history when we we can kind of break through this sort of Soviet stagnation.
• 26:54
  SPEAKER_00: It's really cool what we can create.
• 26:56
  SPEAKER_01: So there's a real possibility both for economic and for democratic renewal.
• 27:02
  SPEAKER_01: Aaron Powell Absolutely.
• 27:03
  SPEAKER_00: I mean, if you just think about it, like, all right, so we have all of these, take like a privacy law, right?
• 27:08
  SPEAKER_00: There's there's a billion things that people want to see Congress pass.
• 27:11
  SPEAKER_00: That and I'm not talking about things that are controversial, but things that people all agree on.
• 27:16
  SPEAKER_00: And if you could push the veto checks out of the way for a second and you could just pass some of these laws, you would see just this explosion of um, you know, of creativity and value.
• 27:32
  SPEAKER_00: And uh I mean, there's not either it's funny, there's not people the word disillusion doesn't actually have a um, there's no word that means the opposite of disillusion.
• 27:40
  SPEAKER_00: So, but I I say reillusionment, right?
• 27:43
  SPEAKER_00: That that's what we will see, right?
• 27:44
  SPEAKER_00: If you can do something real that actually helps people in a in a profound way and takes away power from the distant financiers um and and gives it back to ordinary people, I think you will see this kind of incredible moment where Americans will say, wait a second, you can you can do that?
• 28:03
  SPEAKER_00: Why don't we do this other thing?
• 28:04
  SPEAKER_00: Why don't we do this other thing?
• 28:05
  SPEAKER_00: Why don't we do that other thing?
• 28:06
  SPEAKER_00: And you know, I really have faith in people.
• 28:09
  SPEAKER_00: Um and I and I feel like when they see, oh, there's a thing you can do that's creative in this way, they they will want to do that.
• 28:17
  SPEAKER_00: Right now, the what people see are scams and fraud and and various kind of silly, silly things with AI or whatever.
• 28:23
  SPEAKER_00: And and so that's what they know and that's what they think is possible, and for rational reasons.
• 28:27
  SPEAKER_00: But if they start to see that um that actually creating a good society, innovating around that is possible, they will do that.
• 28:36
  SPEAKER_01: Matt, one of the things I love about your work is that you take this very technical, dry policy issue and you invigorate it.
• 28:47
  SPEAKER_01: You you tell a great story that's also highly informed in terms of the subtleties of the policy changes that need to be made.
• 28:55
  SPEAKER_01: And so as we wrap up our time together, I'd like to ask you a couple of questions.
• 29:00
  SPEAKER_01: Uh number one, on the policy side, what are the one or two policy innovations that we desperately need?
• 29:10
  SPEAKER_01: And number two, kind of building on what you've just been talking about, what's the story that you tell that's a better story about the economy that'll help us move forward together?
• 29:23
  SPEAKER_00: Okay, so let's start with the one or two policy innovations.
• 29:27
  SPEAKER_00: All right.
• 29:27
  SPEAKER_00: I think if I were to take one policy innovation, uh innovation, it's just something we've always known.
• 29:33
  SPEAKER_00: But one policy that that that would be that would reinvigorate our economy, it would be saying that um you can't really have price discrimination that that is designed in an unfair way.
• 29:50
  SPEAKER_00: Right.
• 29:50
  SPEAKER_00: So price discrimination means charging two different people different prices for the same thing.
• 29:56
  SPEAKER_00: And there are some times when we acknowledge that's fine.
• 29:59
  SPEAKER_00: Like if you go to the movies and you say, all right, seniors get a discount and students get a discount and military people get a discount, that's fine that's fine because it's known classes, the the prices are posted in public.
• 30:12
  SPEAKER_00: Um but in many areas of our economy, like healthcare or take healthcare, you know, a knee surgery depending on your your insurance company, depending on the the hospital, depending on the specific plan, your your co-insurance rates are co-deductible, blah, blah, blah.
• 30:35
  SPEAKER_00: That that a knee surgery can have a hundred different prices for the same thing.
• 30:40
  SPEAKER_00: You could be sitting in a bed next to somebody else who got the same knee surgery, and yours could be 50 times as much.
• 30:46
  SPEAKER_00: Uh a single pill could have 4,000 different prices, depending on any any number of factors.
• 30:54
  SPEAKER_00: And what that does is it makes it so that um, you know, we don't really have a a public anymore that can that can understand what we're paying for things.
• 31:05
  SPEAKER_00: You don't have, you know, if if a if a product can have many different prices, it's really hard for somebody to want to come into the market and say, well, I can underprice because what are you underpricing?
• 31:17
  SPEAKER_00: You don't know what it costs.
• 31:19
  SPEAKER_00: Um it makes it really hard for you to go to your friend and say, Oh, is this a good deal or not?
• 31:25
  SPEAKER_00: Because you're getting, maybe you're getting a different price than someone else.
• 31:29
  SPEAKER_00: And it allows for companies to monopolize really easily because they can they can go in and they can underprice and underprice selectively where they know there's competition and then other areas they can they can raise prices.
• 31:41
  SPEAKER_00: And that's what we see in all sorts of, you know, in all sorts of places.
• 31:45
  SPEAKER_00: Like really good example is um the monopoly game at McDonald's, right?
• 31:50
  SPEAKER_00: Which when I was a kid, you know, you got like a monopoly scratch off or whatever, and you monopoly piece, and you could maybe get an extra burger occasionally.
• 31:56
  SPEAKER_00: Today it's you have to download an app and it's very complicated.
• 32:00
  SPEAKER_00: And actually what they use, they use it in a way that essentially says if you go to McDonald's a lot, they will give you fewer discounts versus if you don't go to McDonald's very often, they'll give you more discounts.
• 32:11
  SPEAKER_00: They actually use it to charge, to find ways of charging you more, the maximum amount that you will bear.
• 32:16
  SPEAKER_00: All of these things are, I think, really problematic for a free society.
• 32:21
  SPEAKER_00: So if you just said, you know what, you have to charge the price is the price, right?
• 32:26
  SPEAKER_00: You can you can have a high price or a low price, whatever price you want, but you have to charge that price for that thing or serve or service, and you can't charge a different price to someone else for the same item or service.
• 32:39
  SPEAKER_00: I think that would go a long way towards ending all of these really corrupt pricing games and um and and and get business people focused on making better products and services versus what they have to do now, which is find ways of essentially deceiving people and cheating people and extracting people extracting through price.
• 32:59
  SPEAKER_00: So that's the what that's if I could if I had one sh one policy I could implement, it would be that.
• 33:04
  SPEAKER_00: Um it would also like reduce consolidation, have all sorts of good impacts.
• 33:09
  SPEAKER_00: So what's the better story that you can tell?
• 33:11
  SPEAKER_00: Okay, so I uh forget who what her name was, but the person who invented the um I think it was the laundry machine or maybe it was the dishwasher.
• 33:20
  SPEAKER_00: It was a woman who she was a housewife and she figured out, oh, you can, you know, she's you know mechanically inclined, and she invented I think it was the laundry map, the laundry machine and um or the clothes washer.
• 33:36
  SPEAKER_00: And it, you know, did really well, right?
• 33:41
  SPEAKER_00: Invented it.
• 33:42
  SPEAKER_00: Um because it was solved in a a clear problem that she had.
• 33:45
  SPEAKER_00: She was mechanically inclined.
• 33:47
  SPEAKER_00: There was the machine tool shops around that she could use and started a company, and it it was good for uh it was good for Americans.
• 33:57
  SPEAKER_00: It helped them wash their clothes much more efficiently.
• 34:00
  SPEAKER_00: The drudgery of that work was allayed.
• 34:04
  SPEAKER_00: Good story.
• 34:06
  SPEAKER_00: And you see, that's how a lot of innovation used to work.
• 34:08
  SPEAKER_00: It would be someone who was not like in the quote unquote tech industry.
• 34:13
  SPEAKER_00: They were just a person with a problem that they knew fig could figure out how to how to solve, and then they solved it, right?
• 34:20
  SPEAKER_00: And it happened everywhere.
• 34:21
  SPEAKER_00: It wasn't in Silicon Valley, it was like all over the country.
• 34:24
  SPEAKER_00: There were people solving problems for whatever the problem they were dealing with.
• 34:28
  SPEAKER_00: Um so so that's a form of innovation that where it's the it's just people figuring out how to use their liberty and some capital and some um some of the some of the um industrial capacity lying around to make the world better, to make their world better, to make a little bit of money, to make America better.
• 34:54
  SPEAKER_00: And that's a story I like because it's a story about ordinary people, you know, working through institutions to live with each other and and in in peace and harmony and prosperity.
• 35:10
  SPEAKER_00: I think a different story, the one we have today, if you look at generative AI, it we're putting, I don't know what, four or five hundred billion dollars into data centers by companies that have, I don't know, 15, 20, 30 percent.
• 35:23
  SPEAKER_00: It's five to six companies that have 15 to 20 to 30 percent of the profits in the economy.
• 35:28
  SPEAKER_00: And they've just said, this is what we're doing now.
• 35:31
  SPEAKER_00: Like it or not, we're all gonna be using Chat GPT to do our whatever we do.
• 35:37
  SPEAKER_00: And so we're building data centers everywhere, and they're saying, well, we're gonna take your electricity and we're gonna take your water, but don't worry, we'll also find a way to lay half of you off.
• 35:48
  SPEAKER_00: Right.
• 35:49
  SPEAKER_00: And that's a form, and and none of it, we don't know if any of it's even gonna be effective for for what we're trying to do.
• 35:56
  SPEAKER_00: I mean, we see a lot of companies that are laying people off and saying it's AI, but we don't really know why they're doing it.
• 36:03
  SPEAKER_00: They could just be laying company people off because they are laying people off.
• 36:06
  SPEAKER_00: Um, we know that AI can be useful for certain things like customer service, but this idea that we innovate by just saying, well, these five guys have a ton of money because they happen to have old monopolies in of software advertising, and they've decided that this is the direction we're going.
• 36:22
  SPEAKER_00: And the government has said, yeah, that's the direction we're going.
• 36:24
  SPEAKER_00: And therefore, everybody has to figure out how to use Chat GPT to improve their soccer team or whatever it is.
• 36:31
  SPEAKER_00: That's a strange way to do innovation.
• 36:33
  SPEAKER_00: And that is the way that we are doing innovation and development, national development.
• 36:39
  SPEAKER_00: And it's based on the idea that bigness is good and the efficiency of capital is what matters, and therefore it leads us to this extremely strange um world where we're in this bubble of AI that everybody hates and is very weird and might turn out to be like have some useful applications, but it's really strange.
• 37:00
  SPEAKER_00: This is such a strange moment.
• 37:02
  SPEAKER_00: And I think it just reflects the fact that the story of how we do our economy has really and our society has really gotten away from the people themselves.
• 37:13
  SPEAKER_00: And that's why we're in this just really weird moment.
• 37:16
  SPEAKER_01: So your whole effort is to bring the economy and bring the democracy back to the people.
• 37:21
  SPEAKER_00: Yeah.
• 37:21
  SPEAKER_00: I mean, we've had this very strange kind of centralized Sovietized system that's controlled by five guys in Silicon Valley.
• 37:28
  SPEAKER_00: And I just think that that's too much power.
• 37:31
  SPEAKER_00: It's used poorly, it's gonna, it's causing all sorts of problems, both you know, for ordinary people, but national security issues as well.
• 37:40
  SPEAKER_00: And we should just get away from that.
• 37:41
  SPEAKER_00: And if we got away from that, back to our traditional, let's let, you know, ordinary people do, you know, have be free in terms of being free from arbitrary coercion and then allowed to cooperate with each other to build things, we would have a much happier and prosperous society.
• 37:59
  SPEAKER_01: Before we close, any anything else you'd like to share with our listeners.
• 38:05
  SPEAKER_00: I think um just in general, you know, the anti-monopoly tradition, it it is our um it is an American tradition.
• 38:13
  SPEAKER_00: It is it is our our tradition.
• 38:15
  SPEAKER_00: You know, there's this view, you know, I come out of the left, and there's this view on the left that, you know, the left tradition is to have a big government, um, big unions, and that that that that is was how we created equality, and also that American capitalism, capitalism in general, is an unfair system, and that America has always been based on inequality.
• 38:40
  SPEAKER_00: And so if we want more equality, we should move to a kind of a more European model with more social welfare, a bigger government.
• 38:47
  SPEAKER_00: And what I've found is that that really overlooks the anti-monopoly tradition in America, which really was and is a radical vision of human freedom and liberty, and has a baked in it a um a view that people should be equal.
• 39:10
  SPEAKER_00: People are equal.
• 39:12
  SPEAKER_00: And that is an economic, that is economic.
• 39:16
  SPEAKER_00: It is also political.
• 39:17
  SPEAKER_00: So William Finley was a revolutionary era congressman, said wealth in many hands is many checks.
• 39:23
  SPEAKER_00: And what he meant was you need to have everyone have a little bit of property to prevent corruption in a society or to limit corruption in a society.
• 39:31
  SPEAKER_00: And I think that's always been true.
• 39:33
  SPEAKER_00: We saw that as the Jeffersonian, you know, yeoman farmer thing.
• 39:36
  SPEAKER_00: It's how we organize the Northwest Territories, it's how we organize the New Deal.
• 39:41
  SPEAKER_00: It's it is part of who we are as a people.
• 39:44
  SPEAKER_00: I mean, I mentioned the monopoly game at McDonald's, the monopoly game, monopoly, the board game has anti- actually has anti-monopoly roots.
• 39:52
  SPEAKER_00: There's all sorts of things that are in America that are that are based on the anti-monopoly tradition, and that is a a vision of radical equality.
• 40:01
  SPEAKER_00: And so we should remember that and we should own that, and we should accept that that is our heritage.
• 40:07
  SPEAKER_00: And and as we move forward as citizens, you know, that it is a very, very strong, very powerful tradition.
• 40:15
  SPEAKER_00: And I I've I've been felt empowered by it, and I hope other people do as well.
• 40:20
  SPEAKER_01: Matt Stoller, thanks for your time.
• 40:22
  SPEAKER_01: It's been truly an honor and a pleasure to talk with you today.
• 40:26
  SPEAKER_01: I've learned a tremendous amount, and I'm sure your our listeners will be equally grateful for your insights.
• 40:32
  SPEAKER_01: Hey, thanks a lot.
• 40:32
  SPEAKER_01: Thanks for having me.
• 40:35
  SPEAKER_02: You're listening to the America's Why Podcast.
• 40:37
  SPEAKER_02: Our music is by James Fernando.
• 40:40
  SPEAKER_02: For more information and to join the conversation, please visit our website at America's Why Project.com.
• 40:46
  SPEAKER_02: See you next week.