The ideological certitude with which FTC Commissioner Lina Khan explains her latest investigation of Microsoft is revealing of the zeitgeist of our time. Interviewed by the Wall Street Journal, she explains that Microsoft may have violated antitrust law–or rather policy and politics, because it is not properly law–by consensually hiring the co-founder of startup Inflection AI and almost all its staff, and compensating the ongoing concern with a licensing fee. Watch the video accompanying the story “FTC Opens Antitrust Probe of Microsoft AI Deal,” June 6, 2024. It is with the most reasonable political correctness that Ms. Khan declares:
In Washington, there is increasingly a recognition that we can’t as a government just be totally hands-off and stand out of the way.
I wonder at what fleeting moment the young law professor nominated by Joe Biden thinks the federal government was “totally hands-off” and “out of the way.” It would be interesting to know what evidence she has to support her contention.
She also says:
You’re right that in some ways this is going to look different. … And we as policymakers and we as a society can help make decisions and choices that are going to steer the technologies on a path that actually serves us rather than a model where a handful of companies are just extracting more and more from society, from creators, and people feel they don’t have recourse.
Who are “we as policymakers” and “we as a society”? Are the two political “we” the same? Don’t “we as policymakers” represent at best 50% +1 of the “we as a society”? And that is the best case. I suspect that our Washington political bureaucrat hasn’t reflected much on these issues and entertains an intuitive and naïve conception of democracy. Twentieth-century welfare economics and social-choice theory, often developed by economists who, like Ms. Khan, had a sweet tooth for economic and social planning, showed that “we as a society” raises problems of preference aggregation that can only be solved by authoritarianism—“dictatorship,” in the terms Kenneth Arrow’s famous theorem. Only a society of identical individuals can be imagined as saying “we” (through our collective mouth). James Buchanan and public-choice economics added a realistic view of “we as policymakers” and a more sensible view of democracy.
In reality, Ms. Khan’s “we as policymakers” hides an authoritarian desire to control society:
At the FTC … we are scrutinizing the entire stack, from the chip, to the computing cloud, to the models, to the apps. … The raw material for a lot of these tools is in the hands of a very small number of companies. … There could be self-dealing, there could be discrimination, there could be exclusion, so that the big guys are just getting bigger at the expense of everybody else.
Ms. Khan seems to unknowingly admit that her crusade is part of a general ideology of social engineering from above.
Could it be that Microsoft and Inflection structured their deal so that it did not fall foul of what the surveillance state does not like? That is certainly a possibility. It is a scary possibility, but not in the way Khan seems to imagine. The rule of law does not consist in a majoritarian government using a wide and expanding complex of laws and regulations to prevent anything “we as policymakers” do not like and mandate anything that “we as policymakers” want. Such a conception of government represents a “government of men” (OK, make it “of persons”), not a “government of laws.” With the proliferation of laws and regulations, there must now exist at least one legal instrument for every potential power grab. Refusing to see this suggests a disregard of both the economic-scientific study of society and the modern conception of liberty, in favor of an unexamined and dangerous predilection for collective choices over individual choices.
As an instinctive adherent to majoritarian democracy—we as policymakers representing we as the current majority in society—Ms. Khan should be as happy if Donald Trump is elected policymaker-in-chief as if the crown is given to Joe Biden. The people will have spoken in one case as in the other. Setting the problem in these terms suggests that the danger of collective choices is the same on the right and on the left as we know them: under a strong leader, “we” impose “our” preferences on the rest of the “we.” It is urgent to think out of the political box.
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Big Mother grabbing control of bad businesses (By DALL-E under the inspiration of P. Lemieux)
READER COMMENTS
Jose Pablo
Jun 8 2024 at 12:16pm
Ms. Khan should be as happy if Donald Trump is elected policymaker-in-chief as if the crown is given to Joe Biden
That is very interesting. “We as policymakers” and/or “we as a society” are a legitimate “force for the greater good” only “when the “we” is “our we”, but not when the “we” is “their we”. Curiously enough when the “we” is “their we”, the “we as policymakers” suddenly becomes a force for the greater bad that should be restricted and controlled.
I tend to believe that Ms Khan, helped by his superior moral compass, is convinced that she knows perfectly well which are the good decisions and good choices, no matter which “we as policymakers”, or which “we as a society” is in (temporary) charge of making them. Why, then, use this pretense of moral legitimacy granted by political majorities, she clearly (and rightly) doesn’t believe in?
If she is morally superior, as she is convinced she is, why the appeal to majorities?: take power and steer the “we” in the right direction, whether they, in their ignorance, like it or not.
But if “moral superiority” only depends on a handful of constantly changing votes in swing states, as she pretends in her speech, why make such a great deal of it? Why let this kind of watered-down “moral superiority” rule our collective choices?
Richard W Fulmer
Jun 10 2024 at 8:39am
Good point.
MarkW
Jun 9 2024 at 12:01pm
Lina Khan might be the worst official brought in by the Biden admin — that’s saying something given the competition.
dhbiv174
Jun 11 2024 at 2:26pm
Do we have sufficient information regarding such “competition”? Perhaps Chair Khan can evaluate this question.
David Seltzer
Jun 9 2024 at 6:21pm
Pierre: Such disrespect from smug, self-righteous persons like her. They just can’t leave others who cherish autonomy alone. We know the story all to well. Rubio’s Coastal Grill in California is shutting down 48 locations because of Gov Nuisance’s $20-an-hour minimum wage for fast food workers. I suspect Ms. Kahn also believes competition is too important to be left to the market. Please excuse the indignant rant!
Pierre Lemieux
Jun 9 2024 at 7:38pm
David: Your indignation is understandable.
Monte
Jun 10 2024 at 2:53am
Ms. Khan is a Neo-Brandeisian who refuses to disabuse herself of the notion that the absolute power to stymie any perceived threat to what she considers “fair competition” is the exclusive preserve of her office (as alleged by the House Judiciary Committee). In a critical review of her highly publicized article, Amazon’s Antitrust Paradox, former FTC commissioner Joshua Wright revealed “a profound lack of understanding of the consumer welfare model and the rule of reason framework.”
Ms. Khan, fellow alumni Tim Wu, and others belonging to this school of thought, intend to reinvigorate another anti-trust movement similar to the one led at the turn of the century by their exemplar, Louis Brandies, that was “hostile to powerful corporations and the trend toward bigness in American industry and finance” and whose stated mission is to “treat as unfair methods of competition any practice it deems exploitative, regardless of whether it can show market power or harm to consumers.”
Time to break up this Khan-opoly.
Craig
Jun 11 2024 at 2:20pm
Just some food for thought because we are now entering the age where many corporations have market capitalizations that seem to look more like a GDP stat (Pierre chastised me for making this comparison in a tweet!). Indeed whether or not an apt comparison, the issue still remains about the future possibility of corporations acquiring powers that we typically attribute to sovereigns? What happens if OpenAI and Boston Dynamics merge 30 years from now and the resulting robots come out and say, “We’re in charge now!” — perhaps we might want the FTC to block that merger?
dhbiv174
Jun 11 2024 at 2:29pm
I’m fairly certain there would be consumer harm if the robots kill us all, so I don’t follow your point. No one is saying there should be zero antitrust enforcement.
Monte
Jun 12 2024 at 11:40am
More concerning, to me is the prospect of the government exercising this power. While preferring neither, a corporatocracy would at least pose less of a threat to individual liberty than a totalitarian state. However, I believe anti-trust law (as it currently stands), is sufficient to prevent this from occurring.
Monte
Jun 12 2024 at 1:57pm
Corrected link.
Monte
Jun 12 2024 at 1:58pm
Corrected link.
Comments are closed.