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Circle of Competence Issue #76

QUOTE OF THE WEEK

"A page of history is worth a volume of logic." - Justice Oliver Wendell Holmes

FOOD FOR THOUGHT

Amazon's antitrust antagonist (Lina Khan) has a breakthrough idea (New York Times)

Lina Khan's paper: Amazon's Antitrust Paradox (Yale Law Journal)

Antitrust in the internet era: the legacy of United States v. A&P - a response to Lina Khan's paper (George Mason Law & Economics Research)

The debate over how (or whether) to regulate big technology companies has fascinated me since hearings, fines, and opinions began swirling about some 3-5 years ago. This week, I read a great piece in the NYT about Lina Khan, a young law student, who is leading the charge on a new way of characterizing monopoly power that isn't centered around short-term price and consumer welfare (i.e. lower prices render consumers better off vs. forcing consumers to pay higher prices through monopoly power). However, political angles abound, and history has lessons to teach us about how policies will affect economic landscapes.

There are a two ways to characterize monopolistic behavior in my mind:

- Monopoly over market - can dictate consumer price (high hurts consumer, low benefits consumer) and dictate supplier terms (squeezing margins based on size and leverage)

- Monopoly over labor - can dictate wages paid (high benefits laborers, low hurts laborers)

On top of these two monopolistic behaviors, there is the sticky problem of tech c