Recently I noticed intriguing and dismissive rhetoric that smashes back on optimistic calls for modernizing the Competition Act in Canada. It’s the p-word: “populist.”
Well, I noticed it twice - first as a sort-of-slander against me and my research collaborator (and friend!) Robin Shaban suggesting we are “anti-big populists,” and the second, as a header for a recent event hosted by the Macdonald Laurier Institute, “Monopoly Games: Moving Past Populist Rhetoric on “Big Digital” to a Competition Policy for Post-Pandemic Growth.”
When I heard the p-word raised as a concern by a government official during an informal conversation, I thought it would be worth interrogating a little bit more.
Last month, I interviewed Matt Stoller (of the American Economic Liberties Project and author of “Goliath: the 100-year War Between Monopoly Power and Democracy) and Ali Haberstroh (Not Amazon) at the Toronto Public Library.
When I asked Matt about the “populist” label, he had this to say:
Vass: Let’s talk more about citizen power and consumer power, and how to get everyday people more involved in caring about these issues and expressing their concerns. Matt, you’ve talked about movement-building in the US and I imagine that expands beyond scholars. Do you want to riff a little bit in terms of what has happened in the US over the last ten or so years that has led to the action/activity/discussion that is now happening?
Matt: It’s a resurrection of the kind of populist tradition, and by popular style - farmers. Populism as a movement was invented in the 1880s and 1890s by farmers in the Midwest and the Southern US who were opposed to railroad barons and high interest rates. This was largely a left-wing movement and a rural movement. Every so often, you have a return of these “populist” ideas and in the 1930s they were one of the key factions behind the New Deal. You saw it again in the 1970s when it aligned a lot more with organized labor. And you see that today, “populism” is also paired with “anti-populism,” which is something Thomas Frank has written about; which is not how bankers and intellectuals portray “populist” which is usually as a bunch of racists. It’s a fake story, but that is how they frame it. Populism is actually anchored in a real democratic tradition. A lot of elements of populism in the US are portrayed in a more favourable light in Europe; as kind of equivalent to facism. The origin of “populist” is more pro-producer and pro-worker.
Vass: Maybe you can give me some advice. In Canada, the word “populist” is used as a slur alongside the mantra of “big isn’t bad” (which it isn’t!). I’m noticing this coming up more and more from gatekeepers…
Matt: I always bring up examples of economies of scale, and diseconomies of scale. Take Facebook - what about the genocide in Myanmar? Facebook has 3B users and they can’t pay attention to every one of them. When you have these kind of giant systems that have a weird sort of private regulation - we’ve seen it with Boeing, where Boeing consolidated the aerospace industry in the US and its domestic monopoly. As a result, people used to think of Boeing as an amazing, profitable, great innovator and it was a big exporter. Then the Boeing 737 Max came out and everything they do sucks now. You saw that with the “too big to fail” banks as well. What’s important is to bring up examples and say: there may be concerns about size, complexity, opacity...they’re confusing operational economies of scale with legal economies of scale...Here’s the rhetorical trick they are playing when they confuse operational economies of scale with legal economies of scale: take an auto plant. It is unlikely you are going to have a family-owned auto plant, right? Auto plants need to be big, and in many cases, the bigger the auto plant, the more efficient. However, if you take 10 auto plants and put them under one legal infrastructure so one company doesn’t make any of the plants more efficient. You may have operational scale, but legal scale is a totally different question. And if you look at the most scalable institutions that we have, just look at the internet. It’s scaled by a factor of 10 or 100M, and no one owns it; it’s not owned by a corporation. When someone tries to discount anti-monopoly research by saying “oh, you just think big is bad,” what they are really saying is: these types of network systems do not have to be contained within one legal form of a for-profit corporation. And when you *do* contain them in one for-profit corporation - for instance, where there are no kinds of common carriage rules on non-discrimination and leads to disaster like ethnic conflict.
Rarely does a work of history contain startling implications for the present, but in The People, No Thomas Frank pulls off that explosive effect by showing us that everything we think we know about populism is wrong. Today “populism” is seen as a frightening thing, a term pundits use to describe the racist philosophy of Donald Trump and European extremists. But this is a mistake.
The real story of populism is an account of enlightenment and liberation; it is the story of American democracy itself, of its ever-widening promise of a decent life for all. Taking us from the tumultuous 1890s, when the radical left-wing Populist Party—the biggest mass movement in American history—fought Gilded Age plutocrats to the reformers’ great triumphs under Franklin Roosevelt and Harry Truman, Frank reminds us how much we owe to the populist ethos. Frank also shows that elitist groups have reliably detested populism, lashing out at working-class concerns. The anti-populist vituperations by the Washington centrists of today are only the latest expression.
Frank pummels the elites, revisits the movement’s provocative politics, and declares true populism to be the language of promise and optimism. The People, No is a ringing affirmation of a movement that, Frank shows us, is not the problem of our times, but the solution for what ails us.
🌹 At the other end of the pendulum, some are calling for antitrust debates to be stripped of ANY romanticism.
Aoife White @aoifewhite101And the new EU antitrust chief is the "old" antitrust chief, @vestager with an extra role as vice president overseeing digital change.
Canada’s biggest crack at populism was probably the SoCreds in Alberta in the 1930s (Alberta Treasury Branch, funny money, etc) and the Co-operative Commonwealth Federation (CCF) in Saskatchewan (also founded in the 1930s).
While the gestures at “populism” are dismissive of the public’s interest in robust competition policy, it’s worth noting that Canada takes a unique approach to competition that is less common. While our legislation privileges the efficiency defense and is under-funded compared to peers, the country has typically tossed a public actor (competitor) into the mix. As Paris Marx (Tech Won’t Save Us) has pointed out to us, these tend to be Crown corporations that ostensibly help to ensure that massive foreign companies don’t crowd out Canadian competitors. Indeed, we have a history of setting up public institutions like the CBC (founded in 1936, after the 1929 Aird Commission, which also led to the creation of the CTRC) in order to maintain independence. Canada places regulations on culture (via the Broadcasting Act, financial support and programmatic incentives), food (supply management) and telecommunications (again, the CRTC) that cement the ability for a Canadian companies to compete. We have even formed public companies like CN Rail, Air Canada, Petro Canada, SaskTel, and Ontario’s LCBO, and others to be quasi-monopolies serving the public good. In contrast, the United States has typically taken a regulated private-sector approach.
In this way, you could say that Canada’s competition policy has always had a protective, “populist” edge embedded within despite our explicit competition policy being deeply anti populist.
Other policy areas related to competition may have a populist or nationalist vibe. Perhaps the best way to counter this sneer of a label (discounting non-elites that are thinking about competition policy) is with data and information. The lack of comprehensive competition scholarship creates a dangerous blindness. More Canada-specific research can help us have a broader conversation about the implications of that research that is in conversation with our history and the unique aspects of our economy. Many are committed to this ongoing work, which is exciting.
Competition policy has always been about power. It has rarely been about people.
The law ignores workers and disadvantages entrepreneurs that are vulnerable to terms set by the largest digital firms. And look, no one is saying we should nationalize Shopify. We just want the merchants that are powered by the platform to have a fair shot.
Join us this Friday for a discussion about how Amazon is influencing economic geography. 👇
Vass Bednar is the Executive Director of McMaster University’s new Master of Public Policy in Digital Society Program.