Technology, Monopoly, and Antitrust

Abstract

It is in the nature of technological advance to centralize control over production and divorce it from the consumer, placing the consumer at the mercy of the producer. For most of human history, the fight for consumer rights was a fight for democracy, because the state is the ultimate monopolist. The state relies on technological advance in arms to monopolize security, which is an essential input into all other forms of production, enabling the state to control all production. Because competition between states is not desirable—it means war, or the risk thereof—the security monopoly that is the state could be tamed only by reorganizing states from their traditional shareholder-dominated structures into the consumer-cooperative structure known as democracy. Having achieved this, consumers demanded that the state supply security on nondiscriminatory terms to all other producers. This new age of economic freedom, combined with accelerating technological advance, led to the proliferation of private monopolies. But enforcers could not follow through on the mandate that antitrust laws provided to smash these monopolies because that would have meant cutting off the technological advance that had created the monopolies in the first place. Technology itself ultimately came to the rescue, however, by differentiating and improving products, and thereby circumscribing and overthrowing, with increasing frequency, each generation of private monopoly. Antitrust settled into the chastened role that it occupies today: ensuring that firms do not short-circuit the process of technological advance that will eventually make them obsolete. Accordingly, antitrust prohibits attempts by firms to degrade the products of their competitors instead of improving their own. The Tech Giants are no more than the latest generation of technology-driven monopoly. Antitrust’s role is to ensure that they cannot postpone their own demise by disabling nascent competitors wielding more advanced technologies.

Keywords: antitrust, technology, law, monopoly, democracy, consumer cooperative, state, security, Tech Giants, platforms

JEL Classification: D20, D30, D42, K21, K34, N00, O14, O30, P11