Back to the Platform Monopolies

I want to note an unexpected but fortuitous confluence of events. A number of times over recent months – here and on Twitter – I’ve written about the importance of monopolies and particularly platform monopolies both in the early 21st century economy and in our larger political economy. I know this most directly from how it affects the media industry because it’s the industry I work in. But it affects every part of our economy. And people are starting to realize that monopoly concentration is also a major driver of income and wealth inequality.

Because this is a big interest of mine, yesterday I interviewed Barry Lynn for my podcast. Lynn is probably the most prominent and influential voice about the importance of monopolies today. He has or at least had his work cut out for him because a number of factors over recent decades had made the idea monopolies and the importance of anti-trust action seem to many like a quaint artifact of a bygone era when reformers lacked a full understanding of how monopolies work in practice. Lynn’s work and that of his working group at The New America Foundation, have led in recent years to renewed attention to the issue from professional economists, the people who have the technical knowledge and (for better or worse) policy world credibility to bring these concerns from concept to proof. ‘Proof’ is probably too strong a word but I mean the kinds of studies that make the theories real or credible in policy and political terms.

In any case, you may have noticed that there’s a big story out today in The New York Times about how Google – one of the three preeminent platform monopolies – apparently used its juice as a major funder of The New America Foundation to get Lynn’s Open Markets initiative booted. As it happens, from my understanding, while this could have been the end of Lynn’s Open Markets Initiative, it’s actually been able to get separate funding and will be even bigger on the outside. But it does show, in a particularly brazen and comical manner, the power of the platform monopolies both in economic terms and political terms.

This actually gets at a separate issue, which my friend Steve Clemons, himself an architect of The New America Foundation (though no longer there), calls ‘deep lobbying’. We have fairly elaborate laws about lobbying. But that’s a fairly technical matter that means talking in specific ways to legislators and members of the executive branch about policy questions. We have other laws about campaign contributions, which is always joined at the hip with what we technically call ‘lobbying.’ We also have some regulation of advertising. But in political and policy terms that kind of lobbying pales in comparison to the potential impact of funding think tanks.

Think tanks come in many different flavors. The impact of funding is seldom as direct or ham-handed as what seems to have happened at New America. Lots of big corporations fund think tanks to do work which doesn’t directly affect them. They do it out of a mix of corporate citizenship and wanting to burnish their brand identity by the appearance of corporate good citizenship. Every big company wants the reputation of being good guys. Funding good work on important policy questions is a way to do that. This may sound naive or pollyannish. But it is important to note that a significant amount of this funding can be benign in the sense that what the funder wants from the funding is not always inimical to the quality or independence of what is being funded. Again, think tanks come in many different flavors: some are totally mercenary chop shops, others go to great lengths to preserve their policy scholars independence. I know many of these people and most of them work hard to manage this balance while making possible the funding of a lot of policy folks whose work you’re likely familiar with.

But even when it’s not heavy handed, a particular corporation’s giving, if lavish enough in general, can create a real and fairly obvious disincentive to fund research on topics they may not like. Again, this is obvious. This doesn’t even have to be willful or intentional on the funder’s part. It just goes without saying. But being a generous funder of think tanks can pay big dividends in the policy world in a way that likely has a far, far higher rate of return on investment than what we narrowly call ‘lobbying’. It’s a big, big deal and seldom discussed.

In any case, I didn’t know about this issue when we scheduled the Lynn interview. I only found out about it later. And we don’t talk about it in my interview. But it makes Lynn’s work, which we discuss, more relevant than ever. We are going to try to have the podcast online this afternoon. I’ll post it here in the Editors’ Blog when it’s ready.

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