I just read an interview over at PorMarket, The Exercise of Market Power Probably Contributes to Economy-Wide Inequality. It’s with Jonathan B Baker and discusses how effectively having a monopoly tends to increase inequality. If this sounds a little obvious, well, that’s because it is. This is why monopolies are technically illegal. But the issue really isn’t specific market failures. The issue is (or should be) capitalism itself.

The first question starts, “The discourse on concentration, market power, and bigness in many US industries has increased dramatically in the last year.” Really?! Like so many things that economists were thinking a lot about over a century ago, economists are again thinking about them. It’s sad because this really isn’t about finding a better way to arrange our economy. This is instead a big effort at capitalism apologetics. It’s a faith-based belief that capitalism is the right system. These economists (and they are mostly “liberal” economists) are trying to tinker with the system to save it. No thought is given as to whether capitalism is worth saving — much less if it can be saved.

Problems of Capitalism

A question later on in the article starts, “The five largest internet and tech companies — Apple, Google, Amazon, Facebook, and Microsoft — have outstanding market share in their markets.” It then goes on to ask about anti-trust. That’s an issue with Apple, Google, and Microsoft.

For example, I think Google is the biggest search engine because it is the best. The truth is that a company could come in and destroy Google. Certainly Microsoft could have, but it never thought it necessary to create anything but Google with more images on the front page. Now it is true that Google might be immune to competition because at this point it is “good enough.” Any better search engines might be welcomed by people who have to do research seriously, but for 99 percent of the people Google is good enough. Even still, I can see Google losing out.

Facebook

I leave Amazon alone, because it is kind of a hybrid of these companies on one hand and Facebook on the other.

Facebook is different a bird altogether. It is successful because it is successful. You could create a Facebook that is ten times better, yet it wouldn’t matter because what makes Facebook useful is that everyone is on it. So Facebook is a huge financial success due to nothing but the luck of timing (and having rich friends whose dads could back you — again: luck).

Last night, I heard on the news that someone was rushed to Zuckerberg San Francisco General Hospital and Trauma Center. Oh. That was the first I had heard of that. It appears that the boy no-wonder gave SF General $75 million. With a net worth of $58 billion, that is roughly equivalent to me giving SF General the contents of the wallet — and I carry very little cash on me. Yet in addition to being given ridiculous sums of money for being in the right dorm room at the right time, he’s given hugh societal pats on the back for what is the equivalent of me giving spare change to beggars.

Why Don’t Economists Talk About Capitalism Itself?

My point is not to beat up on Zuckerberg, however. I don’t find him particularly more evil than any other high tech billionaire. But the question is why is it, “The discourse on concentration, market power, and bigness in many US industries has increased dramatically in the last year”? And why isn’t it, “The discourse on the random and immoral natural of capitalism has increased dramatically in the last year”?

I know the answers to these. Regardless of all the pretense to economics being a science, it isn’t. And the people who practice it are trapped by their faith-based beliefs.

The Unstated Assumptions

Whenever I talk about this kind of stuff, I know there are tech people out there who scoff at me. When I worked more directly in high tech, I used to talk about this stuff. I got lots of scoffs. But the responses I got were always the same old stuff. First: communism! Somehow, the fact the USSR under communism didn’t work as well as the US under capitalism is taken to mean something, despite the fact the US had a huge advantage to start with and then the lack of a world war decimating it.

Second: innovation! If it weren’t for capitalism, there would be no innovation and we would all still be farmers. But this is so clearly not the case. And there are other ways of encouraging innovation than making it like a lottery. What’s more, capitalism encourages people to game the system. Look at how litigious Apple and Microsoft have been.

When I look at innovation, what is normally the case is that people working at universities and national labs come up with new ideas, and then private companies come in and monetize them. Well, there’s no reason why the government and non-profits and worker collectives couldn’t do the same thing. (Note: in the old days, many corporations also innovated; but those days are long gone.)

I’m Still Searching for Answers

Note that both of these reasons for why we absolutely must stick with capitalism are not based on evidence. They are just taken as given in our society. I’m not saying that I’m right. And I certainly don’t have all the answers. But I know that whether capitalism is the right system for us is a question, not a given. It doesn’t matter how well you think, if you can’t see the important questions, all the thinking in the world will take you nowhere. And we are getting there. Fast.

I head Sam Harris say something in a video from some time ago. Basically, it was this, “There is no reason why a person’s position on guns should correlate with their position on global warming.” And he went on to discuss political tribalism. It’s not surprising that I share the same concern that he does. There are a lot of thing I agree with Harris about. Just the same, as usual, I think Harris’ thinking is simplistic. And his example is bad.

For one thing, in the US, the liberal position about guns is that they should be regulated. I’m sure that Sam Harris — who is very pro-gun — is nonetheless on the “liberal” side of this. Of course, what he writes is very clearly designed to appeal to gun fanatics. But if you press him, he’s for the same kinds of gun control measures that Barack Obama is. So in that regard, he would be in the same liberal tribe.[1]

Political Tribalism Is a Given

But the broader observation is worth talking about. People are tribal in their political beliefs. This is hardly surprising given that humans are social animals. If we weren’t, we certainly would have gone extinct by now. But from a political standpoint, it is troubling. I’ve seen people transition from both liberal to conservative and conservative to liberal. And it is usually a single issue that does it. I am right now watching a liberal friend turn into a conservative because of transgender rights. And it won’t surprise me at all if she’s wearing a “Make America Great Again” hat the next time I see her.

The problem is that there are good reasons for correlations that Harris mentioned. For example, there is an evidence base for reducing access to guns and for doing something about global warming. That’s true to a very large extent on the left in this country. Now that may be because the left in this country is really just the center in a global sense. We have, of course, heard that liberals who believe in evolution and global warming insist that vaccines cause autism. But it turns out that it is actually conservatives who are most likely to believe this hokum — by a large amount.

Partisan Differences

I’m really skeptical because I am a liberal (in a general sense), but it certainly seems that tribalism on this side of the isle is based on a general belief in science. And my personal experience is that more politically involved liberals will grudgingly accept unpleasant evidence — eventually working it into their world views.

On the right, we see far more tribalism. And on this we have some evidence. John Dean lays it out in Conservatives without Conscience. In that book, he documents that roughly half of the Republican Party is made up of authoritarian followers. So it is hardly surprising that conservatives would be tribal. In the US, conservatism is almost the definition of authoritarian.

Still, on the left, we are tribal. In some ways, I wish we were more so. I’ve often been bothered by how quickly we are to cast aside public figures who allegedly act inappropriately. Conservatives are more likely to stick by such people until the evidence is overwhelming. And I have a fair amount of respect for that. Think of Shirley Sherrod and ACORN. But I don’t think that’s so much about tribalism as it is cowardice. As a Democrat, I can say with much justification that this is something we really need to work on.

Levels of Tribalism

But there are different levels of tribalism. In its most pure form, you will never disagree with what your group believes. But there are more moderate forms of it too. Most liberals I know do have a knee-jerk reaction to things (I very much include myself in this). If the Cato Institute announces that they have a new healthcare bill, we are ready to pounce. But in general, we are open to being wrong.

It’s not like tribal beliefs are random. In the United States, the main thing that doesn’t make sense is the Republican Party. When I talk to conservative people, I usually find that their beliefs are far more coherent. But the party itself is effectively a con: a party dedicated to the interests of the rich, which advertises itself as the opposite. That’s where the authoritarians come in. The Democrats couldn’t get away with such a bait and switch.

It’s Not All Bad

But it clearly is tribalism that causes someone to start with “I don’t want boys peeing in girls’ bathrooms” to “The estate tax is a communist plot!” But going from “Now I see that we need a mandated a living wage” to “Women should have the right to control their own bodies” doesn’t strike me as necessarily tribalism (given that having a baby is one of the biggest economic decisions you’ll ever make). So I don’t think that all tribalism is created equal.

Just the same, tribalism does bother me — especially when I see it in an extreme form on the left (or even worse, in myself). But in general, people bind together because they already agree with each other. There are liberal ways of looking at the world and conservative ways. There are also authoritarian ways of looking at the world. That’s the most dangerous kind of tribalism. And that’s roughly a quarter of our population — and overwhelmingly on one side of the political spectrum.

Afterword: Libertarians

Libertarians love to flatter themselves that they break the mold and just believe in “liberty.” I don’t want to get into it. But libertarians are just as tribal as anyone else. Look at how libertarians are anti-union almost to a person. There’s no reason for this. In fact, “right to work” laws are explicitly limiting the rights of employers and employees to make contracts, yet libertarians usually love them. I think it’s fair to say that libertarians are just following the herd on this. If not, I’ll have to lower my opinion of them even more.

[1] After the Sandy Hook massacre, Harris wrote The Riddle of the Gun. Note this amazing bit of false equivalence:

So on one hand you have those who think mentally ill people should be allowed to roam the streets with machine-guns. And on the other, you have people who can’t get inside the heads of gun enthusiasts. This is particularly stupid when you consider that there are people who would like guns to be completely illegal.