Fighting Dogmatism in Politics, Future of Antitrust

Sunday August 15, 2021

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What Happens Next is a podcast where experts are given just SIX minutes to present. This is followed by a Q&A period for deeper engagement.

This week’s topics include fighting dogmatism and the future of antitrust policy.

Our first panel includes Gary Saul Morson and Morty Schapiro who will discuss their book: Minds Wide Shut: How the New Fundamentalisms Divide Us.

Our first speaker is Morty Schapiro who is the President of Northwestern University and a Professor in Economics.

Both Morty and Saul are opposed to the polarizing dogmatism that is common in our polarized political debates.

I hope to learn from Morty about what he has learned from his vantage point as a university president about the role of the university in encouraging free speech and political discourse.
Morty also has the perspective of someone who has come under personal attack from the cancel culture movement. I want to learn about successful ways to challenge these attacks in the public debate.

Morty is also an economist and I hope to learn how economic tools can make our political discussions about governmental policy more productive.

This week the US Senate is discussing a 3.5 trillion-dollar bill. This proposed legislation would enact the largest expansion in the Federal Government’s history. I want to hear from Morty about how the field of economics can aid us to evaluate this major shift in governmental policy.

And if such a substantial change in economic policy should be implemented without any support of the minority party?

Our second speaker is Gary Saul Morson. Saul is the Lawrence B. Dumas Professor of the Arts and Humanities; He is also a Professor Slavic Languages and Literatures at Northwestern University. Saul has spoken twice before on What Happens Next. In April 2020 Saul discussed a Chekhov short story entitled The Bishop and in June 2020, Saul considered potential lessons from Pre-Revolutionary Russia.

Today, I hope to learn from Saul about the power of literature and how the realist novel can help us better understand the mindset of others.

Our final speaker today is Josh Soven who is one of my best friends. I met Josh in my first college class, an English seminar about malcontent characters in the novel, in September 1984. Neither of us have changed much in the 37 years that we know each other.

Josh is an antitrust partner at Wilson Sonsini law firm. Previously, Josh worked at the FTC and in the Department of Justice’s antitrust division and in particular in the health care division.

Josh spoke on What Happens Next twice previously. His latest presentation was on an antitrust panel with Doug Melamed and Fiona Scott Morton. Much has changed in the antitrust arena in the past few weeks because President Biden has placed progressives Lina Khan as the Chair of the FTC and Tim Wu as responsible for technology and competition policy.

Josh will speak about how the progressive wing of the Democratic Party will try to change merger policy. In addition, will Khan and Wu try to break up Big Tech like Google, Apple, Facebook, and Amazon. And will the Biden Administration use prescriptive regulations and executive orders in lieu of stopping corporate mergers to achieve their view of the public interest.


Morty Schapiro and Gary Saul Morson Panel + QA


Morty Schapiro

Bio: President of Northwestern University and Professor of Economics
Topic for Saul and Morty: How to Fight Against Intellectual Dogmatism in Politics, Economics, Religion and Literature


Larry Bernstein:
Our first speaker today is Northwestern University President Morty Schapiro, Morty please go ahead.

Morty Schapiro:
Thank you, Larry. You had some great questions. I’m going to save those for the Q&A after and use my six minutes just to set the stage for Saul a little bit about our latest book, Minds Wide Shut. I think everyone listening understands this increase in incivility in this country and in other countries. Saul and I have a new essay. We’ve written several of them since the book came out a couple of months ago, and this one we just cited in the beginning some polling data for Americans, where 62%, almost two out of three of Americans, said they have political views they’re afraid to share. And you mentioned, Larry, about what it is like on campuses. If 62% of Americans are afraid to speak their mind, I can imagine what it is like on college campus campuses. In this age of Cancel Culture, people screaming at each other, vilifying your opponent; your opponents aren’t just misguided, but the embodiment of absolute evil. That was the thing that worried us, Larry, and that’s why we wrote this book, Minds Wide Shut.

You mentioned fundamentalism, the subtitle is How the New Fundamentalisms Divide Us. We go into great pains, Saul did actually, in an early chapter in the book, about defining fundamentalism, which is used very conveniently for everything you don’t like. We have a very specific definition. I’ll just do very quickly mine, which is that if you have any beliefs that are fundamentalist, it’s because you think they can’t be wrong. If you’re absolutely certain, there’s clearly no role for dialogue, and I think we all should recognize the fundamentalisms in each of us and in society. We can talk about that after.

We argue in the book that fundamentalism hits us across a wide spectrum of areas, not just religion, and that’s where the term comes from, but in my field, economics and politics, culture, the academy, and the like. And we worry in conclusion here now that we fear for democracy. If you look at some survey data, other survey in addition to the 62% afraid to speak their mind about politics, more than half of Americans in a recent poll said that the number one threat to this country is other Americans. Now, I said this in other podcasts and webinars where people say, “Well, maybe what about the ’50s? Maybe that was the always case.” I don’t know, but I don’t have a time series, but it is scary that more than half of Americans say the number one threat to America is not climate change, growing wealth inequality, the former Soviet Union and China, but other Americans.

Almost exactly half of Americans said that they would label their political rivals not as opposing rivals, but as enemies, and that speaks to this rise in people screaming at each other. A third, and this really worries me, and it gets to your point before about violence and intimidation, one third of American said violence and intimidation could be justified if you achieve political objectives. And then maybe the scariest is that a quarter of Americans say they support breaking up the United States of America, and that is unbelievable, 25%. What can we do about it? What gave rise to it? What do we think the future is going to be like? I’ll leave that for Saul.


Gary Saul Morson

Bio: Lawrence B. Dumas Professor of the Arts and Humanities; Professor, Slavic Languages and Literatures at Northwestern University
Reading: Minds Wide Shut: How the New Fundamentalisms Divide Us is here


Gary Saul Morson:
I’m a Russian specialist and studied the Soviet Union, so one of the things that strikes me about the kind of fundamentalist sort of thinking, which is not necessarily religion. Marxism and Leninism is a good example of it, it professes absolute certainty. It cannot be wrong, and therefore anybody who doesn’t share it is either stupid or most likely evil. Now, if you have this view, there is no room for a difference of opinion, and democracy depends on the notion of a legitimate difference of opinion.

So, you think to yourself, “Well, yes, this is what I believe, but of course like everybody, my experience is partial. I think I’m right, but God did not speak to me. I might turn out to be wrong. Occasionally the other side is right, or maybe some combination of the two.” That’s exactly what a fundamentalist doesn’t think. Lenin had complete contempt for notions like that. You know, and you absolutely know, and when you do that, if there’s no legitimate reason for opposition, there is no reason not to have a one-party state. There’s no reason if the other side is simply evil not to do what Lenin did. Maximal force, you don’t sort of gently cuddle the opponent, you just eliminate them. When you see that kind of thinking, that’s where it’s headed.

The lack of tolerance with diverse points of view seems to flow directly from this. You can’t be wrong. It’s also why you don’t know what the other points of view are. People isolate themselves. I know lots of times when people I know have said, made some point, and then I say, “Well, what’s the other side of that?” And they simply haven’t a clue, because they only listen to one side, and it never dawns on them that you don’t know the other side if you only know your side’s characterization of the other side. And of course, that’s sort of like allowing a trial to be done only with the prosecution, and then the prosecution presents what the defense should be saying, right? You won’t really know what they say. You only know what the other side says if you can paraphrase their position in such a way that they would accept it, but that’s what’s not done.

Where does this claim for certainty come from? How do you justify it? Well, one way, in religious cultures, it came directly from God. You know what God thinks. A second characteristic of fundamentalism we call the perspicuity of truth. That is the truth is perfectly obvious to any right-thinking person who looks at it just the way, the Bible’s meaning is perfectly clear if you think that way.

What plays that role in a secular culture? And the answer is the appeal to science. And so people make claims that science speaks for them, when it’s perfectly clear that they do not understand what science is. There are lots of, we talk about this, there are lots of ways that without knowing the science on any given topic, you can tell when the appeal is misguided. For example, if someone speaks of science as a single block of truth, all of which is equally sure, they don’t understand science. If that were true, science couldn’t advance. That’s how religious dogma is, a single block that’s equally sure.

But there’s always more recent things, less sure in a science, more likely to be overturned than more established things. Even more established things could be, but someone who thinks of some recent thing based on recent data or computer model as science and you can’t challenge it, does not understand what science is, and it’s appealing to it as a form of superstition or as a religion, if you will. Another way, if they take the policy recommendation or the social consequence, as they see it of a scientific doctrine, as part of the science, let’s say the way Social Darwinists do, science doesn’t have anything to say about morality or society, and there is no social science in the hard sense of that. When they do that, you know immediately that they are misusing it.

Our science reporters don’t seem to understand, and very often, our scientists don’t seem to understand it. They think that if they phrase their insights to do the most political good, that’s what they should be doing as scientists. But when they do that, people pick that up and they ceased to trust the scientists as representing science. When Dr. Fauci says, “If you criticize me, you’re criticizing science,” he misunderstands. A scientist isn’t science. The science is science, and scientists are people. They make mistakes, they lie, as he did, they misrepresent things. That is exactly what you don’t want, what someone who understand scientists wouldn’t think.
I’ve been surprised that in recent years we’ve seen more and more affection for a command economy, that form of socialism. A poll I just saw yesterday said that the majority of Democrats, not of the population, but of Democrats, prefer socialism to capitalism, and as someone who studied the Soviet economy, one would think that that showed why it cannot work. But the key notion the Soviets had also pertains to certainty. That is, they thought they had a science of society. That entitled them to be certain, which meant they don’t have to rely on the anarchy of the market, which would control people against their will. Society has perfect knowledge and therefore can completely scientifically organize society.

The notion of certainty immediately involved the centralization of power to the maximal extent possible. And when the Soviets said, “speculation is a crime,” they didn’t mean gross overcharging. Any economic activity outside the plan was speculation and criminal. So that one factory couldn’t trade with another what it needed if they both had it. That was criminal. It was sometimes done, but it was criminal.
Larry raised the point about where realist literature comes in, and there, I think that the great realist novels, literature generally, but novels in particular, teach us empathy, intellectual as well as emotional, because you inhabit the skin and the thought process of a person unlike yourself. You follow it for hundreds of pages, and you get practice in seeing the world from a point of view other than your own. And then hopefully, you can carry that practice over elsewhere. Other disciplines can tell you to empathize. They don’t give you practice in it, but great literature does. And I think with more of that, more of that spirit that you’ll find in Tolstoy or George Elliot or Jane Austin, our polity would probably work a little better.


Questions for Morson and Schapiro


Josh Soven

Topic: Going after Big Tech
Bio: Partner at Wilson Sonsini, former Section Chief and Trial Attorney at DOJ Antitrust
Reading: What Happens Next to Antitrust in Six Questions is here


Larry Bernstein:
We’re going to go to our final speaker now, Josh Soven. As I mentioned before, Josh was my college roommate, and he worked at the Department of Justice and FTC in the field of antitrust. Josh, why don’t you take us through your six minutes?

Josh Soven:
Larry, thanks very much for inviting me back. And before I start, that was a fantastic presentation we just heard. Really, really interesting, I enjoyed it. So let me say at the outset that not surprisingly, I and my firm represent a lot of companies with interest in these antitrust issues these days. And these are of course, my views.

A lot have happened since I last spoke on the program. As Larry mentioned, President Biden chose Lina Khan to be the chair of the Federal Trade Commission, Ms. Khan favors a much more aggressive antitrust enforcement approach. She became quite famous in law school when she wrote kind of a cutting-edge article that was criticizing the application of the antitrust laws to Amazon. What’s also happened, is a federal judge appointed by President Obama dismissed the FTC’s complaint against Facebook. They have until Thursday of this week to let them know what they’re going to do.

The House Judiciary Committee, with some support from Republicans, voted out laws that would place restrictions on large digital platforms. And just a few weeks ago, the Justice Department blocked the Aon Willis Towers Watson transaction, even though the European commission had approved the deal with some conditions.

So, my topic today is to talk about what’s really going on here, what’s driving this and what it means for business. And throughout my remarks, I will emphasize that this is a practical discipline. It is spoken about these days in somewhat theological, and at times philosophical concerns, but it’s really not. It’s a day job, where women and men are doing it in the field, and how they implement it is very important.

The bottom line of the present condition, is that antitrust has once again become part of national economic policy, with a mix of progressivism and populism. And I’m not criticizing that, I agree with some progressive things and some populous things, but this incorporation of it into broader national economic thinking really hasn’t happened for decades.

For the past 40 years, the Justice Department and the Federal Trade Commission have handled antitrust enforcement largely below the radar on a case-by-case basis, with a laser focus on harm to consumers. If the agencies thought they could prove higher prices or reduced innovation that harmed consumers, they would bring a case. If they didn’t, they closed the file and moved on to the next matter.

Members of the Biden administration, and some on the political right as well, believe that antitrust should be viewed from a much more macro perspective. They believe that many US industries are far too concentrated, and that this concentration is causing big problems, not just for consumers, but also workers, small businesses, and indeed the larger fabric of American society. They blame what they view as lax antitrust enforcement by prior administrations, Republicans and Democrats, and an overall misunderstanding of the purpose of the antitrust laws.

FCC Chair Khan and Professor Tim Wu, who advises the president on competition issues, are really big proponents of this view. What’s also going on, is due to the rapid growth of just four companies, Google, Apple, Facebook and Amazon, that has turbocharged popularized interest in antitrust across the political spectrum. Again, in a way that hasn’t happened for decades. Many of the concerns expressed about these companies don’t actually really have much to do with traditional antitrust, issues related to privacy, data security and political speech, while obviously extremely important, have always been dealt with through other laws. But now politicians are looking to use antitrust enforcement methods to address these issues.

So, what does this all mean for businesses, particularly ones who don’t really view themselves as Google, Apple, Amazon or Facebook? First, what I tell clients probably on a daily basis: don’t panic. So far, there really have been no substantial changes in outcomes, at least not yet. The actual results coming out of the antitrust agencies today, remain within the traditional mainstream.

That said, companies definitely should not take a business-as-usual approach over the next three and a half years, and perhaps longer. Just focusing on prices, and levels of service to consumers in their arguments, isn’t going to get the job done at all. Targets of antitrust investigations will need to broaden their advocacy to cover a wide range of issues, including impact on smaller businesses, market structure, the labor markets in particular, and data security.

In order to reduce risk, it is really important that parties to strategic mergers decide to move a lot faster in responding to government requests for information. These merger investigations take a few months short of forever, it’s not uncommon for them to take more than a year. And while the length of these investigations has always been strategically dangerous for merging parties, in this environment, regardless of whether your big tech or not, it’s going to become increasingly fatal. And long merger investigations are neither legally required, nor practically necessary. Technology allows the parties to produce the information rapidly that the government wants. And at the end of the day, the analysis, this is a little bit perhaps against my own interests, the analysis that the government is doing with antitrust work really is not all that complicated. As Larry knows, my dad was a physics professor for 40 years, this is not physics, and it’s not even close to it. It’s a pretty rough discipline, where men and women largely of goodwill, are making decisions with highly imperfect information.
Finally, and this doesn’t get talked about enough as well, but it will, for most high-profile strategic deals, companies are going to need to have a litigation strategy in place from the beginning. A unique attribute of the US antitrust system, is that the Federal Trade Commission and the Justice Department generally need to go to court in order to block a transaction. This is a really, we were just talking about checks in the constitution, this is a really powerful check on the antitrust agencies. But it only works if the parties are prepared to litigate from the get go. If companies aren’t willing to fight, then the government lawyers are going to sense it immediately, and they will lean on them to apply leverage.

What’s also interesting about what’s going on, is an incredibly US-centric focus of the discussion, but it’s really Europe that probably is going to present the biggest risk for many US companies over the next five years, in the antitrust world. Economic populism is just as strong in Europe as it is in the United States, and unlike the Justice Department and the Federal Trade Commission, European competition agencies usually do not need to go to court to stop conduct. Not surprisingly, that gives them a lot more latitude to bring enforcement actions that might be untenable in the United States.

Just a few words about what, until recently, was considered the kryptonite of antitrust, and that’s regulation. A lot of the justification for antitrust is to avoid regulation in the first place. I worked for a lot of people of a lot of parties, and one of my Democratic bosses explained to me a long time ago, he said, “Look, what we’re doing here is we are applying this legal framework to stop bad stuff, which if allowed to continue is going to produce regulation, which would be worse.” Indeed, the whole idea of having an antitrust legal framework that allows for government to stop anti-competitive conduct on a case-by-case basis, is to avoid broad-based prescriptive rules.

Today, government antitrust lawyers around the world, not just in the United States, are actively getting into the regulation business. Federal Trade Commission Chair Khan has written that reliance on case-by-case adjudication produces lots of problems. The head of European Competition Agency has made similar statements, and Europe is actively working on regulation to the technology markets, which will roll out next year. It’s not clear at all, not surprisingly, what regulations will ultimately come out of this, but when the world’s antitrust agencies announce that they are working on rules for various industries, it is certain they are going to get a lot of mail with many suggestions for many companies with strategic interests. To protect themselves, businesses will need to implement political strategies to respond offensively and defensively depending on their interests.

Antitrust, like everything else, it’s not self-executing. A perfect law, fantastic regulations and the best of intentions, just like any other field, they can all go north or south really fast, depending on the actions of real people in the arena. And I think this is why lawyers like me get to keep our jobs.

Questions for Soven

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