Concentrated Power Is Always a Dangerous Phenomenon

Jon Schweppe, Last weekend, Andy Smarick, a senior fellow at the Manhattan Institute, wrote an aspirational Twitter thread where he argued that conservatives need to do a better job at making the case for decentralized state power. “I see a natural, unavoidable connection between a powerful centralized state and dangerous long-term outcomes. Others don’t see that connection. I need to make that case.”

Smarick is mostly correct about the dangers of concentrating power around the state. But what about concentrated corporate power? Should we limit the regulatory powers of the state to the point where we are left completely defenseless, subject to the whims of iconoclastic oligarchs and multinational business interests? This is, perhaps, where Smarick and I part ways. There are a number of important reasons for the state to take a more robust role in addressing the threat of concentrated corporate power.

First and foremost, consumers face significant harm due to limited competition in various markets. While politicians often evaluate consumer harm solely by focusing on whether a market leader is unfairly driving prices higher, there are other important factors to consider. One such factor is the phenomenon of reduced innovation — clearly something a free and fair market should try to avoid. Market leaders will often collude to erect significant barriers to entry, ensuring as little competition from innovators as possible. If a long-term threat to market share emerges, market leaders will often gobble up the smaller competitor, or copy their products, in an effort to maintain their stranglehold. See: Facebook, and Instagram. Facebook, and WhatsApp.

Another concern is that of product degradation, which happens when a market leader uses their power to prevent consumers from accessing better products. One of the more high profile cases of product degradation began ten years ago, when Google began to use its search engine dominance to steer consumers toward some of its other products, such as customer reviews. This took business away from competitors like Yelp, despite the fact that Yelp reviews were widely respected by consumers searching for a specific product or service, while Google reviews were often unhelpful and of low quality.

While consumer harm should be what gives rise to antitrust enforcement, the topic du jour in Washington these days, there are other serious concerns about concentrated corporate power that should provoke policy responses from conservatives both at the federal and state level.

Last Friday, Republican Governor Kristi Noem vetoed a bill that would have protected women’s sports in the state of South Dakota. Noem has dealt with significant backlash from the Right over this veto, but she managed to avoid what she obviously felt was the greater threat: the power of moneyed interests like the Chamber of Commerce and the largest online retailer in the country, Amazon, which happens to have tremendous economic leverage over Noem — the company plans to create 1,000 jobs in the state by building a fulfillment center in Sioux Falls next year. According to reports (and the suspicions of Republicans on the ground in South Dakota), Amazon may have played a significant role in Noem’s decision to veto the bill.

This corporate bullying — and Republican fear of corporate bullying — is nothing new. We saw it with the Religious Freedom Restoration Act bills in Arizona in 2014 and Indiana in 2015. We saw it in North Carolina in 2016 with the so-called “bathroom bill” that protected women in private spaces. And because of these high-profile boycotts and pressure campaigns that ultimately succeeded in their objectives, we continue to see it, even in red states, where many GOP governors quietly encourage legislatures to avoid controversial “social issue” bills because they fear economic reprisal.

The solution, of course, is to fight back against this ideological tyranny from woke corporations with policy reprisals of our own that discourage corporate activism. Georgia did this brilliantly in 2018 when they famously took a tax break away from Delta Airlines after the company publicly cut ties with the National Rifle Association. As reactionary as the move may have appeared at the time, Delta is now conspicuously absent from the debate around Georgia’s election reform bills, despite left-wing activists demanding the company engage the process.

Republicans should consider policy reprisals against Big Tech companies as well. Gov. Ron DeSantis (R-Florida) appears to be leading the way in that regard at the state level. In February, he promised to pass a series of legislative proposals that would go after Big Tech companies for their unscrupulous data collection and censorship. And Republicans in Washington, because of the leadership of heterodox thinkers like Sen. Josh Hawley (R-Missouri), have slowly but surely adopted the position of reforming Section 230, the controversial statute that provides tech companies with immunity from civil liability for content posted by users on their platforms.

Today, a House Subcommittee will hear from three Big Tech CEOs about the need to crack down on “misinformation.” (We used to call that “speech.”) If the power of these Big Tech companies wasn’t so concentrated, no one would care. But because these companies have such a stranglehold on the free flow of information — and indeed on our democracy itself — these hearings become must-see TV. Isn’t that the existential threat conservatives should be focused on addressing?

Jon Schweppe is the director of policy and government affairs at American Principles Project. Follow him on Twitter @JonSchweppe.

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