Discover the discoordination and conflicting interests within government and how it impacts the war against Big Tech. Find out why the private sector may offer a better solution.
Outside of voluntary association, discoordination abounds. Rather than planning being predicated on consumer satisfaction, involuntary association involves many parties working against one another for a variety of conflicting goals, as Mises calls it, a “clash of group interest.” A man who sells his television to another is benefitted in conjunction with the buyer while the thief who steals a television benefits only himself at the expense of the victim of theft.
Likewise, in government, which is made up of a plethora of agencies, departments, and political subdivisions, government agents often hold contrary, competing interests. A comical example (although not entirely accurate) is the story that pops up once in a while in everyone’s social media of CIA-backed Syrian militias fighting those backed by the Pentagon. It is true that the Pentagon and the CIA lack a real incentive to coordinate their ends and efforts; that is why this story is so believable.
Less absurd examples of this are of no shortage. Antitrust suits against big tech companies are exemplary. The Federal Trade Commission (FTC) went after Microsoft in late 2022 and the Department of Justice (DOJ) sued Google in January 2023. The problem with this is that these two lawsuits are in a sense contrary to one another. Microsoft and Google are direct competitors; to attack the monopoly of one enhances the monopoly of the other.
The FTC went after Microsoft for their supposed monopolistic practices in the video gaming industry (I question the legitimacy of this here). However, Microsoft’s influence does not stop in video gaming. Microsoft is also the owner of MS Word, PowerPoint, and Excel, which are some of the biggest office computer applications. The only notable competitor is Google, with their free services such as Google Docs, Slides, and Sheets. In a turn of fate, the DOJ announced a suit against Google for monopolizing internet ad space, which is one way they provide so many free products.
It is definitely feasible for the government to isolate monopolization in specific industries, such as video gaming or ad space. However, monopolization depends on how one defines the market. If defined as videogames, the government is not directly enhancing Google’s position when they attack Microsoft for monopolization. But, if the market is technology in general, then the changes in relative market power of each of these companies becomes questionable.
When the different government agencies and departments choose to attack Big Tech, oftentimes their antitrust actions will overlap and contradict. Microsoft and Google certainly compete in many markets. Even the actions against Microsoft’s monopolization in industries Google is disinterested can help Google and vice versa. This way antitrust action cuts down on profits through legal fees and compliance costs, representing potential lost reinvestment capital.
Additionally, antitrust action against one company can alter a variety of markets, potentially enhancing the monopoly status of a host of companies. Apply that same logic to the 242 antitrust cases filed in 2022 alone and you can only imagine the market distortions created this way. The audacity of the bureaucrats is the implication that in every antitrust action they know how the monopoly status of each distant business will be affected. This is just foolish.
In the aforementioned case, the FTC and the DOJ are negating progress on each of their respective policy goals. One attacked the alleged Microsoft monopoly while the other enhanced Microsoft’s monopoly. And sadly, antitrust is just one example where this occurs. I imagine that it would be impossible to conceive of how many times government agencies contradict each other on a daily basis.
Again, this reveals the inherent contradiction in the war against Big Tech that FTC chair Lina Khan is waging (Ironically, the one company she wanted to go after, Amazon, has not been subject to serious scrutiny during her time as chair). Big Tech is a collective of companies that span a multitude of industries. Going after one directly undoubtedly benefits another tech giant. Action after action will be taken, but every action will be guaranteed to have a winner and a loser amongst the very companies that Khan intends to take down.
This is indicative of a tendency of bureaucrats and activists to look at the economy as a collection of distinct and disconnected groups. They think that they can alter one area of the economy without also tampering with another; this is in vain. There will always be unintended consequences. Government interventions will always work against the goals of government officials in some way or another.
The only way for the bureaucrats to escape the problem is to simply ignore the negative or counterproductive effects of their policies. Unfortunately, this is too easy. To remain in power, bureaucrats simply have to show evidence that they were doing something, anything, that remotely seems like it is connected to the common good. The efficacy of their actions is immaterial.
Government is an institution in discoordination. Nothing will fix this but the relegation of government services to the private sector where the forces of profit and loss can regulate affairs according to consumer desires rather than the arbitrary whim of bureaucrats.
Benjamin Seevers is a senior economics major at Grove City College. He is currently a student fellow with the Institute for Faith and Freedom. His research interests include private governance and public policy.
Source: https://austriancenter.com/the-counterproductive-antitrust/
