As in prior moments of contestation, we are starting to hear the argument that America must protect its domestic monopolies to ensure we stay ahead on the global stage. Rather than double down on promoting free and fair competition, this “national champions” argument holds that coddling our dominant firms is the path to maintaining global dominance.
We should be extraordinarily skeptical of this argument and instead recognize that monopoly power in America today is a major threat to America’s national interests and global leadership. History and experience show that lumbering monopolies mired in red tape and bureaucratic inertia cannot deliver the breakthrough technological advancements that hungry start-ups tend to create. It is precisely these breakthroughs that have allowed America to harness cutting-edge technologies and have made our economy the envy of the world. To stay ahead globally, we don’t need to protect our monopolies from innovation—we need to protect innovation from our monopolies. And one of the clearest illustrations of how consolidation threatens our national interests is the risk monopolization poses to our common defense.
A basic tenet of the American experiment is that real liberty means freedom from economic coercion and from the arbitrary, unaccountable power that comes with economic domination. Our antitrust laws were passed as a way to safeguard against undue concentration of power in our economic sphere, just as the Constitution creates checks and balances to safeguard against concentrated power in our political sphere.
Lina M. Khan
I haven’t been terribly impressed by Lina Khan’s ideas of antitrust at first, but I have to say that she seemed to be doing a good job as FTC chair during the Biden administration – as evidenced by the alarmed reactions of tech CEOs. The example she cites in this speech – Boeing being crowned ‘national champion’ and allowed to eliminate its domestic competition – is quite relevant, given the numerous issues the company has faced recently, which have been linked to decreasing quality and cost cutting through offshoring.
Alas, we already know how this story turned out: during last year’s presidential campaign, wealthy donors rallied against her, annoyed at the increased scrutiny of their lucrative deals, and Kamala Harris, lacking leadership and vision, sided with these business interests to secure their support. Ironically, it was JD Vance from the Republican side who spoke in Lina Khan’s favor. After Trump won the election, she resigned, as her term at the FTC had already expired, and some of her measures are already being dismantled. And, as expected, the new Trump administration is even more eager to promote the interests of American big business, especially those who contributed to his campaign, above all else, be it US laws, the well-being of American citizens, or other countries around the globe.
Despite being scorned by the rich and powerful, antitrust scrutiny got some vindication last week when Figma went public. Its shares soared from an opening of $85 a share and closed at $115.50, more than triple the company’s IPO price, giving it a market value of almost $68 billion. For context, Figma had an acquisition offer from Adobe back in 2022, which never materialized and was called off a year later – though the regulatory pressure came from the European Commission and the UK Competition and Markets Authority, not from US agencies. Compared to the potential Adobe offer at $20 billion, investors made almost triple the returns from the IPO instead, thus supporting the argument that smaller, independent companies deliver better stock market returns than big conglomerates formed through mergers and acquisitions.
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