Editorial. Decidedly, Joe Biden persists in denying those who saw in his election the announcement of a third Obama term. The pupil has surpassed the master: the latest White House initiative to restore competition in an American capitalism led astray by the concentration of giant companies confirms a daring that the Democratic Obama-Biden tandem had not shown in eight years.
It is about, explained the president while signing the decree, Friday July 9, to clean up an economic system whose evolution, for two decades, ended up penalizing the consumers. “Capitalism without competition is no longer capitalism, it is exploitation, he said. Big players make you pay what they want, change what they want, and treat you how they want. “ The Biden decree, which includes 72 specific measures, instructs federal regulatory authorities to promote competition in their sector; it concerns the practices of airlines as well as those of opticians and hearing aids, those of telecoms and those of diaper manufacturers. The test obviously lies in the implementation of the decree.
We expected an offensive against the omnipotence of the tech giants: Mr. Biden goes further, by attacking the excesses of concentration throughout the economy. The appointment of Lina Khan, a 32-year-old lawyer known for her work on antitrust, as head of the FTC, the Federal Competition Commission, was already a sign. The 78-year-old Democratic president has surrounded himself with a young team capable of leading an offensive on the regulation of the economy, which he wants more fair for consumers. Its initiative on the taxation of multinationals is also part of this approach. On the political level, Joe Biden kills two birds with one stone: he gives pledges to the left of his party and he takes Donald Trump’s populism in reverse by posing as a defender of the workers.
Political influence
The decline of competition in the US economy is the subject of intense debate in academic circles. The Biden decree coincides with the observation of the French economist Thomas Philippon, of the University of New York, who, in his book The Great Reversal (“Le grand reversissement”, 2019, untranslated), explains how the United States ended up abandoning the creed of free competition. Until the end of the 1990s, competition, sometimes fierce, was for the benefit of the consumer, who reaped the rewards in the form of lower prices or an increase in the level of service.
But, over time, the most powerful groups have achieved profitability and a dominant position such that they have formed themselves into lobbies, influencing political power and blocking the way for new entrants to the market. Antitrust legislation has been stripped of its substance. Consumer purchasing power plummeted as air and phone fares exploded.
The European Union has taken the opposite path: the competition authorities set up at the level of the Commission have continued, in recent years, to assert their power against the Member States, in order to preserve an economy. open and competitive to protect the consumer. The Biden administration, finally, is increasingly Europeanized. One more effort: perhaps one day it will open up the American market to European competition?
