Editors’ Briefing: This Week in Political Economy (April 28–May 4)

George Mason University faces controversy over its relationship with donors; the former CEO of Volkswagen is charged in relation to the company’s diesel emissions cheating scandal; and are Google and Facebook already trying to undermine Europe’s new privacy rules?

 

Former Volkswagen CEO Martin Winterkorn. Photo by Volkswagen AG [CC BY 3.0], via Wikimedia Commons

 

  • The long-standing debate regarding the relationship between George Mason University and its donors escalated this week, following the release of documents that showed Virginia’s largest public university had given the Charles Koch Foundation “a say in the hiring and firing of professors.” The university’s president has ordered an inquiry into the matter, days after he responded to protests from student groups by acknowledging that some of the university’s donor agreements “fall short of the standards of academic independence.” Meanwhile, GMU’s faculty has formally asked the school to disclose its donor agreements. The recent revelations, it should be noted, follow years of denials by GMU that its relationship with donors, namely the Koch brothers, is harmful to its academic independence.

 

  • Meanwhile, Bloomberg’s John McCormick reports that Koch-backed groups are spending $20 million to convince voters of the benefits of the GOP’s tax cuts. The reason: polls show only 39 percent of Republicans view the tax law favorably.

 

  • Former Volkswagen chief executive Martin Winterkorn was charged in a Michigan federal court on Thursday with conspiracy and wire fraud for the alleged role that he played in Volkswagen’s diesel emissions cheating scandal. Winterkorn, who resigned from Volkswagen in 2015 after it was revealed that the company tried to cheat on US diesel emissions tests, is the highest-ranking corporate executive charged over the scandal.

 

  • Techlash news: Facebook CEO Mark Zuckerberg announced that the company will design a new feature that will allow users to delete their browsing history. In a meeting with news executives, Zuckerberg also said that the company has already begun to rank news outlets based on “trustworthiness.” How Facebook defines “trustworthiness,” or how it intends to measure it, remains unclear. Axios reports that Facebook is bringing in two outside advisors to conduct a “legal audit of its impact on underrepresented communities and communities of color,” and another to “advise the company on potential bias against conservative voices.”

 

  • Also, Facebook announced a new dating service this week, a move that is already raising questions. WhatsApp cofounder and chief executive Jan Koum is reportedly planning to leave Facebook over its attempts to use WhatsApp’s personal data and weaken its encryption. And UK officials are saying Zuckerberg could face an official summons the next time he enters the country if he refuses to testify before Parliament.

 

  • In The Guardian, John Naughton argues that “Facebook’s global monopoly poses a deadly threat in developing nations,” citing its role in the spread of fake news in Myanmar and Sri Lanka.

 

  • Wired’s Nitasha Tiku: Weeks before the European Union’s General Data Protection Regulation (GDPR) takes effect, are Google and Facebook already trying to undermine Europe’s new privacy rules?

 

  • New York Times columnist James B. Stewart writes about Amazon, “the elephant in the antitrust room,” and the proposed mergers between AT&T/Time Warner and Sprint/T-Mobile.

 

If you haven’t already, read Luigi Zingales’ piece on why the Sprint/T-Mobile merger will likely lead to higher prices and lower quality. 

 

 

  • An excellent New York Times investigation by Evan Hughes into Insys, an opioid manufacturer that made a fortune for itself—and for doctors as well.

 

  • From ProPublica: lobbyists who joined the Trump administration are going back to lobbying. This, despite an executive order signed by the president requiring political appointees to pledge that they will not lobby the agencies they worked in for a period of five years after leaving the government.

 

  • EPA chief Scott Pruitt continues to be raked over the coals over his spending and travel habits: the Washington Post reports Pruitt has been using lobbyists, Republican donors and conservative activists to plan his foreign travels. Pruitt reportedly “drew up a list of at least a dozen countries he hoped to visit and urged aides to help him find official reasons to travel.” His trip to Morocco last December, the Post reports, was arranged by a long-time friend and lobbyist who accompanied Pruitt and his aides and “served as an informal liaison at both official and social events during the visit.” Following these (and many more) recent revelations about Pruitt’s conduct, GQ’s Luke Darby writes that Pruitt “wants the EPA to be his personal travel agency.” A CNN report finds that even prior to his tenure at the EPA, Pruitt paid himself nearly $65,000 in reimbursements from his campaigns for Oklahoma attorney general.

 

  • Meanwhile, three senior aides to Pruitt resigned from the EPA this week. An oil refinery owned by billionaire Carl Icahn, worth $21 billion, received a “financial hardship waiver” by the EPA that would save it millions in costs related to the US Renewable Fuel Standard (RFS) program. For an illustrated presentation detailing “Scott Pruitt’s disastrous tenure at the EPA,” see the Washington Post.

 

  • From David Dayen in The Nation: “political corruption is ruining everything, but we can fix it”

 

  • From CNN’s Lydia DePillis: a California Supreme Court ruling could make it more difficult for companies like Uber and Lyft to treat their drivers as “independent contractors” instead of as employees.

 

Chatter from the Ivory Tower

 

On the occasion of both International Workers’ Day and Marx’s bicentennial, a selection of links for your weekend reading:

 

  • Reason observed Workers’ Day in contrarian style with Ilya Somin of George Mason University renewing his call to dub May 1 “International Victims of Communism Day.”

 

  • In the New York Times, Jason Barker of Kyung Hee University linked so-called identity with traditional class-based political struggle: “Racial and sexual oppression have been added to the dynamic of class exploitation… Such movements recognize, as did Marx, that the ideas that rule every society are those of its ruling class and that overturning those ideas is fundamental to true revolutionary progress.” The Federalist retorted that the NYT op-ed was “beyond parody.”

 

  • The Economist tells rulers of the world, “Read Karl Marx!” His diagnosis of the flaws of capitalism, says the newspaper, is “surprisingly relevant.”

 

  • In the Boston Review, Marshall Steinbaum of the Roosevelt Institute says today we know that one of Marx’s basic assumptions—“that power cannot be sundered from capital”—is wrong.

 

  • Branko Milanovic of CUNY offers an overview of Marx’s intellectual contributions using a counterfactual approach.

 

  • Joe Humphreys at The Irish Times interviews Peter Singer ahead of the release of the second edition of the latter’s Marx: A Very Short Introduction, where Singer writes: “Marx’s influence can be compared to that of major religious figures like Jesus or Muhammad.” In Project Syndicate, Singer expands on the subject.

 

  • For Australia’s ABC News, China correspondent Bill Birtles reports on Chinese president Xi Jinping’s attempt to revive the status of Marx within the country’s official ideology of “socialism with Chinese characteristics.”

 

  • Meanwhile, in Trier, Germany—Marx’s birthplace—China’s gift of a 5.5-meter statue of the notorious political economist has incensed and perplexed some residents, according to the South China Morning Post.

 

Stigler Center Goings-On

 

In the latest episode of the Capitalisn’t podcast, “Mo Crypto Mo Problems,” Luigi Zingales and Kate Waldock dive into the volatile, largely unregulated market of cryptocurrencies and consider creating their own ICO.

 

Disclaimer: The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy.