“A Slow, Creeping Consolidation of Power by Big Money Over Think Tanks in the United States”

Following his ouster from New America, antitrust scholar Barry Lynn talks to ProMarket about academic capture and the power of digital platforms like Google.

 

 

Barry Lynn

Over the past seven days, Barry Lynn has been called a “pre-eminent scholar” on antitrust in The New York Times and “probably the most prominent and influential voice about the importance of monopolies today” by Vox, a “ferocious and influential critic of ‘platform monopolies’” (The Atlantic) whose influence in raising concerns about the market dominance of digital platforms like Google “is difficult to overstate” (The New York Times, again).

 

The impetus for this massive wave of support has been the ouster of Lynn and his entire team from their longtime perch at New America, after their repeated criticism of Google reportedly raised the ire of Eric Schmidt, chairman of Google’s parent company Alphabet who also served as chairman of New America until 2016 and is one of its main funders, along with Google itself. 

 

For the past 15 years, particularly since he became the head of New America’s Open Markets program, Lynn has been one of the most prominent voices warning of America’s growing concentration problem, particularly in regards to the dominance of digital platforms. As public and political interest in antitrust experienced a revival in the past two years, culminating with Democrats’ embrace of tougher antitrust enforcement as part of their Better Deal agenda, Lynn became “the primary intellectual mover” behind the resurging antitrust movement, according to Vox.

 

Lynn’s firing has been widely covered as evidence that Lynn and his team had been right in their repeated warnings of how the growing economic and political power of digital platforms might adversely affect intellectual freedom. 

 

The firing, and the subsequent uproar, has hurt the reputation of New America and its management, now seen by many as willing to sacrifice the integrity of their research for fear of angering their funders. But it also revealed the pressures many other U.S. think tanks are exposed to as they seek more corporate funders. Concerns that corporate funding might imperil independent research, as Marshall Steinbaum noted in The Guardian, are not new. In 2013, Luigi Zingales [Faculty Director of the Stigler Center and one of the editors of this blog] argued that economists are vulnerable to capture by corporate interests, same as regulators. Think tanks, as New America President Anne-Marie Slaughter acknowledged herself, have to deal with “unavoidable tensions the minute [they] take corporation funding.”

 

Following his departure from New America, we interviewed Lynn about digital platforms and think tank capture. The following is a transcript of our conversation, condensed for length and clarity:1)New America did not respond to repeated requests for comments.

 

Q: When you started to really focus on concentration, around 2011, how did the leadership at New America react?

 

New America was a fantastic think tank. The work that I did, I can’t imagine having done it anywhere other than New America. New America was a really unique place. There were a number of things that were unique about it: One, it didn’t take corporate money; two, it didn’t take foundation money, if that foundation money had major strings attached that would put restrictions on people who were already inside; three, it had a different philosophy about the relationship between the expert and a journalist.

 

Traditional think tanks are based around the idea that you bring in experts, and you try to teach them how to write, or you try to teach them how to sort of tell their stories to journalists. What the people at New America said—people like Ted Halstead, Michael Lind, Steve Clemons, and Sherle Schwenninger—is “You know, what if we’re gonna reverse this and bring in the people who know how to write, the best and brightest young journalists, reporters, thinkers, and teach them how to do policy, how to see themselves as people promoting policy solutions to real world problems.” It made the place very vibrant. We immediately got all this traction. People paid attention to us.

 

None of these people had come out of economics academies. They really didn’t come out of hardcore legal training. These were journalists, free thinkers, people using their common sense, so the kind of constraints and restraints that you would find in other think tanks didn’t exist in New America. There were really no traditional intellectual restraints or traditional financial restraints. I was there for 15 years and had nobody really in my business for almost every day of that time.

 

Q: When did you first notice that not everyone was happy with your focus on concentration?

 

The first time I actually had any real serious blowback because of work we were doing was in June, 2016. It was the event in which Elizabeth Warren delivered her speech on monopoly.2)Full disclosure: Guy Rolnik was one of the featured speakers in that event. In the run up to that event, the leadership at New America became very concerned about the fact that some of our work was focused on Google, and they asked us to maybe add different people to the panels, to frame panel discussions in different ways, to give them a heads up, to let other organizations have a say in what we’re doing. That had never happened before and it was very clear that it had to do with Google. Because we’ve done events in which we’ve really hammered Wal-Mart or Anheuser-Busch or Amazon, and there were no problems. But that event, it was the fact that we were mentioning Google by name that got people really upset.

 

Q: And you were aware of the fact that Google is a big donor to New America?

 

For years, we took very little money from corporations. What I really liked about New America is that it incorporated the idea that you have to keep systems resilient, to make sure that you have many sources of funding so we don’t become overly dependent on any one source. We want to be able to say anything even if it offends a funder who then walks away.

 

Until Anne-Marie [Slaughter] came along there wasn’t ever a real focus on raising from corporations. Eric Schmidt had been on our board for a long period of time. In fact, when I joined, Eric Schmidt was already on the board. Google was a small corporation back then. When he took over as chairman of the board in 2009, he was the CEO and chair of a very powerful corporation. But even then, we didn’t really get a huge amount of cash from those guys. He gave us some money, but we still raised most of our money from foundations. It’s really only been in the last few years that we’ve seen corporate donations go up substantially.

 

Q: Was Google the only donor that complained about your work in New America?

 

I’m sure there were other people complaining about our work, but from what we can tell, the only complaints that really mattered were those from Google. In 15 years at New America, basically doing the same work, I only had problems twice, and in both cases, it was when we held events where we spoke about Google specifically.

 

Q: It is very rare that pressures on think tanks, newspapers, or academic researchers, either by corporations or government entities, leak out. Usually both sides prefer to keep it quiet. Why did you decide to go public?

 

Most of the time, this stuff doesn’t get brought out because there’s a forward-looking fear. “Let’s not upset this person now, because they’ll have the ability to harm me tomorrow.”

 

In our case, the connection between our work on Google and the decision to kick us out was pretty straight-forward. We were faced with a decision that put our work at risk and put us personally at risk. When we were given two months to leave, we had two potential paths forward: one was I’d come to some kind of accommodation with New America, and the other was bring this out to the public. We wanted to have both options on the table, depending on how the negotiations developed. One thing that was really non-negotiable was that we would not accept any kind of agreement that would result in the potential for people to perceive our work differently—the work is simply too important.

 

Ultimately, it came down to us feeling that it was important to get the story out. This was our work, this is what we had been doing, we had studied the patterns, so we were able to place it in context. We had the contacts and the context necessary to work constructively with our funders through the process of moving out, and had a reputation on this issue that meant people would take us seriously.

 

A lot of other people, when this happens, don’t have an existing profile that would allow them to bring it to the press in a way that the press would believe them or care.

 

Q: In your case, you benefited from the attention. Would you agree that in most cases, people who go against large corporations that employ or fund them risk being blacklisted in the job or financing market?

 

Absolutely. The fear of somebody with monopsony power, of someone who controls the gateway to the marketplace, affects both individuals and corporations. I have written a big piece about the growth of fear in the U.S. in Harper’s in 2012. I’ve talked to really important people who were on top of the world, who at the end of the day are afraid every day because someone controls their access to the market place, someone controls their destiny.

 

It’s one of those things that help to illustrate how monopolization is not just robbing people of their liberty or allows the few to buy candidates and policymakers and subvert democracy. It’s also an autocratic system of control within the political economy that results in a change of behavior among many of our most important leaders—people who are the heads of companies. It creates a hierarchical system of command in which someone higher up than you has the ability to cut you off, destroy your career, either in the near or long term.

 

In Silicon Valley, where we see the rise of giant companies that handle all the hiring and firing decisions from the outside, it’s actually become much easier to blacklist people. We have created centralized databases that allow industries as a whole to blacklist the individual.

 

Q: Was your decision to come out publicly related to the knowledge that you have donors that will back your new think tank?

 

There were a couple of really good breaks that fell our way that made this easier to do, but even for us, with the advantages that we might have had, this was hard. Our funders were extremely supportive, but there are still cash flow issues that we have a plan to work through. Frankly, had this happened a year ago it would have been harder, and had it happened two years ago it would have been much harder. Our public profile had grown quite a bit, with our work noticed and embraced by important people.

 

Q: How much freedom do U.S. think tanks today have to study policy solutions that might affect corporations?

 

I would say that before our expulsion from New America, what we were seeing was a slow, creeping consolidation of power by big money over think tanks in the United States, and a slow, creeping consolidation of power by big money and big corporations over parties in the United States. The creeping consolidation over parties actually began to break up somewhat last year, especially after Trump’s election, when a lot of the existing structures within parties began to fall apart. But in the think tank world, the basic approach that had been in place for the last number of years continued in most places.

 

The general thing that we’ve seen is that most researchers will not name individual corporations. But New America had shown for many years that you could do a great job while criticizing particular corporations.

 

Q: Are there other think tanks that do that?

 

If we go back some time, we’ll find Public Citizen. Public Citizen used to do that in a very effective way, though maybe not in an ideologically cohesive way. It achieved a lot of good, while also creating some bad, back in the ’70s and ‘80s. And to the extent it’s still around, it retains that culture.

 

Q: Do you think that there are think tanks that do the opposite, that help corporations steer debate in their favor?

 

There are probably some think tanks that exist just to serve corporations, but I think that actually, you have to look at how each individual researcher is funded.

 

There are interlocking aspects to this, as our experience at New America shows. I was perfectly happy to lose my funding from the Schmidt Family Foundation. We created a resilient system, and we can live without that money, if need be. That was our goal.

 

But then what happened is, pressure came on me from other people at New America, who did not want to live without Google funding.

 

I think it’s more of a slow-motion subversion, where people will sort of establish an institution to achieve a certain end, and usually that end is laudable, but over time, outside groups will establish footholds within the organization that give them a greater or lesser amount of influence over the actions of people within the organization.

 

Q: Do you see similar phenomena in academia, among economists?

 

In some ways, it may be worse in academia, in the sense that the public has now learned, to a very large degree, to take whatever an expert at a think tank says with a grain of salt. The idea that the economics departments at specific universities would essentially be as controlled by corporate interests as the people in think tanks, I don’t think the public is as aware of that problem as it is of the problem of think tanks.

 

Q: If you hadn’t criticized Google, do you think you could have stayed in New America?

 

I think had we really never mentioned Google, had we continued to just go after other large problems in other sectors of the economy, we would probably still be there.

 

Q: How does the political power of Google and other digital platforms compare to the political clout of Wall Street banks?

 

Concentrated finance and concentrated corporate power are two parts of the same problem. Money exercises its power in the real world through corporate concentration, either through the creation of corporate monopolies or cartels. You can’t really separate the two.

 

But there are also different classes of corporations, different sectors that because of technological issues may end up with control over other sectors. Ten or fifteen years ago, if you looked at the world, you saw a real concentration of power in, say, Wal-Mart, and you saw a real concentration of power on Wall Street. But now there’s been a technological revolution, and what we’re seeing is the rise of the super-giants: Google, Amazon, Facebook, and to a lesser extent Apple and Microsoft.

 

These companies, because of their nature, because they’re kind of fundamental to the business of so many other companies, they, at least to my eye, appear to pose a much bigger threat to our political and economic well-being than big banks or other concentrated industries.

 

Q: The story of your ousting from New America received widespread media coverage. What impact do you think this might have on your campaign against concentration?

 

I think it’s a great sign. I think that the event that [the Stigler Center] hosted in Chicago in March was a clear sign that we are at a tipping point.

 

Before our event, we’ve seen this growing interest among policymakers. There was Elizabeth Warren’s amazingly important speech; we saw Senator [Chuck] Schumer and leaders within the Democratic Party come out with this Better Deal, which showed they recognized that concentration of power is really bad for the United States, economically and politically, and made it one of their primary targets of economic reform.

 

This event, us being booted out of New America, had caught people’s imagination and sort of captured the fears that people have been building up about these issues. We’re really quite surprised by how much attention we’ve gotten. But even so, it’s not really surprising, because it is building upon all of this awakening that’s been taking place for the last two years in America.

 

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 those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy. 

References   [ + ]

1. New America did not respond to repeated requests for comments.
2. Full disclosure: Guy Rolnik was one of the featured speakers in that event.

One comment

  1. This article raises the following questions:
    1. Does the University of Chicago have a written policy concerning donor influence on academic writings?
    2. If so, who is responsible for monitoring compliance and who is responsible for adjudicating potential conflicts?
    3. Is there a system, similar to a corporate whistle blowing program, for reporting alleged violations?

    I can think of nothing that could damage the University’s reputation more than some instance of an individual or corporate donor inappropriately influencing academic output.

Leave a Reply