Chillin'Competition

As some of you may remember, a few months ago I wrote a post here on “Antitrust and Political Stupidity“. Competition Policy International asked me to develop the post for a special issue of the Antitrust Chronicle, which I did one-handedly during my extended Christmas break (the paper is available here). I was then asked to do a follow-up interview with CPI; the interview was published today (click here for the version in CPI’s web).

Asked about whether I was being too optmistic in the paper, I started my response saying that “my paper was written during the Christmas break, and it is not much more than a Christmas tale, a superficial exercise of wishful thinking” (see below for the complete answer). Little did I know that the mailing that was sent today to some thousands of people would summarize the interview saying that: “Lamadrid says his paper is ‘a superficial exercise of wishful thinking,’ and he tells CPI why“. So, here I am, promoting my work by saying that it’s really not any good (between us: it’s not a masterpice, but it’s somehow original and maybe not as crappy as my own quote suggests…). Man do I really need to work on my self-selling skills….  😉

If anyone’s interested, you can click here to read the full interview:

Question – Your paper Antitrust and the Political Center details your optimism over the incorporation of antitrust in economic policy will lead to central-logic, as opposed to radical left- or right-winged approaches. You note the publications that emerged at the end of last year calling for this trend – which countries, politicians, companies, etc do you see as key players in the US and around the world to implement this trend?

Answer- The most honest response is that I have no clue. What is clear is that this is a task for public actors, not private ones. But it’s impossible to single out particular countries, forsome may implement centrist agendas in certain areas to the exclusion of others. Subject to this caveat, Mexico and India are, to name two, some of the countries where I would expect centrism to have a growing influence. With regard to politicians, I would argue that Obama is a radical centrist –at least in the light of EU standards, I’m aware that some Americans will refute it-; Mario Monti is another example of a “politician” that was implementing centrist policies.

Question-  While you back-up your claims that centrist logic would lead to more logical economic polity, isn’t it true that some times a left-wing or a right-wing approach to economic policy is what is most “logic”? In what specific situations have you seen economic policy lean left or right when it should have had a different outcome?

Answer- The piece is constrained to antitrust law and enforcement –which is one particular tool of economic policy- and therefore only addresses the implications of the political goals underpinning this particular policy. It does not address how other policies need to be chosen in other settings alien to antitrust. What I posit is merely that the goals pursued by antitrust law strike a reasonable, centrist, balance between respect for market forces and State intervention, and between short-term economic efficiency and equality of opportunities.

In any case, and moving to a broader context, the question reveals that by constraining the piece to the antitrust domain I may have failed to articulate necessary wider views on what I qualify as political centrism. Certainly there are situations in which policies associated with either the right or the left may be the most effective.But political centrism, in my view, stems precisely from the flexibility to be able to pick the best approach in each situation, regardless of Manichean left-right labels. It might appear as a contradiction, but I do not think that centrism is about being always in the middle between right and the left; it’s rather about being free from ideological preconceptions at the time of choosing the solution considered to be the best. Centrism is understanding that there are worthy values in both left and right.

Question- Antitrust, as you mention, is often seen as an incredibly complex area of interest. How important would you say it is that economists and those who shape economic policy be experts in antitrust as well?

Answer- My point is that antitrust appears as a complex –or rather nebulous- area of the law to the uninitiated. But let’s be clear: what we do is no rocket science.

How important is it that politicians and those shaping economic policy are antitrust experts? Pretty unimportant.  Actually, I wouldn’t entrust almost any of the antitrust lawyers I know with the task of shaping economic policy!   😉

What is important is that those shaping economic policy commit to pursuing not only efficiency and not only equality; that they respect and value, but not worship, market forces, and that they respect and value, but not worship, public intervention. Those shaping economic policies should strive to reconcile the two. How is this done? If I knew I would be a politician and not an antitrust lawyer. What I believe, as an antitrust lawyer, is that the principles and rules underlying antitrust law reasonably balance those two objectives (to be sure, there are oscillations, but even these take place within reasonable confines).

Question- While you often note in your paper that you are “optimistic” about this trend, realistically, at what rate do you see this trend being implemented? Is this trend more important for the US, or can it/should it be implemented around the globe?

Answer- My paper was written during the Christmas break, and it is not much more than a Christmas tale, a superficial exercise of wishful thinking. But Christmas wishes sometimes come true (sorry, I saw the movie “Ted“ last night and I guess I’m typing under its influence :). Frankly, I cannot make a prediction on how centrism might expand to other economic domains through the Trojan horse of antitrust law. The main progress, however, has already been made. The mere adoption of antitrust rules in most nations in the world already reveals that there’s a wide belief in the virtues of market forces and in the virtues of exercising a control of such forces based on economic experience and pre-defined legal criteria. That’s already something.

Question- Looking ahead, which issues do you feel have the most dire need for centrist policy, and therefore for an antitrust perspective?

Answer- There are issues that have a dire need for centrist policy, but that does not necessarily mean that they need an antitrust perspective. What they need is a conciliation of objectives similar to the one that has operated –hidden below the technical surface- in antitrust for almost a century, and that has resulted in a fine balance.

Government spending in Europe is a clear issue. There’s a false and harmful debate between partisans of austerity, on the one hand, and increased public spending, on the other. Both are right and both are wrong because both are simplistic. What you need is smart public spending (identifying what’s smart is of course hard, but that’s no excuse to resort to simplistic alternatives). Fiscal policy in the US is probably a comparable domain, where false dichotomies and simplistic positions dangerously prevail. Taxation in general has already advanced along centrist lines, but not in all places and not in all situations. Education is another absolutely fundamental domain where my conception of centrism –based not on substantive equality, but on procedural equality or equality of opportunities- would be most needed.