Antitrust vs. Competition | This Week's Economy Ep. 153
American technology leadership depends on evidence-based antitrust and market dynamism.
Hello Friends!
The U.S. is a global leader in technology and innovation. That didn’t happen by chance. It happened because our economic institutions have historically emphasized decentralized decision-making, strong property rights, capital formation, and competition on the merits.
In recent years, antitrust enforcement has drifted away from economics and toward structural and precautionary theories that treat scale, integration, and market success as presumptive harms. Some of this shift mirrors Europe’s regulatory approach, and troublingly, the impulse to move in this direction is becoming bipartisan. The danger is that we abandon evidence-based competition policy, raise error costs, chill investment, and weaken long-run growth—at the very moment American firms are competing most intensely with China.
In This Week’s Economy, I explain how we got here, what’s at stake for America’s leading tech firms, and what policymakers should do to ensure we defend competition without undermining the innovation that keeps America ahead. Check out my latest report, co-published with NetChoice, on choosing Innovation over Interference.
Tune in to the full podcast episode on YouTube, Apple Podcast, or Spotify, and visit my website for more information about my work at Ginn Economic Consulting.
HOW WE GOT HERE
For most of the post-WWII era, U.S. antitrust policy reflected an understanding that competition is dynamic—driven by entry, innovation, and Schumpeterian creative destruction. Enforcement centered on the consumer welfare standard, protecting consumers from demonstrable harm, and evaluating market power using economic evidence rather than subjective measures such as size or concentration.
Under the Biden administration, however, enforcement shifted toward structural and precautionary theories that treat scale, integration, and market success as presumptive harms, echoing Europe’s Digital Markets Act and Digital Services Act. Today, a growing bipartisan coalition—including some voices aligned with the Trump administration—risks repeating these errors for different political reasons, from industrial policy to protectionism.
Meanwhile, China is pursuing a state-directed strategy to dominate artificial intelligence (AI), biotechnology, and advanced communications through subsidies and centralized coordination. Weakening U.S. firms through regulatory overreach doesn’t strengthen competition—it advantages state-backed rivals.
Why is building an antitrust model based on competition so important? Let’s explore.
1. The American Antitrust Model: Free Markets, Free Speech, & First Principles
The Principles:
What makes the American antitrust model distinct is its recognition that markets are dynamic processes—not static end states. Competition isn’t defined by how many firms exist at a given moment, but by whether people are free to enter, exit, invest, and innovate over time. Enforcement has historically focused on economic harms, while leaving speech disputes to other legal frameworks.
Why it Matters:
Why the Consumer Welfare Standard Matters
At the core of this model is the consumer welfare standard—evaluating conduct based on measurable effects on prices, output, quality, and innovation. Firms often achieve scale not by suppressing competition, but by serving consumers better. Size can reflect efficiency and innovation, not market failure.
Free Markets and Free Speech
In digital markets, free markets and free expression are linked. Platforms compete on user experience, policies, and standards—not just price. Using antitrust law to resolve speech grievances conflates economic power with cultural or political influence. That risks turning competition policy into content regulation. The American model has wisely avoided this by limiting antitrust to economic harms.
Reaffirming First Principles
Competition policy works best when it is disciplined and evidence-based. Protecting competition doesn’t require punishing success or engineering market structures. It requires preserving the conditions for entry, experimentation, and investment. Reaffirming first principles isn’t ideological—it’s grounded in economic evidence.
Related Viewing: Listen to my conversation with Tirzah Duren on the consumer welfare standard, and how AI and content moderation intersect with politics, tech, and personal freedom.
2. Economic Stakes of America’s Top Tech Firms
The Principle:
When policymakers aim to break up, shrink, or structurally handicap America’s largest tech firms, the costs don’t stop at corporate balance sheets. They show up in capital investment, domestic production, high-wage jobs, retirement savings, and America’s strategic position in global technology markets.
Why it Matters:
Scale and Infrastructure
The U.S. is in the middle of a historic private-sector buildout of AI and data infrastructure. If antitrust enforcement becomes politicized, retroactive, or structurally punitive, it raises regulatory risk and lowers expected returns. That slows investment. Infrastructure scarcity can also function as a barrier to entry, favoring firms with deeper balance sheets and discouraging new competition.
Jobs and Domestic Production
These firms are also building advanced manufacturing capacity in the United States. For example, Amazon’s Project Kuiper facility in Washington manufactures and tests satellites for a U.S.-led broadband network. Projects like this create demand for engineers, technicians, and domestic suppliers.
American Investors
Millions of Americans own shares of these companies through retirement accounts and index funds. Sound antitrust policy should protect consumers from demonstrable harm, not reduce prosperity by design.
Related Reading: My 2025 report outlines a better path for antitrust policy grounded in economic evidence and long-run growth.
3. What is Constraining Competition?
The Principle:
Competition in technology markets doesn’t fail because firms grow large. It fails when entry, expansion, and experimentation are blocked. In artificial intelligence and advanced computing, the most binding constraints today aren’t antitrust loopholes—they’re infrastructure bottlenecks. AI is an input-intensive, general-purpose technology. When those inputs are scarce or delayed, competition is distorted no matter how aggressively antitrust law is enforced.
Why it Matters:
Infrastructure, Not Antitrust Gaps
The real constraints on competition are energy availability, data center permitting, grid capacity, and transmission delays. When infrastructure is scarce, only the largest firms can absorb the costs and uncertainty. That reduces entry and limits competition—regardless of enforcement posture.
Permitting Is Competition Policy
Lengthy and unpredictable permitting raises fixed costs and slows deployment. Faster, more predictable permitting expands supply, lowers costs, and enables more firms to enter and scale.
Remove the Bottlenecks
Markets should determine which firms succeed or fail. The government’s role is to maintain stable rules, focus antitrust enforcement on demonstrable consumer harm, and remove infrastructure barriers that block entry and expansion.
Related Reading: I’ve written about why infrastructure and energy investment are central to America’s AI and technology leadership.
4. Lessons from America’s Competitors
The Principle:
Europe’s approach to technology regulation makes this clear. Policymakers there have embraced the precautionary principle—favoring preemptive control over after-the-fact evaluation. In theory, it prevents harm. In practice, it replaces market discovery with administrative judgment and shifts decision-making away from consumers and investors. China offers a different but equally important lesson: how state-directed industrial policy can exploit regulatory weakness abroad.
Why it Matters:
Europe’s Precautionary Model
Europe adopted ex ante digital regulation that prioritizes control over competition. The result has been higher compliance costs, slower innovation, weaker domestic tech firms, and continued reliance on foreign platforms. Regulation didn’t create champions—it created administrators.
China Competes as a System
China’s technology rise reflects coordinated subsidies, regulatory favoritism, and centralized capital allocation. U.S. firms operate under market discipline and the rule of law. Weakening them through discretionary antitrust doesn’t constrain China—it advantages China.
Lessons for U.S. Policy
The distinction between market power and state power matters. Effective competition policy must be grounded in evidence of consumer harm and applied after markets function—not before. Antitrust rooted in consumer welfare, combined with infrastructure expansion and regulatory predictability, strengthens American competitiveness without abandoning first principles.
Related Viewing: Gabriella Hoffman and I discuss Europe’s energy crisis and why centralizing economic decisions carries long-run costs.
5. Deregulate at Home, Defend Abroad, Win the Tech Race
The Principle:
Competition policy works when it lowers barriers to entry, protects investment incentives, and allows markets to discover better outcomes. It fails when political discretion replaces economic analysis. The goal should be clear rules, predictable enforcement, and a focus on measurable consumer harm.
Why it Matters:
Restore Guardrails
The first step is reaffirming the consumer welfare standard. Predictable timelines and transparent standards reduce regulatory risk and support investment, including acquisition pathways that help startups scale. Antitrust agencies should enforce the law—not pursue broad economic restructuring.
Align AI Policy with Growth
AI is a general-purpose technology with economy-wide productivity gains. Policy should prioritize deployment and diffusion, not preemptive restriction. Enforcement and regulatory policy should align with a pro-growth AI strategy that strengthens national security and economic leadership.
Defend U.S. Competitiveness
The U.S. should resist importing that precautionary model and challenge discriminatory digital regulations through trade and diplomatic channels. Competition with China is not a typical antitrust issue—it’s a systemic rivalry involving subsidies, state coordination, and strategic regulation. Weakening American firms through overregulation doesn’t discipline China.
Related Viewing: Taxpayers Protection Alliance Research Director David B. McGarry and I discuss my report on unleashing technology with antitrust reform.
Bottom Line
Antitrust should protect competition, not manage markets. Innovation thrives when firms can invest, experiment, and scale under predictable rules. The United States does not need industrial policy or politicized antitrust to compete. It needs to restore first principles and let markets work.
The risk is not underenforcement. The risk is repeating the same economic mistakes under a different political banner.
For more information, download my full report “Innovation Over Intervention: Restoring First Principles to American Antitrust” here and see the one-pager below:
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Capitalism’s Coalition Is Cracking — And That Should Worry Us
Free-market capitalism still delivers the goods. But its political coalition is fracturing — and that should worry anyone who cares about prosperity and freedom.
Recent Gallup polling on Americans’ views of capitalism and socialism shows that just 54 percent now view capitalism favorably, the lowest Gallup has recorded. Views of socialism remain much lower at 39 percent, but the direction matters. Support for capitalism has fallen notably over time, especially among independents and younger Americans.
The partisan breakdown is even more revealing. Republicans remain strongly pro-capitalist, though support has softened slightly. Independents now only narrowly favor capitalism. And among Democrats, fewer than half view capitalism positively, while nearly two-thirds view socialism favorably. As earlier Gallup polling on capitalism and socialism shows, this pattern has been developing for years.
Here’s the hard truth: those of us who defend free-market capitalism are unlikely to persuade most Democrats anytime soon. The data confirm it. Democrats often like the outcomes of capitalism — jobs, innovation, higher living standards — but reject the label, associating it with inequality or corporate power.
That alone wouldn’t be alarming. Political disagreement is normal. What is alarming is where capitalism is losing ground next.
A System of Liberty, Not Privilege
True capitalism is grounded in private property, competitive markets, voluntary exchange, and the rule of law. It treats individuals as decision-makers in their own lives — not subjects of top-down control. It decentralizes power, rewards value creation, and invites experimentation, allowing people to say “yes” to opportunity without asking permission from bureaucrats or politicians.
This idea is old — and proven. Adam Smith’s explanation of voluntary exchange captured it 250 years ago in The Wealth of Nations: “it is not from the benevolence of the butcher, brewer, or baker that we get our dinner, but from their regard to their own interest.” In a system of voluntary exchange, people seeking to serve themselves must first serve others. Prices convey information, profits signal value creation, and losses expose waste — the core of the price mechanism in a free-market economy.
The process isn’t perfect, but it’s far superior to the alternatives. As Milton Friedman argued in his critique of big government, markets work because they respect people’s ability to decide, adapt, and improve through cooperation — not central command.
The Real Warning in the Gallup Data
The most troubling signal in the Gallup polling isn’t Democratic skepticism. It’s the erosion among independents and younger Americans — groups that historically decide elections and shape long-term political trends.
Independents still lean pro-capitalist, but their support has fallen. Younger Americans overwhelmingly support small business and free enterprise, yet are increasingly ambivalent toward “capitalism” as a system. That suggests confusion, not rejection.
Even more concerning is what’s happening on the right.
A growing faction of Republicans — often labeled “national conservatives” or “populists” — is openly abandoning free-market principles in favor of state-directed outcomes. They argue for industrial policy, trade protectionism, expanded subsidies, and heavier regulation, all justified as necessary to achieve cultural, national, or political goals.
This matters because it breaks the traditional coalition that defended markets across parties.
When Both Sides Drift Toward Bigger Government
Gallup’s data show Americans are overwhelmingly positive toward small business (95 percent) and free enterprise (81 percent), while holding deeply negative views of big business. That gap tells us people still believe in markets — but not in a system that feels rigged and political.
The left responds by calling for more government control. Some on the right now respond by calling for different forms of government control. The mechanism is the same.
Whether it’s progressive redistribution or nationalist industrial policy, the solution offered is top-down power — politicians picking outcomes, overriding prices, and directing capital. History shows this doesn’t fix capitalism’s problems; it replaces markets with politics.
As the fallacy of corporate subsidies makes clear, once the government starts steering the economy, competition weakens, insiders win, and ordinary people lose. Bigger government doesn’t become more precise — it becomes more entrenched — regardless of which party is in charge.
Capitalism’s Problem Is Not About Performance
The Gallup results don’t show a rejection of capitalism’s benefits. They show a rejection of cronyism mislabeled as capitalism. Americans like choice, competition, small businesses, innovation, and opportunity — all products of free-market capitalism.
What they don’t like are bailouts, favoritism, barriers to entry, and rules that protect the powerful — outcomes caused by policy distortions, not markets. Policies such as occupational licensing that create barriers to opportunity or housing restrictions raise costs and block entry, especially for younger Americans. When those failures are blamed on “capitalism,” skepticism grows.
This is why the fight matters most outside the Democratic base. If independents, young people, and market-friendly conservatives drift toward bigger government — just with different slogans — the long-run prospects for freedom dim.
The Moral Case — and the Evidence
Beyond efficiency, capitalism rests on a moral foundation. Markets respect individuals’ dignity to pursue their own conception of the good life. They reward service, not status. They generate progress through experimentation and feedback. And they decentralize power, protecting against tyranny.
The evidence is overwhelming. In 1820, more than 90 percent of the world lived in extreme poverty. Today, that figure is under 10 percent, as shown by data on extreme poverty over time. Life expectancy has doubled. Child mortality has collapsed. Access to goods and services, once considered luxuries, has become common.
What drove this transformation? Not redistribution or industrial planning. It was the spread of market institutions: open trade, secure property rights, sound money, and the freedom to invest and innovate. The comparisons are instructive — East v. West Germany, North v. South Korea, Venezuela v. Chile. Where markets are embraced, prosperity follows. Where they’re suppressed, poverty and repression prevail.
Reclaiming Capitalism
The polling tells us the challenge ahead is not convincing Democrats who already favor more government. It is rebuilding confidence among the persuadable middle and preventing the right from abandoning markets in favor of control.
The path forward isn’t to redefine capitalism, but to reclaim it: restore sound money, limit government favoritism, secure property rights, open competition, and remove barriers that trap workers and families. And we must explain — not just defend — why free-market capitalism remains the best path to prosperity.
Public skepticism is rising, yet the moral and empirical case for capitalism has never been stronger.