Federal Trade Commission Chair Lina Khan is always shopping for the right judge to validate her eccentric, extra-statutory theories of antitrust as a way to regulate everything. Yet in case after case, Khan keeps coming up snake eyes.
Her latest loss was sealed by the gavel of federal Judge Ada Brown. Judge Brown had issued a preliminary injunction stopping Chair Khan from enacting a national ban on non-compete agreements that employers impose on workers. On Tuesday, Judge Brown tossed out this self-declared FTC policy altogether.
“The role of an administrative agency is to do as told by Congress, not to do what the agency thinks it should do,” Judge Brown wrote. She criticized the FTC for seeking to enact a national policy rather than do what the agency is empowered to do by Congress—to target “specific, harmful non-competes.” She halted what would have been a breathtaking expansion of FTC’s power based on no law whatsoever.
Khan’s loss in this federal court in Northern Texas has larger significance for the presidential race. It points to the flaw in the plan of Vice President Kamala Harris to rely in part on the FTC to enact regulation of the national economy through price controls, beginning with food prices.
From the start, the vice president’s plan prompted a lot of head-scratching. Food prices had been low and stable for more than 40 years, running at about 2.5 percent a year, just keeping up with inflation. Then the Biden-Harris Administration poured inflationary gasoline on the waning pandemic fire and supply-chain disruption with the risibly named Inflation Reduction Act.
For anyone familiar with the well-documented effects of the debasement of a currency, from the Roman emperor Diocletian to Weimar Germany to Argentina, spending public money at a frantic pace results in inflation. In this case, Americans saw double-digit inflation in food prices. However, the Harris campaign has a political need to blame inflation on greedy corporate executives, deflecting from their own irresponsible economic management. Never mind that for some reason, these executives were content to merely keep up with inflation for decades until the Biden-Harris Administration began to add a trillion dollars to the debt every 100 days.
Now that inflation is subsiding, Harris wants to enlist the FTC to use antitrust investigations and authority to bludgeon companies into accepting the prices that regulators think best.
The good news here, amply demonstrated by Judge Brown, is that there are still principled jurists dedicated to the Constitution willing to keep progressive antitrust in check. The same happened when Khan’s quixotic cases against Meta’s acquisition of a virtual-reality fitness app called Within, or Microsoft’s acquisition of game-maker Activision Blizzard. In each case, a judge refused to swallow Khan’s exotic antitrust arguments that were grounded neither in the law nor in sound economics.
These jurists have dealt Khan one loss after another, halting her plans to give the FTC powers to regulate the economy not found in law. They would surely do the same to a President Harris plan to turn the FTC into an economic super-regulator. But can we continue to count on the judiciary as a bulwark against progressive anti-trust?
Looking ahead, the threat of regulatory socialism remains. It can be found in the rising generation of lawyers coming out of our law schools. Khan and her fellow progressives are doubling down on evangelizing in the law schools. Khan herself makes frequent “star” appearances at law schools, where adoring deans introduce her as the prophet of a new age of the “neo-Brandeis” school of antitrust. (Never mind that the original Justice Louis Brandeis was as suspicious of big government as he was of big business, frustrating one New Deal scheme of President Franklin Delano Roosevelt’s administration after another.)
Worse, Khan’s allies in the law school are committed to creating a progressive monoculture in academia. They keep an eagle eye out to nix any new faculty appointments for those who adhere to the law and a belief in free markets.
To protect the consumer welfare standard in antitrust, and to educate the next generation of judges, lawmakers, and regulators, defenders of the law and free markets must get out into the law schools. We can’t count on the next generation to produce more Ada Browns.
We must evangelize too.
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Robert H. Bork Jr. is the president of the Antitrust Education Project.
Absolutely agree with Mr. Bork’s article but I think his ideas need to be taken a step further in order to be effective. Instead of relying on evangelizing, hoping to inspire the minds & imaginations of what is likely to be a few unusual individuals, given the ideological capture of the university system in this country, I would like to see the development of a parallel economy in higher education; in fact, I think it is absolutely critical in several areas of study-- law, medicine, the hard sciences and journalism most importantly.
It is all very well to encourage our children & grandchildren to eschew college in favor of trade schools & I have been a big advocate of this approach for young people who are eager to start their adult lives with minimal debt. But it is a fact that we have and will continue to have an ongoing need for individuals in fields that require, at a minimum, a college degree who have not been co-opted by the progressive mind viruses.
I have no idea what would be involved in such an endeavor nor how much capital would be required but, at least in my own mind’s eye, I see a series of campuses where individuals of impeccable professional qualifications who have been ridiculed, vilified and/or forced out of those professions for the crime of not bending the knee to progressive ideology, wokeness or just plain bad ideas could help educate the next generation instead of just indoctrinated them.
In a robust and competitive economy, free enterprise is the rule, not an afterthought. Industries with few competitors are the rule now, not competition. Big Corporate is a phenomenon which evolved from collaboration between the regulatory agencies in government and those who head up corporations seeking to eliminate competition. Senior management in agencies tend to originate from those companies. They return to them when they retire from government “service”. It has resulted in entire industries which are oligopolistic, dominated by a handful of large concerns. That is not a free market economy.
To the extent the personnel in many government agencies originate from those corporate cultures, the government “regulating” these concerns only assists them in eliminating any competition or putting barriers to entry in place in order to keep competitors (especially start-ups or small business) out. We have witnessed this in the food processing and meat industry, where power is concentrated among as few as four companies, two of which are foreign-owned. It exists in Media, Tech, and other industries. Regulation which results in market concentrations is the rule of the day when the purpose of the FTC and other agencies is to promote competition. They have completely betrayed their origin and purpose. It’s time for true Free Market acitivists to control the FTC. Khan is not one of those people.
True free enterprise eschews government interference, especially when it seeks to intervene on behalf of one’s competition. Ms. Khan is actually a dangerous Marxist as are many bureaucrats precisely because they don’t know what a free market economy is, nor have they ever held any job which requires them to compete for customers or dollars. They know little about industries they regulate, but alot about The Law as cudgel. I’d suggest it is time to de-certify, and defund most law schools. Graduates can’t find jobs, end up in the government’s employ where they work their mischief on working people. Defund education. Defund the bureaucracy.