Seminar 9: Critical Political Economy

This seminar looks ‘left’.  The two papers are by the same authors writing pre and post crisis. One oftheir influences is Bob Jessop, and the further reading has a paper by him where he engages with competition law indirectly.

Hubert Buch-Hansen & Angela Wigger  ‘Revisiting 50 years of market making: The neoliberal transformation of European competition policy’ (2010) 17(1) Review of International Political Economy 20

Angela Wigger & Hubert Buch-Hansen (2013) ‘Competition, the Global Crisis, and Alternatives to Neoliberal Capitalism: A Critical Engagement with Anarchism’ (2013) 35(4) New Political Science 604

Further Reading

Bob Jessop ‘The complexities of competition and competitiveness: challenges for competition law and economic governance in variegated capitalism’, in M.W. Dowdle, J. Gillespie, and I. Maher, eds, Asian Capitalism and the Regulation of Competition: Towards a Regulatory Geography of Global Competition Law, New York: Cambridge University Press (2013) preprint version here.

 

 

13 comments on “Seminar 9: Critical Political Economy

  1. Alexandre Ruiz says:

    Buch-Hansen and Wigger try to provide a new view for competition as an attack on neoliberalism. Their critical, historical perspective of competition is interesting, and they suggest a different reading of EU competition. For instance, they say that EU competition regulation was not along ordoliberalim as it has been said in previous seminars (p. 29 of the 2010 paper).

    The 2010 paper offers a historical account of competition policy alongside the evolution of liberalism towards neoliberalism. In its early years, EU competition policy was conceived according to the era of embedded liberalism. Broadly speaking, competition enforcement was consistent with the Keynesian idea of capital accumulation (content of competition law), since there was a lack of merger control. In this sense, the authors say that ‘the Treaty was virtually a carte-blanch permitting the creation of market power’ (influence of Fordism) (p. 29). It seems that one of the enforcement priorities was to create Eurochampions to make the common market competitive (p. 30), and there was tolerance of cartels. Furthermore, competition policies across Europe were not integrated, and the Commission had a proactive role (scope of competition) (p. 31). Finally, Member States could not enforce EU competition law (form of competition).

    In the 80s, with neoliberalism, the authors show that there was a deconstructive-constructive dialogue. Thus, on the one hand, the institutions and the protectionism were criticized (deconstructive moment) and, on the other hand, new strategies for transforming the existing model appeared (constructive moment) (p. 32-33). My feeling is that Buch-Hansen and Wigger’s criticism in the 2010 paper is that neoliberalism responded to the crisis of liberalism with more liberalism, something that they say explicitly in 2013 (p. 605). They argue that competition policy took the efficiency criterion as unique vision (p. 35) [instead of adopting a multi-goal approach]; the Commission started challenging national governments and reinforced its powers through the ECN (p. 38) [instead of adopting a much more democratic, anarcho-syndicalist federal model where the larger levels are subordinated to the lower]; there was a wave of privatization of public sectors; the merger regulation is very lax; and, as a result, transnational corporations were the winners and small companies the losers (p. 37). Furthermore, competition enforcement has been entrusted to market actors and private litigation, undermining the democratic level of EU competition regulation (p. 37-38). Thus, the recipe for fighting the crisis of liberalism and competition was more competition (2013 p. 614).

    In the 2013 piece, Buch-Hansen and Wigget develop their criticism. At the beginning of the paper, they focus on competition and capitalism, and say that capitalist competition is contradictory because it seeks to protect capitalists from capitalists (p. 606). Now, what is their proposal? From an abstract perspective, they base their proposal on the idea of co-operation/mutual aid vs competition (p. 614); and anarchism as a new form of organization (p. 615). These are the main points:
    – Multiple goals of competition (p. 618)
    – Break with the consumer society (p. 618)
    – Equity principle (competition on quality rather than on price, long-term goals and extra-economic dimension, equal opportunities) (p. 620)
    – Principle of environmental sustainability + Principle of subsidiarity (621)
    – Local protection (621)

    Summing up, and without the intention of caricaturing their claim, their criticism is rooted on the following premises: Capitalism is perverse, but environmentalism is good. Globalization is bad, localism is better. Market power is very bad, and obviously small co-operatives are preferable. Short-term effects do not matter, but long-term effects. Liberalism is bad, neoliberalism is even worse, and competition is guilty for being one of their mechanisms. Now, one may agree and be sympathetic to their claims, but their argument shows certain incoherencies, though. Firstly, in the 2010 paper and first-half of the 2013 paper, they link competition with any form of liberalism. Indeed, they seem to use competition as a target to criticize neoliberalism and the economic crisis, and I infer from their paper that they would prefer more state regulation rather than competition. But then, in the second-half of the 2013 paper, they say that in anarchism there is also competition (618). Then, the key question is, as they admit, what kind of competition do we need (p. 619). Thus, I am not sure whether it is fair to criticize competition as a way to attack neoliberalism if, from an anarchist point of view, you need also competition.

    Secondly, another argument that it is not clear to me is that one of solidarity, cooperation and mutual aid (p. 620-621). They say that these are good values brought by the principle of equity, and they claim for, in essence, eliminating patent rights (621). However, they justify so by saying that property rights for knowledge creates inefficiencies (!?) whereas the efficiency-approach of competition was one of their criticism. Are they not adopting an efficiency-approach here? Furthermore, unless I got it wrong, they said before this that there should not be price wars, and that quality-based competition is much better (620). How, however, can be a minimum level of competition in quality without patent rights?

    Last, I am not sure whether their anarchist-inspired utopian thinking suggest a realistic normative framework for making competition better. As they admit, this stance fails to link the local to the global, and it finds difficulties in suggesting a new competition model at a macro level (623 onwards). When it comes to the macro level, anarchist-approaches need a degree of hierarchical structures: ‘[a]narchist types of direct democracy and the ideal of constant communication become unmanageable when tackling macro-level problems’ (p. 624). Where is democracy in such a hierarchical structure? At the end of the day, what does this perspective bring new to competition? Can our current competition law not deal with multiple goals? Can the institutions not be more democratic? Can we not change the ECN? Can we not fight market power concentration? I can agree on their criticism of neoliberalism and the crisis (2013: 613). But as competition law is designed, there is room for changing the more economic approach towards an alternative, fairer paradigm.

  2. Maria de la Cuesta says:

    The readings for this session offer a different and interesting perspective on competition law, building on historical materialism and anarchist theories. All in all, it is easy to share many of the criticisms expressed in the papers about competition as the main mechanism of a ‘capitalist’ market: the environmental concerns, the growing inequality, the threat to the survival of local communities, the implicit moral poverty of a consumerist society, etc. Most of all, I could not agree more with the authors that the pseudo-neutral language of neo-classical economics is but a mask that hides the inevitable political choices inherent to competition policy.
    In their criticism, the authors pretend to place themselves in the position of the outsider, and even if this position may lend them the authority of the incorruptible critique, it also shows some of the weaknesses of their argumentation.
    On the one hand, by talking from the outside, they fail to engage with the diversity and depth of the discussions that have enriched the theory and practice of antitrust ever since its very beginnings. They reduce all competition theories to the dominant paradigm of neo-classical economics, obviating the nuances, corrective mechanisms and varieties that exist in the theory and enforcement of competition law. Even if they draw a line between embedded liberalism and neoliberalism, this differentiation does not deal with competition policy itself: they are not discussing the way the Chicago school way of thinking overtook the enforcement of competition law after the years in which competition and efficiency could be subordinated to the needs of small businesses, or in short, to a different view of competition from the one they describe; neither do they discuss the differences of the European approach. Rather, they discuss a number of phenomena they bring together under the all-encompassing, probably over simplistic, label of capitalism, to which they attribute the origin of every possible evil: the big bad fish of global trade, exploitation of labor, women, minorities and the environment.
    On the other hand, they start from the outside of competition in the market, because ‘markets are not natural facts (…), but rather are social constructs that depend on various forms of regulation for their reproduction’, only to come back inside: ‘markets where goods and services are exchanged are surely not an exclusive prerequisite of capitalism: they have existed throughout mankind, in pre-capitalist and also in socialist societies’. By coming back, their argument loses strength, because it becomes but one of the many options already out there claiming for a fairer system of competition law and from which they seek no support or inspiration because they are ‘outsiders’.
    Finally, I have found a further problem with their whole argumentation, which I find harder to define but which they also recognize: this is the connection between competition and global trade, as what they define as the essential characteristics of capitalism. However, they fail to delimit the two concepts, which are surely interlinked, but which serve different purposes, so the (limited) transnational application of competition law through the persecution of international cartels, anti-competitive behavior of dominant firms, often multinationals, or anti-competitive mergers, even if certainly related to the conditions of the workers employed in the global production of goods and services, or the environmental impact of their activities, still seems a limited, partial and inadequate instrument to fight against the exploitation of workers and natural resources, or the overwhelming growing inequality that they are denouncing.

  3. Anna Nowak says:

    I must say that I didn’t except such readings and I wasn’t aware of this kind of rhetoric so soon after the fall of Communism. Certainly, the authors’ opinion radicalized during those 3 years separing the articles.
    First, the idea that the competition has “profoundly political nature”, as the authors put it, was proved par excellence in the later text, which was basically a political discourse. Second, I think that the criticism of the authors, especially taking into account the context in which it is situated, is in fact adressed to the free market economy, not the competition itself, or even more, to the economic and social system in general. I also struggle to join the very just concern about the environment with the competition – I got the impression that the competition is blamed for all the calamities of the modern world.
    I must also disagree with the argument concerning the pernicious effects of cartels, mergers and acquisitions used as a criticism of capitalistic market and competition – the competition law, e.g. of EU, is all about avoiding this kind of situation so how the actual system may be critised on this point?
    Finally, I can’t help seeing this text as a kind of a communist manifest, calling for solidarity, cooperation, mutual aid, refusing “hedonistic consumerism” and being highly concerned by the certainty of employment. My imagination is particularly lacking with regard to the creation of “democratically managed competition-controlling institutions that embody anarchist values and logics”, with a special emphasis on the word “democratic” which use I find a little unconvincing in this context.
    I do not find the 2013 text as an in-depth analysis of the crisis or a serious talk about the shortcomings of competition, rather as an excuse to make a radical political project gain currency.

  4. Katrine Lillerud says:

    Revisiting 50 years of market making (Buch Hansen)
    The article provides a historical overview of the reasons behind and development of certain policy choices in EU competition law regulation seen in context with events on a global level such as increased competition from the US and later China. The main observation is that the policy has shaped both the content, form and scope of competition regulations over the past 50 years and that the Fordist and Keynesian way of thinking has been gradually been replaced by a convergence towards the US model whereby “a more marked-based competition regime” where “efficiency gains were established as the hallmark for decision-making, supported by a growing number of economists” (p. 37) and where the European Competition Network today attempts to improve convergences, whilst the increased focus on privatization of enforcement (because the Commission can no longer handle the task on its own? Or because of the decentralization objective?) and the use of sophisticated microeconomic models have become the standard (due to the increased number of economists in DG COMP or because this is in fact the best way to regulate competition law?). The main criticism is that the current scholarly discussions have downplayed that importance of the influence and political nature of competition policy and the influence it has on shaping of the law.

    Competition, the Global Crisis, and Alternatives to Neoliberal Capitalism (Buch Hansen)
    In this article, quite surprisingly, the anarchist way of thinking is introduced to inspire solutions to solve the failure of the current system, which has resulted in a financial crisis. The authors’ main objection to the current system seems to be that “excessive competition (over-competition) in the process of capital accumulation has become a major global force with highly detrimental social and environmental downsides” (p. 604), since this chosen course has proven itself a blind alley making the crisis worse (p. 605). It seems that the main idea thrown out is that anarchist-inspired thinking can provide an alternative economic order to accelerate finding the “ideal” balance in competition law enforcement. This because the anarchist way would allow for a myriad of different types of economic arrangements such as shared economy I presume “that go beyond production for the sake of profits and that revolve around democratically managed horizontal production collectives.” Something that the current model only focused on efficiency gains is not able to capture? (p. 625)

  5. Maria Ana Barata says:

    In the suggested articles, the authors analyse the evolution of European Competition policy since ECSC until 2013 (when the financial crisis had already started).

    I was particularly interested in the references made in the 2010 article to the European Commission’s (arguable) role on the neoliberatlisation of competition policy. e.g. by applying lax merger control during the 70s. Considering that since 1953, the references in the Treaty (and therefore the goals) to Competition have been changing, I wonder why is there the initial assumption that the European Commission influenced the decision-making process.

    Some points that I found interesting while reading:
    • The main criticism included in the 2010 article to the neoclassical view is that competition was considered the “highest good” from where all other virtues would result. According to the authors, this has been done while downplaying the importance of the influence of politics within the European Competition policy. I agree with the authors’ claim that the European Competition policy is deeply political and therefore more studies about this relationship (which naturally entails economic considerations) were expected to be carried out already.
    • In the 2010 article, the authors do not believe that the financial crisis will change the neoliberal ideas, which are currently favouring the bigger and more competitive firms; in the 2013 article, as a consequence, they provide alternative mechanisms (based on anarchist ideas) to fight the monotheism towards neoliberalism in the competition law field.
    • In the 2013 article, the authors clarify what should be understood by anarchism, by expressly stating that it shall not be imagined as the absence of state, but rather the challenge of the current capitalist state.
    • In the 2013 article, the authors share the anarchist ideas that could be used in order to build an alternative social-economic framework, however they acknowledge that this philosophical trend has not yet focused on the role played by competition within this non-capitalist society (which is quite disappointing, since the challenge was exactly to understand how can a society function if there was no driver for capitalist ideas grounded on fierce competition of the markets).

  6. stavros says:

    Hansen and Wigger build a narrative that aims to connect the dots of 50 years market making. Their basic claim (echoing Polanyi) is that a great transformation has occurred: from an era of embedded liberalism, EU competition law has been induced to a neoliberal era. My main problem with the article is that the notions of ‘balance of power’ and of the ‘struggle between capital and labor’ become final analytical terms. All the sophisticated analysis boils down to a simple claim that all the developments that have occurred in EU competition law reflect and are the outcome of this class struggle. This kind of analysis, based on some understanding of historical materialism, should be welcome as long as (a) it describes accurately the existing and past reality and (b) is able to formulate coherent visions of alternatives that transcend the existing order. Yet, I am not sure that Hansen and Wigger deliver fully satisfactory results to either of these fronts. The reason for this, according to me, is that they are too much attached to their theoretical framework so they do not fully capture the complexities of the subject matter of their analysis. To me this strikes as a problem of sophistication of their theoretical framework, but let me give you some examples.

    (a) Understanding what actually exists

    For instance, in the first article, a key claim Hansen and Wigger make is that the neoliberal turn took place in the late 1970s and early 1980s, where the economic crisis was increasingly perceived as a crisis of the embedded liberalism compromise (defined as a mixture of Fordist accumulation regarding the production methods and Keynesian welfare policies). At this point neoliberalism had a deconstructive moment, it attacked and aimed to modify the existing status quo and a constructive moment, it set up a regime based on (a) disembodying capital from political or regulatory constraints, (b) separating key market institutions from democratic accountability, (c) transnationalizing regulation. For Hansen and Wigger neoliberalism became from an open trial and error search for initiatives to a hegemonic discourse because vested corporate interests outcompeted labor in the balance of powers. However, the fact that many companies had expanded into foreign markets to realize further economies of scale and a new accumulation regime, based on more flexible production techniques and the transnationalization of production, has emerged were natural developments deriving from economic and technological progress. This kind of progress is more related to the ‘base’ than the ‘superstructure’. Therefore, the neoliberal hegemony, as part of the superstructure, cannot be explained only due to the changes in the base. Yet, Hansend and Wigger do not delve into the analytical and theoretical arguments developed by the neoliberals. They do not show how the neoliberals won the ideological struggle. For them they mainly won because vested corporate interests managed to stabilize and promote the transition towards a new post-Fordian accumulation regime by outcompeting labor. The capital outcompeted labor in the balance of powers and established its own Weltanschauung.
    This narrative ignores additionally that some aspects of the modernization process were purely rational, that EU law and EU competition law in many aspects reduced arbitrary decision-making on the part of national states. Big aggregations of capital have some pro-competitive benefits (reducing transaction and production costs, lower prices, capability for investments and innovation). By streamlining procedures and making them more effective the legal order incentivizes and improves ‘doing business’, and such business activity increases society’s welfare. Moreover, some of the past protectionist behavior was not pursuing exclusively or predominantly social goals (eg. cartels very rarely could be a device for pursuing social values and even if so there are always more efficient means). From this angle one might ask whether the so-called neoliberal turn was also a partially rational, justified development.

    In addition their narrative does not explain why such powerful economic and political forces did not substitute the old new-mercantilist order with another form of protectionism more favorable to their interests. Why powerful capitalists being able to affect political outcomes decided to establish competition rules in the first place and why when even more powerful pushed for more competition? Only if we accept that competitive market structures are always biased in favor of certain kind of players such a policy option on the part of the vested interests seems plausible. However, historical-economic experience has shown that truly competitive markets are not structurally biased. Competitive market develop forces that discipline business, whereas decentralized decision-making by independent competition authorities is less susceptible to interest capture. Given that competition and competition law limits and constraints dominant market players when they want to cartelize or monopolize the market it seems slightly paradocxical to argue that when dominant players had a momentum purshed for more competition and competition law.

    Another example could be found in the WTO competition agreement. Hansen and Wigger rightly recognize that a ‘WTO competition agreement would have committed member governments to ensure free access to foreign capital actors’. However, they ignore that such rules would have done so in a principled way by seeking to constitute competitive market orders. At certain points it seems that they do not differentiate between free-dirigiste and free-competitive market. Even if it were true that a deregulated market always benefits the strongest players, it would be far-fetched to argue the same for competitive orders. Competition imposes threats and constraints also to dominant market players; it makes their economic lives harder. In this sense a global competitive market order established by competition rules is essentially at odds with the interests of particular capitals even though it benefits the general capital as Jessop insightfully points out. In this regard, a simple question come in mind: How can Hansen and Wigger explain that the US opposed a WTO competition agreement? If it were to the benefit of the American industrialists, if it just offered them chances to dominate and exploite foreign markets, why did they oppose to it? By not distinguishing between free-deregulated and free-competitive markets, I think, Hansen and Wigger cannot adequately address this question.

    One last comment about Hansen and Wigger understanding of democracy. Competitive market may not be democratic in the way production is organized but necessarily are with regards to the consumption. The idea behind competitive markets is that the price mechanism operates as a plebiscitary for the allocation of resources. This legal-economic setting constrains market power and allows the supply to correspond to the demand. Consequently, if markets are competitive consumers are prefectly capable to express their voice. A competitive market is market with demand elasticity where no actor can act as a monopolist, namely behave independently of the competitive constraints and set supra competitive prices. In these markets consumers are always capable of choosing a substitute so as to punish a price increase or a lowering in quality. In these markets any conduct that does not satisfy demand (the consumers) is swiftly disciplined. Hence, competitive markets give full power to the consumers to express their preferences. And the other way around: if the consumers are unable to send clear signals to suppliers regarding their preferences this entails that the market is not competitive enough. However, their conception democracy make them underplay this aspect of markets

    (b) Sketching a utopia

    Now I will turn to point (b) made above, namely to the alternative the Hansen and Wigger offer (last part of the 2013 article). It seems to me that their sketch of an anti-statist, anti-capitalistic order of many different economic organizations and many different institutions is not adequately persuasive. I will try to demonstrate this with an example. For Hansen and Wigger an ‘image from the future’ is Emilia Romagna. Emilia-Romagna today is considered one of the richest European regions and the third Italian region by GDP per capita. Emilia-Romagna includes a very well balanced economy that comprises Italy’s biggest agricultural sector as well as a long-standing tradition in automobile, motor and mechanics manufacturing and a strong banking and insurance industry. The remarkable thing with Emilia Romagna is that it contains a variety of industrial activities, while agriculture has not been eclipsed (5.8% of gross regional product). By structural re-organisation and investing in high-quality products the sector has significantly increased its competitiveness. While currently about 8,100 farm cooperatives are working in the area, Wigger and Hansen forget to mention that the Barilla Group also operates in the area, as well as some not totally unknown automobile industrialists such as Ferrari, Ducati, Lamborghini and Maserati. The Emilia-Romagna economy is oriented towards exports more than any other regions in the country (mechanical engineering (53%), the extraction of non-metallic minerals (13%) and the clothing industry (10%)). Far from being a ‘bottom-up, cooperative, experimental ecovillage’ Emilia-Romagna is a diversified, quality and innovation oriented pluralistic market economy that praises competitiveness and is not solely focused on covering regional needs but it seriously engages in exports. Thus, I am not at all sure whether Emilia Romagna fits their image of the future.

    Another example of the problematic ‘image of the future’ could be found in Wigger and Hansen’s description of self-managed and democratically run production collectives. These collectives will still operate under market terms. So even if only such collectives ran the economy the economy still remain a capitalist one. In this regard it seems that their main concern is about the hierarchical, individualistic corporate actors that currently run the production. Yet, the existing economic system allows for multiple legal forms of organizing production. Different forms of business organization are tested and assessed. If a self-managed, democratic one is best then nothing prohibits this form of organization from being the dominant paradigm. In this sense Hansen and Wigger do not fully explore the capabilities of the existing legal and economic regime and they prefer to argue about an illusive alternative. It should also be noted that if Wigger and Hansen wish for a universe of self-exploited workers within self-managed production cooperatives they actually seek for the transformation of the worker into an entrepreneur.

    Lastly, I would like to clarify what I mean by saying that Hansen and Wigger do not fully explore the capabilities of the existing legal and economic regime. Jessop insightfully notes that the role of competition law is to constrain particular capitals from securing above average rates of profit at the expense of other capitals through anti-competitive forms of competition (e.g cartels of monopolies) so as to ensure the interest of capital in general via allowing the free play of market forces so that no particular capitals are disadvantaged. In this sense competition law is essentially reformist: it seeks to reproduce the conditions of reproduction of the economic system. Providing equality of opportunity, curbing market power and eliminating anticompetitive foreclosure that leads to consumer harm should be the main tasks of competition law. Under these principles, though, competition law could shape competitive markets where consumers rip the benefits of big aggregations of capital whereas strong market players compete on the merits and are not allowed to exploit consumers or anti-competitively exclude rivals from the market. More than this competition law can help today tame/rationalize the economic advantages that strong IPRs entail to dominant companies and create fair conditions for the market players to compete via the essential facilities doctrine, net neutrality and FRANDs. Furthermore, competition law could exempt (a) from the application of the market rules relations that are not based on solidarity via the notion of undertaking, (b) arrangements that have redeeming virtues under Art. 101.3 TFEU, or abusive dominant behavior which objectively justified or significantly beneficial for the consumers. Competition law, moreover, controls concentrations of capital and allows the authorities to take proactive measures so as to protect the post-merger competitive process. The DeMinimis doctrine, the NAAT rule and the BERs provide several safe harbors to smaller players. In a sense competition rules protect these players from competition and gives them the opportunity to enhance their economic strength. On the other hand the special responsibility doctrine restraints dominant companies from engaging in practices that are perfectly normal for weaker players but in their case lead to further weakening of competition in the market. These capabilities are already integrated within the system and will disappear should we decide to move to an alternative regime

  7. Elena says:

    The two papers of this week can be linked to the debate on how to revitalise US Antitrust hold during the 6th session. In that occasion, the inconsistencies and deficiencies of our capitalistic ‘competition only’ system were highlighted and some technical solutions were put forward. I start by pointing this out because, in my opinion, one of the main shortcomings of Wigger and Buch Hansen’s papers is their lack of concreteness when dealing with the undesirable effects and consequences of the neoliberal economic religion. In their 2010 paper, they accurately describe the evolution in EU competition law from liberal ideas towards neoliberal dogmas in terms of content, form and scope of the policies. They challenge, in very general terms, the view that ‘fierce competition is a blessing’ and maximizes social welfare. Nevertheless, they do not success in pointing at why it is to be consider a curse.

    In the 2013 paper, Wigger and Buch Hansen interestingly elaborate a bit on the intellectual weaknesses of (neoliberal?) capitalism and fierce competition underpinning their analysis with the postulates of the classical thinkers. However, I miss again a more articulated discourse on the stifling effects of the accumulation of capital, financialisation and (Polanyi’s) dis-embeddeness of society in the economy. A more articulated discourse would have been desirable given the ground-breaking argument they put forward, namely the advocacy for the adoption of anarchist ideas in a prospective post-neoliberal economic system. Moreover, they could have elaborated more on their ideas about the role competition could play in a ‘post-growth’ society.

    By quoting Proudhom, they specify that competition is not to be condemned, ‘as it is the vital force which animates the collective being’. I align with this view as I think competition is intrinsic to social dynamics and it can be found, as cooperation, in every manifestation of the social life. The human being can potentially compete in every aspect of existence and this idiosyncratic competitive temper is what leads our spirit of achievement and our innovative thinking. However, as in other branches of law, our primitive inclinations should find their limits on other’s fundamental rights and dignities. An anticompetitive behaviour should consequently be condemned by cultural, social, moral and ultimately legal norms. But when is competition detrimental and when is excessive competition to be condemned?

    In my opinion, competition equates to progression just when competitors do not act as free riders and create bad externalities. Based on the logic of capitalism, in which capital serves as means of production and, at the same time, as a tool of wealth accumulation, the logical conclusion is that one of the bad externalities of competition is the excessive accumulation of capital. In my opinion this conclusion is also the logical outcome of the same definition of capitalism as a system in which companies ‘using privately own capital goods and wage-labor, produce and sell goods and services with the intention of making profit’ (Jessop 2002). Given that capital is necessary to produce goods and services and thus vital to competition, if one wants competition to survive then the accumulation of capital needs unavoidably to be limited. However, Wigger and Buch Hansen’s proposals go into other directions.

    In order to eschew the bad feedback loop of capitalism, Wigger and Buch Hansen advance the anarchist idea of the promotion of bottom-up struggles in order to change ‘micro-relations in everyday life’ which is to be ‘seen as the cutting edge for changing macro-structres’. They demand horizontal and democratically managed forms of production based on the principles of mutual aid, cooperation, environmental sustainability and subsidiarity. However, they do not put forward a theoretic normative overview or strategy to makes sense of these principles. Instead, they quote Emilio Zapata sentence ‘preguntando caminamos’, as an appeal for action without a defined theoretical background, since they translate such sentence as ‘walking we ask questions’. The translation they make is defective, as what the sentence really says is ‘while interrogating ourselves, we walk, we make progress’. I find this mislead meaningful representative of the occasional lack of a sound theoretical background guiding anarchists’ calls for action. Ultimately, anarchism wants to destroy coercive social power relations and social fictions in order to install self-governed (voluntary) institutions that will be instrumental to the achievement of an Epicurean state of ataraxic freedom. This sounds extremely attractive, but how can put these ideas into practice?

    In his landmark novel ‘An Anarchist Banker’, Fernando Pessoa uses a funny Reductio ad Absurdum form of argumentation in order to underline the fact that anarchist’s ideas are unworkable in practice. The main character of the novel, a rich banker, maintains that he is the only real anarchist because he has put his anarchistic theories into practice. He has entered the capitalistic structure become rich in order to subjugate the most important of all the social fictions (or, using Polanyi’s terms, of all the artificial commodities) of our times: money. All this discourse just to conclude that, in my opinion, anarchism should not be considered the best source of inspiration for a philosophy of competition law.

  8. Magdalen Reeder says:

    Though both of the articles we read for today questioned the regulation of competition and the neoliberal order, the 50 Years of Market Making article was more persuasive. Buch-Hansen and Wigger had less sweeping goals in this article—criticism is prominent rather than their less convincing prescriptions. Post-crisis they are definitely more optimistic about taking down the neoliberal order. But, though they paint with a broad brush that invites skepticism—ordoliberalism had almost no influence by their telling—criticism of neoliberalism is a necessary counterpart to its dominance.

    While I appreciated the offering of an alternative to the neoliberal world order, A Critical Engagement with Anarchism just didn’t sell its alternative as realistic. From the ivory tower, the simple life they describe seems nice, but the “more expensive products” it references on page 625 are not just a barrier to a hedonistic lifestyle—food, for example, is a meaningful necessity of life, and its currently cheaper than its ever been. As much as I enjoyed the article as a fun thought experiment, the costs and the lack of any explanation of how to get there (“beyond the scope of the article”) make its ideas unviable. What is the point of writing an article like this if you can’t suggest something serious? Even if the basics were taken care of, the mechanism for wresting control from those who have become wealthy and powerful on the back of the neoliberal order doesn’t seem like a small detail—I wish they had focused less on a transformative idea and more on making that idea seem like a plausible reality. I’m struggling, because perhaps it is sometimes necessary to put forth big ideas that seem impossible, but I just don’t see how the authors’ fantasy described in this article contributes meaningfully to discourse.

  9. galyna says:

    While having read some paragraphs of the paper by Wigger and Buch-Hansen, I had a feeling that I have read a speech prepared for the Summit of the Communist party of the Soviet Union. However, I must say that behind this quite emotional blaming of capitalism and competition as an important mechanism for capitalism as well as praising equality, there is no constructive criticism and no viable alternatives.
    I will comment on some ideas that I find unrealistic or unprecise.
    According to the article, over-competition is bad. But how can we measure when we have “acceptable” competition and when we have already over-competition? The concept of over-competition is not very well defined, it lacks clear criteria for analysis of the effects of the competition.
    Moreover, the authors claim that even “in no-growth or state economies there would be some surplus production, and where there is surplus production, there are markets, and where there are markets, there is commercial and financial profit, and hence competition”. Apparently, the authors do not realize that in practice state-regulated economy excludes a possibility to have any competition, because a state decides on its own how much goods should be produced and then state-owned enterprises produce the required amount of goods: not less and not more. Therefore, my question is, how in these circumstances one can imagine competition? Who will be compete with whom?
    A concept of “equitable cooperation” is slightly unrealistic. The authors use many nice words to describe the ideas of anarchism, as “equity”, “solidarity”, “cooperation”, “mutual aid”, “environmental sustainability” – but how all of that could work in practice? I have not find an answer to that question in their article. Furthermore, I have a problem with following their arguments. They argue that “equitable cooperation” is possible on micro-level and they give examples (p.622-623). But at the same time they claim that “self-managed and democratically run production collectives frequently have no choice but to adapt to capitalist reality and to outsource to cheap labor areas” and that “workers who collectively own the means of production would subjugate themselves to collective self-exploitation”. Would not it be the same exploitation of labour as capitalists are blamed for? Thus, what is the difference between this collective production and capitalists? Further the authors add that democratically run production would need “to expand sales, profits and growth”. But what is the difference between these activities and the concept of maximizing profits? Therefore, would the substitution of capitalists by democratically run production collectivities solve a problem of “exploitation” or “capital accumulating”?
    Taking these arguments into account I do not see how the anarchism on micro-level would solve the issues for which capitalism is highly criticized. Let’s look at the author’s arguments about the macro level. At the page 624 authors came to the conclusion that “at the macro level nested and hierarchical structures are indispensable”. Therefore, how could anarchist idea be implemented on macro level? The authors do not give an answer and they turn the readers’ attention to the micro-level again instead.
    In conclusions the authors try to come back to their point about the macro level and they propose the way to solve this issues – “to build new democratically managed competition-controlling institutions that embody anarchist values and logics” (p.625). Such institutions, however, require “a certain degree of nested governance structures”. Again, how they would propose to build such institutions practically speaking? And what would be an acceptable for anarchism values a “degree of governance”?

  10. Agnieszka Jabłonowska says:

    In their two contributions Buch-Hansen and Wigger engage in the discussion about the very idea of competition and its role in the social and economic organisation. The authors certainly deserve a credit for taking the discussion outside the competition law and policy and reflecting more generally about alternative economic orders. Nevertheless, I find it rather hard to agree with their conclusions and proposals.

    The first, pre-crisis paper provides an interesting account on the evolution of the European competition policy from the point of view of non-lawyers and non-economists. One can argue with particular elements of this account and the conclusions drawn on its basis (e.g. with respect to merger policy or the role of NCAs and ECN), but there is surely a value in describing this broader evolution and recalling that competition policy does not develop in isolation. Perspective of both authors is essentially a Western European one. Ironically, however, what I have found particularly interesting in their first paper is the mention of the parallel processes taking place in the Central and Eastern Europe (p. 35). Following their account, systemic transformation of the post-socialist states took place after the move from embedded liberalism to neoliberalism in the Western Europe has already taken place. In this context I think that the earlier paper of Tuori about European Constitutionalism is worth recalling. The author notes there, also on a side note, that many post-socialist states wished to make a clear break with their totalitarian past and included economic guideline provisions in their formal constitutions (p. 165). Buch-Hansen and Wigger, in turn, point to the role of European Commission, which has guided the CEE countries through the transition to free-market capitalism in 1990s. According to the authors „alongside the institution of market freedom and ownership rights, it promoted competition policy as a key instrument for introducing the logic of open competition to previously government-controlled economies, where monopolies and centralized price-fixing constituted the norm”. I believe that in the CEE context both of these elements, i.e. economic constitutionalism and the push from the EC for adopting the central role of competition policy, are linked to each other. At the same time, the example of the country which I know best, i.e. Poland, shows that in both respects the situation is more complex. For example, Article 20 of the Polish constitution provides that „a social market economy, based on the freedom of economic activity, private ownership, and solidarity, dialogue and cooperation between social partners, shall be the basis of the economic system of the Republic of Poland.” There are indeed clear references to market freedom and private property, but at the same time there is a strong emphasis on the social aspect and no mention of the competition policy. Also, while there is certainly a strong resentment in the Polish society about the way privatisation was conducted, I have serious doubts whether the alternative economic order proposed by Buch-Hansen and Wigger in their second paper would be well received here. I myself find it very hard to imagine how the admittedly laudable principles, such as cooperation, mutual aid, solidarity, democratic control over competition etc. could practically organise the economic realm, even more so at the macro level. The idea of „subordinating competition policy to the principle of equity” evokes the earlier discussions about the relationship between competition policy and inequalities. However, also in the present paper it is hard to find evidence for the claim that over-competition is indeed one of the root causes of the economic crisis, which then lead to the aggravation of inequalities, etc. All in all, I think that I would rather align with the (criticised) position of the centre-left, which “accepted and internalized the neoliberal pro-competition stance” and look for ways to to address the undoubtedly important social issues within the existing paradigm of competition or outside the competition law, but without undermining it (tax law, etc.).

  11. Zeynep Timocin Cantekin says:

    Competition Law Seminar 9: Critical Political Economy
    Reaction Paragraph to Buch-Hansen and Wigger Papers

    In the earlier article, Buch-Hansen and Wigger focuses on the evolution of European competition law and regulation from an era of embedded liberalism (with ‘public interest’ criteria at its heart) to neoliberalism (with ‘competition only’ vision at its heart). They put this into context with Europe’s reaction to the increased competition from the US in the last 50 years. From the beginning of the article onwards, they challenge the general tendency in the literature that is accepting competition as a “blessing” and they assert that the competition policy is deeply political and needs to be understood in a broader concept – i.e. transnationalism of capitalism and the global shift from liberalism to neoliberalim. Because the politics is reflected in the content, form and scope of the competition policy, they strongly reject the downplaying the political nature of competition policy. They end their argument with a note about the crisis that it would not result in a paradigm shift and the hegemony of neoliberalism will not crumble because the political and financial responses to the crisis reflect a ‘relative continuity’ of the neoliberal path rather than discontinuity. (pg.39)

    In the later article, they reiterate their argument that since the mid 1980s “the imperative of capitalist competition” has become the dominant global trend, and capitalism is sustained by the neoliberal competition regulation facilitating excessive competition and capital accumulation. The current trend of neoliberal competition remains unchallenged because it is internalised and praised. (But in my opinion they do not sufficiently explain why it is the way it is, and how the current system fails to address the issues they are concerned with in proposing a new model. Also I found it unconvincing because in the earlier article they highlighted that there is an important contradiction at the heart of neoliberal competition regulation that is while celebrating competition as the highest good, the fierce competition and concentration of capital has been undermined under the regulations. (pg.37)) They first provide a critique of capitalist competition from the point of historical materialism and then analyse the roots of the current global financial crisis and argue that ‘over-competition and financialization’ are the root causes of the crisis. Still none of the existing institutions of the neoliberal order has been questioned. They offer an alternative form of economic organisation dealing with these root causes and questioning the neoliberal (competition) order that is engaging with anarchist values and principles, which advocate forming new forms of organisations and new institutions that will support “collective, egalitarian self-management, voluntary cooperation, and mutual aid, as well as institutions that are subjected to decentralised, non-hierarchical direct democratic control.” (pg.615) This will come with cost for those who benefit from the neoliberal competition and will slow down innovation in certain industries, increase prices of certain products and force those who are living with ‘hedonistic consumerism’ to change their lifestyles. (p.625) Though I have found alternative anarchist competition order an interesting argument to read, I found it too abstract, unconvincing, and does not provide for a concrete analysis of the current crises as it claims in the introduction. Also, the structure of their argument in the earlier article is clearer and more persuasive then the later article.

  12. Alice says:

    These papers are very interesting in the extent that they offer a possibility to think competition outside the capitalist frame. They give some (few) nice suggestions regarding the role competition policy could play in a gradual modification of the economic system.
    However, the paper sometimes is too simplistic, especially regarding the analysis of the European competition policy.
    It is also interesting to see that some people would consider these papers as too political, but all the Chicago inspired literature as scientifically grounded.

  13. Rodrigo Vallejo says:

    That competition law might change alongside transformative socio-economic ideologies seems at first sight a rather trivial contribution (i.e. Buch-Hansen and Wigger, 2010). However, when the function of competition law is extrapolated from the micro-economic level to the meso and macro-economic dimensions of the practice, it becomes clear how beyond ensuring the correct performance of markets competition law serves as the oil to the cumulative engine of capitalism –whatever its varieties (i.e. Jessop, 2014). In this context, Wigger and Buch-Hansen speculation on the potential foundations for a post-neoliberal/anti-capitalist competition law seems pertinent, as a potential alternative to the current religion. I wonder whether they could have illustrated how it could operate through cases of competition law as applied to cooperatives, and whether the regime they envision could still be properly called competition law. Does competition law in its current form allows those type of considerations? This take us back to an expanded form of the discussion we had during the third session on the types of justifications that the field’s vocabulary could allow for agreements/resolutions explicitly restricting competition.

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