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How Bernie Sanders' Radical Plan to Fix Markets Could Save Capitalism
By Sanjukta Paul
Jan. 24, 2020
Excerpt:
No law of nature compels corporate managers to run their organizations for the benefit of shareholders to the exclusion of their workers and the communities where they do business. Corporations were once thought of as quasi-public entities required to justify their special legal privileges by serving the public interest. Imagine, then, legal reforms that give workers a voice in corporate governance, and that modify the fiduciary duties of corporate directors so they run not only to shareholders but also to other stakeholders, including workers. This is also a market.
And it’s very much the sort of market that Sanders favors, judging by his detailed plan on antitrust and corporate law reform, together with his decades-long support of labor organizing. The central, unifying theme of this plan is to expand democratic participation in the economy while breaking up the consolidation of economic power and control. Its underlying goal is to disperse rather than concentrate economic coordination rights: allowing consumers, workers, and small firms to participate more fully in economic coordination.
The current permissive landscape of corporate mergers and acquisitions too often results only in short-term shareholder profits, and fees for investment bankers and lawyers, while undermining workers, re-investment in the business, research and development, and communities. The Sanders plan targets this problem. It would “institute bright-line merger guidelines that set caps for vertical mergers, horizontal mergers, and total market share.” It also promises to undo recent mergers that have caused harm, and to unwind companies that have acquired dominant positions in their markets, if they have wielded that power in harmful ways. Sanders specifically cites consolidation in agribusiness, the hospital sector, and telecommunications for social and economic harms to workers and the public.
Sanders’ plan shows he is willing to radically reconstruct markets—and his team knows the details well enough to do so. It also avoids the orthodoxy that largely suffuses economic policy thinking. Even a progressive version of that orthodoxy—one that disregards the ground-up legal creation of markets and conceptualizes any changes to the existing rules in terms of discrete “market failures”—is likely to seriously limit real changes. If instead she or he recognizes that both real-world markets and economists’ theoretical models are deeply constituted by the background legal rules that create them, then a president will have removed the most powerful internal obstacles to creating an economy that truly works for all.
https://www.barrons.com/articles/can-bernie-sanders-save-capitalism-antitrust-expert-weighs-in-51579877760