Noah Smith delivers a sharp, contrarian pivot that challenges the very movement he once championed: he argues that the anti-monopoly crusade has become so ideologically rigid it is now counterproductive to the goal of curbing corporate power. This is not a defense of big business; it is a warning that treating antitrust as a "Grand Theory of Everything" distracts from real economic solutions and harms the very workers these policies claim to protect.
The Allure of a Single Story
Smith begins by acknowledging his own evolution, admitting that for years he viewed market concentration as the primary culprit behind America's economic stagnation. He recalls the 2010s when "circumstantial evidence began piling up" suggesting that industrial consolidation was throttling wages and investment. At the time, the logic seemed impeccable: if you see higher markups, lower output, and weaker enforcement, the conclusion must be monopoly power.
Smith writes, "Basically I see the case of the Market Power Story... as detective work. We're collecting circumstantial evidence, and while no piece of evidence is a smoking gun, each adds to the overall picture." This framing was compelling because it offered a unified explanation for disparate economic ills, from inequality to political decay. The administration's initial embrace of this view under Biden seemed like a triumph of academic economics entering the halls of power, with figures like Lina Khan taking charge at the Federal Trade Commission.
"The idea that competition should reduce profits to a low level in a well-functioning economy is Econ 101... Biden's tweet about capitalism and competition might sound like bold populist rhetoric, but it also could have come right out of an econ textbook."
However, Smith argues that the movement has since lost its way by conflating correlation with causation. He points out that while some studies show labor market concentration hurts wages, other credible research teams have found that employer concentration has actually decreased in local markets over recent decades. This creates a logical paradox: if monopsony power is the root of all social ills, why are those specific metrics improving? Smith notes that "a lot of these links are just incredibly tenuous, requiring heroic leaps of assumptions about society, politics, culture, and economics."
Critics might argue that focusing solely on profit margins ignores non-financial forms of market power, such as data dominance or network effects. Yet Smith's point remains that the current movement often targets industries with razor-thin profits, suggesting a fundamental misunderstanding of how these sectors operate.
When Antitrust Becomes Obsession
The core of Smith's critique is that the anti-monopoly movement has morphed into a monomaniacal ideology where corporate concentration is blamed for everything from racism to the collapse of news media. He cites Barry C. Lynn, a founder of the movement, who claims monopoly is "not one of many economics problems but rather the political economic problem of our time." Smith finds this totalistic view dangerous because it ignores nuance and leads to policy errors that hurt ordinary people.
Smith writes, "Antimonopoly should be a tool, not an obsession." He illustrates this by highlighting how the movement targets grocery stores and health insurers—industries with profit margins hovering near zero. If these companies aren't making excess profits, Smith argues, they cannot be using monopoly power to gouge consumers in the way the narrative suggests. The administration's attempt to block the Spirit/JetBlue merger serves as a cautionary tale; instead of preserving competition, the intervention led to Spirit Airlines going out of business entirely, resulting in 17,000 unemployed workers and less orderly market consolidation.
"Corporate concentration was achieved after all — but it was achieved with disorder, corporate failure, and 17,000 unemployed workers rather than with an orderly merger that would have preserved some of Spirit's routes and workers."
This misstep echoes historical failures where policy tools were applied without regard for market realities. Just as the Hart-Scott-Rodino Antitrust Improvements Act was designed to regulate mergers based on specific economic thresholds, the current movement often ignores those thresholds in favor of a blanket "anti-big" stance. Smith argues that blaming corporate landlords for high rents is similarly misplaced; with corporate ownership of rental properties remaining tiny, the real culprit is simply a failure to build enough housing, not market concentration.
A counterargument worth considering is that even low-margin industries can engage in anti-competitive behavior through predatory pricing or exclusive contracts. However, Smith's evidence suggests that the current movement lacks the precision to distinguish between genuine antitrust violations and normal competitive dynamics, leading to "slopulism" rather than effective reform.
The Bottom Line
Noah Smith's strongest contribution is his insistence that anti-monopoly sentiment must be grounded in data rather than ideology; when policy targets industries with no excess profits or ignores supply-side constraints like housing shortages, it fails its own mission. The movement's biggest vulnerability is its tendency to treat antitrust as a panacea for all social ills, a stance that ultimately weakens the case for genuine competition reform by associating it with demonstrably flawed economic reasoning. Readers should watch for whether the administration can pivot toward more nuanced enforcement that targets actual market abuses rather than simply size.