Two of the Biden administration’s recent nominees – Lina Khan, tapped to serve as a member of the Federal Trade Commission and Timothy Wu, awaiting appointment to the National Economic Council as a special assistant on technology and competition policy – signal a troubling shift towards the adoption of retrograde and economically‐​damaging approaches to antitrust.

Khan came to prominence in 2017 with the publication of “Amazon’s Antitrust Paradox,” which argued that antitrust’s narrow focus on “consumer welfare” led to a permissive attitude to anticompetitive behaviors by companies such as Amazon. Features of modern platforms’ business models, she said, incentivized these companies to prioritize growth over profits, making “predatory pricing” rational. Meanwhile, the fact that Amazon acted both as a seller and the provider of what she deemed “essential” infrastructure meant the company was able to “exploit” product information for anticompetitive ends.

I appeared on a panel with Khan at Columbia University in October 2019. It was clear that she generally believes “systemic” high levels of “market concentration” are inherently problematic—a view that is empirically debatable and that economists have anyway rejected since the revolution that said consumers’ welfare should be supreme. Khan has been an important advocate, though, of the progressive view that aggressive antitrust policy, by reducing business size, is the key to reduce a range of perceived social problems, including inequality, weak private investment, and the “democratic” harms of large companies as “private government.”

Tim Wu has a similarly long background of antitrust advocacy, like Khan, with a recent focus on big tech. Most famously, he is credited with bringing the concept of net neutrality – the requirement that internet service providers treat all internet content, users, and websites equally – to the forefront of the public consciousness.

He shares Khan’s anti‐​bigness instincts. His recent book, The Curse of Bigness: Antitrust in the New Gilded Age, even goes as far as suggesting that insufficient application of antitrust laws to check “private power” has contributed significantly to our political ills today. In policy terms, he would preemptively ban large companies from acquiring others (as Facebook bought Instagram and WhatsApp), irrespective of the likely impacts on consumers. And he would heavily prosecute other companies deemed to engage in anticompetitive action heavily.

Cato Institute scholars have opposed antitrust laws in general, not least because they tend to entrench static thinking, ignoring the key margin of competition in the long‐​term: Schumpeterian creative destruction.

But the broad focus in recent decades on consumers’ welfare at least brings focus to the outcomes of business behavior, rather than attempting to shape complex markets and ecosystems towards some preconceived idea of what competition should look like. Indeed, the consumer welfare approach was developed precisely because the previous “structuralist” model that Wu and Khan implicitly advocate led to ad hoc rulings, the banning of pro‐​competitive behavior, and deleterious consequences for innovation.

Many of the particular empirical claims of the likes of Wu and Khan are contentious and they downplay the massive consumer surplus big tech firms have generated. But, as I concluded in my remarks at Columbia (from 1:11:00), application of their desired structuralist approach to competition policy risks not only an unwelcome return to rulings that harm consumers, but deterring the sorts of innovations that have really made us all better off in ways we can’t even conceive.