Missouri Senator Josh Hawley yesterday introduced new legislation to overturn century‐old U.S. antitrust law and penalize corporate “monopolies” that are “the enemy of the people’s freedom.” According to Hawley, this legal overhaul — and the government expansion it would engender — is needed because “globalization” has caused anticompetitive market failures that harm “the American consumer…the American producer, and…the American economy.”
Hyperbole and other problems aside, the Senator contradicts himself: far from empowering anti‐consumer and anti‐competitive behavior, globalization actually serves as a crucial check thereon. New research from economists at the New York Fed makes this connection clear (emphasis mine):
A rapidly growing literature has shown that market concentration has increased in the U.S. over the last decades. Using confidential Census data for the manufacturing sector, we show that typical measures of concentration, once adjusted for competition by foreign exporters, actually stayed constant between 1992 and 2012. We reconcile these findings by linking part of the increase in domestic concentration to import competition. Although concentration among U.S.-based firms rose, the growth of foreign firms, mostly at the bottom of the sales distribution, counteracted this increase. We find that higher import competition caused a decline in the trade‐adjusted market shares of the top‐20 U.S. firms.
In short, you can be a trust‐busting champion of the American consumer (a term that includes many import‐consuming American producers) or you can be a protectionist, but you can’t be both.
In fact, Senator Hawley’s own past actions show that he understands the very contradiction he’s peddling this week. In particular, Hawley in 2018 quietly supported a Mexican‐owned Missouri nail company’s exclusion from President Trump’s steel tariffs — tariffs Hawley otherwise supported and ones that were requested by U.S. steelmakers who had a dominant pre‐tariff market share and today are using their government‐heightened market power to squeeze American consumers for every last penny.
If only every American consumer had a trust‐busting Senator writing get‐out‐of‐tariffs‐free cards on their behalf.