Venture predation

A pile of shit this big MUST have a pony underneath it!

Cory Doctorow


A giant pile of manure with a pony sticking out of it Image: Eli Duke (modified) CC BY-SA 2.0

Tomorrow (May 20), I’ll be at the GAITHERSBURG Book Festival with my novel Red Team Blues; then on Monday (May 22), I’m keynoting Public Knowledge’s Emerging Tech conference in DC.

On Tuesday (May 23), I’ll be in TORONTO for a book launch that’s part of WEPFest, a benefit for the West End Phoenix, onstage with Dave Bidini (The Rheostatics), Ron Diebert (Citizen Lab) and the whistleblower Dr Nancy Olivieri.

They said it couldn’t happen. After decades of antitrust enforcement against Predatory Pricing — selling goods below cost to kill existing competitors and prevent new ones from arising — the Chicago School of neoliberal economists “proved” that predatory pricing didn’t exist and that the courts could stand down and stop busting companies for it.

Predatory pricing — the economists explained — may be illegal, but it was also imaginary. A mirage. No one would do predatory pricing, because it was “irrational.” And even if there was someone irrational enough to try it, they would fail. Stand down, judges of America — predatory pricing is solved.

Chicago School economists — whose job (to quote David Roth) is to find new ways to say “actually, your boss is right” — held enormous sway of the federal judiciary. The billionaire-backed Manne Seminars offered free “continuing education” junkets to judges — all-expense-paid luxury vacations salted with lengthy your-boss-is-right econ seminars. 40% of the US federal judiciary got their heads filled up at a Manne Seminar.

For monopolists and other predators, the Manne Seminar was an excellent return on investment. After attending a Manne Seminar, the average judge’s legal decisions tipped decidedly in favor of monopoly, operating on the Chicago bedrock assumption that monopolies are “efficient,” and, where we see them in nature, we should celebrate them as the visible manifestation of the entrepreneurial genius of some Ayn Rand hero in a corporate boardroom:

A little knowledge is a dangerous thing. Even as post-Chicago economists showed that predatory pricing was both possible and rampant, a “rational” and effective strategy…