Signs of commercial regime change?
The failed Kroger / Albertsons merger and what may come next
For its entire two year lifespan, I’ve held more than a passing interesting in the proposed Kroger / Albertsons merger.
While I’ll always be curious about the actions of huge American retailers, I was mostly following for the wider shifts in commercial dynamics this merger highlights. Its official passing - now confirmed by both state and federal courts, and the inevitable failed deal lawsuit - intersects with imminent executive transition, helping to bring the possible futures of these dynamics into focus.
The Trump administration almost inevitably promises a friendlier merger environment. But as Stacey Mitchell notes in her latest for the Atlantic, “Even if the antitrust resurgence slows over the next four years, it is unlikely to be reversed … Too many people - including judges and the voting public - are looking at the issue with fresh eyes.”
Commerce emerges from a complex set of interactions between a variety of different actors: suppliers; intermediaries; companies; governments; and publics / constituencies / audiences / consumers / customers / interest groups / stakeholders / or whatever we wish to call them. But as scholars of pragmatism and contentious politics have shown us time and again, these categories of actors are not just out there waiting to found and activated. Rather, they are cobbled together and honed through considerable (often fractious) effort. Efforts to frame problems as problems. Efforts to build coalitions to address them. Efforts to define identities, boundaries, and rules of inclusion and distinction. Efforts to identify, capture, nuture, channel, and expand organizational resources. Efforts, efforts, efforts.
These actors become recognizable, consistent, stable things when they are able to lock into existing networks and draw the resources / power to keep doing stuff. It’s when their interactions settle out into self-reinforcing configurations that we come to take as given or normal. They become the status quo, framing understanding of what is normal and should be considered as such.
This strikes me as the process underpinning the renewed approach to antitrust - Mitchell’s fresh eyes. A process with its roots in academia (just like the consumer welfare paradigm it seeks to replace) that grew out via coalition building with nonprofits, commercial enterprises, and government agencies to create a novel frame for understanding existing problems and define a means to address them. All given institutional credence, resources, and power with Lina Khan’s appointment at the FTC.1
And as is so often the case, this new coalition finds itself interacting with other shifts in the wider environment. Here a breakdown of the old Republican coalition - dominated by the Chamber of Commerce types - driven by Trump and the influx of once fringe or hetrodox ideas, including a “strange” relationship with big business.2 These shifts offer new sources of sustanence, as well as bringing together the proverbial strange bedfellows, promising the continuation (of sorts) of the new anti-trust paradigm even as the executive branch transitions into a very different dynamic.
The end of the neo-liberal consensus that has dominated American, and by extension much of global, commerce for the last 40-ish years appears nigh. A nascent transition appears to be rooting but incoming changes across the US federal government will inevitably alter its pattern of growth. What appears more certain, though, is that there is no easy path of return to the old regime. New publics / interets / whatever we want to call them have been created and at least partially stabilized. And these new actors bring with them all the multivalent glory of interests, objectives, priorities, and means of acting on them that will continue transitions in the wider commercial regime.
What comes next then?
Predicting the future is a fools game. But we can see outlines of strong possibility.
The likely return of the chaos that marked the first Trump admin will be coupled with better organized rapaciousness. Business abhors chaos so I imagine most will play it safe and seek quiet routes to growth that move beyond the 3Cs of the last 15 years - China, Cheap Cash, and Concentration.
Some mega-mergers will inevitably arise. Likely in “chosen” client industries (read strong ties to the administration) but the organized actors emerging from this recent wave will be better positioned to contest them, most like in state courts.
It’ll likely be weird for a while. Some strong line of continuity will remain. But transition is happening. And transitions within chaotic political contexts are going to be weirder.
Summing up
The rules of commerce are changing. The American state has begun to play its old role in the economy. Hell, even Robinson-Patman is making a comeback!3 The path of change is not terribly clear in light of Trump’s return to office. But the general arc of commerce is definietly bending towards something other than uncontrolled concentration.
Clearly Khan is amazing but we shouldn’t allow ourselves to be misguided (once again) by assuming this is all the actions of singular person.
The incoming adminstration clearly loves big business. But like all patrimonial regimes, the relationship relies on deference to the big man. My read of current suspicions are mainly efforts to create a more compliant corpororate regime but it will have the look of “break up concentrated power” for a short while.
Just imagine the Amercian retail environment had this law been enforced at any point in the last half century. <wistful sigh>