Book Review: The Great Leveler: Capitalism and Competition in the Court of Law

Recently, several analyses of contemporary capitalism ascribed the divergent movement of national income shares accruing to corporate profits and labor over the past thirty years, not least in the United Kingdom and the United States, to the growing degree of monopoly power and corresponding reduction of competition within and across capitalist economies. This explanation thrives in the debate on secular stagnation as revived by Larry Summers and other liberal mainstream economists, as well as in the writings of Marxists steeped in the “monopoly capital” tradition. Thus, if Baran and Sweezy (1966) argued the relentless shift throughout capitalist history from the prevalence of economic competition to that of monopoly, and the salience of such dynamic to the buttressing of profitability, that liberal mainstream economists now converge on such argument would seem to vindicate its prescience. The Great Leveler takes this convergence as a point of departure: although concurring “on the pivotal, frequently overlooked significance of monopoly power (and levels of competition) to capitalist dynamics, and on the crucial role that profit plays” therein, Christophers’ account differs significantly. Thus, premising “a crucially different theoretical understanding of monopoly,” competition, and their relation (8), Christophers (re)conceptualizes intellectual property (IP) and competition law as a powerful and necessary “leveler” of the centrifugal tendencies inhabiting the tense relation between monopoly and competition. ¹

The first part of the book discusses such “leveling in theory” (29–119), weaving a complex theoretical argument spanning its three chapters. Chapter one distills from Marx the “conceptualization of capitalism” critically informing the entire book: “that of capitalism always, necessarily, teetering on a knife edge, balanced precariously between the contradictory forces of competition and monopoly, and perennially in danger of lapsing too far to one side or the other” (9). Appraising Smith’s and Marx’s views on competition (not least contra modern neoclassical mainstream economics), Christophers demonstrates how competition is best understood “dynamically… as an activity, process, and behavior, rather than a static state or structure” (54). To develop such understanding, Christophers mobilizes four Marxian themes: first, competition’s “function in compelling individual capitalists to strive to accumulate” and “in driving the much wider growth imperative of capitalism as a mode of production”; second, the “co-constitutive natures of monopoly and competition,” whereby monopoly “produces competition, and vice versa”; third, the insight that capitalism’s reproduction continually requires the striking of “a balance between monopoly and competition—between [capitalism’s] centralizing and decentralizing tendencies”; and, fourth, the “crucial” cautionary remark that competition only “appears to explain more than it actually does, particularly in relation to price and profit levels” (55).

Chapter two revisits competition, monopoly, and their “co-constitutive relationship” as “substantively implicated in regulating and stabilizing profit and growth regimes” (58). Departing from Regulation theory’s “neglect of economic laws such as IP and competition law,” Christophers pinpoints its conspicuous de-emphasis “of exchange relations”, “market forces,” and the “competition dynamic embedded” in them (65). For Christophers, this results from Regulation theory’s analytical prioritization of relations of production, a Marxian legacy which, far from “unique to regulationism,” characterizes “[a]ll twentieth and twenty-first century Western political economy” (66). Marx had good reasons for prioritizing production in Capital (66–76)—notably his “central theoretical concern” with value creation, and his understanding of value as created exclusively in production and only realized through exchange (69). Yet, for Christophers, even within such analytical coordinates, “exchange and competition are far from irrelevant, for a Marxian focus on production alone is” insufficient “to understanding the creation of value in production” (73). Put otherwise, “[m]arkets must be studied not only for their own sake but also, [as] Marx recognize[d], for their direct salience to the productive… sphere” (74). Thus, although agnostic about the putative necessity to reframe value creation as also encompassing the process of exchange (73), Christophers firmly argues that “the latter does format the former” (74).

Ultimately, Christophers considers both Regulation theory’s institutional “fixes” and David Harvey’s spatiotemporal “fixes” to capitalism’s crisis tendencies conceptually and practically unfit for addressing the role of markets and competition within capitalism’s regularization (76–80). Indeed, “fixes” neglect the specific role and work of the law, reflecting the conceptual attempt “to extend Marx through adding incremental mechanisms of stabilization to his theory of capital accumulation” and crisis (79). By contrast, in chapter three, Christophers conceptualizes IP and competition law’s work of stabilization by developing and operationalizing Marx’s dialectic of monopoly and competition. Indeed, when the excessive tilting of the balance toward the one or the other endangers capitalism’s reproduction (84–96), competition and IP law “enter the picture and perform, either individually or in combination, vital work of political-economic stabilization” (83). Competition law intervenes when excessive “centralization leads to uncompetitiveness,” “lack of dynamism, and monopolistic combinations profiting at the expense of society’s consumers/laborers by enabling competitive conditions to crystallize and endure” (98), thus acting as a “dampener” on prices and profits (96–106). Conversely, IP law is “injected” into the system (106–118) when “ruinous competition” lowers “prices and profits to the point at which the returns necessary to justify investment” desert “the market place” (111), “assembl[ing] monopoly powers and facilitat[ing] profit generation” (106). Thus, for Christophers, while their “primary locus of direct intervention in capitalist political economy” is “the sphere of market exchange” (113–114), competition and IP law reassemble market power and the terms and conditions structuring the realization of value (105), thus conditioning production accordingly. Forcefully, Christophers’ concept of “leveling” underscores the concrete stabilization of the inherently destabilizing forces whose excesses mire capitalism and its very reproduction into crisis.

The second part of the book offers an “empirical-historical counterpart” (21) to the theoretical argument described above, delineating “in broad, macro-level brushstrokes” (24) the contours of “leveling in practice” (121–265) with specific reference to the UK and US economies. Here, Christophers builds a compelling historical argument, demonstrating the practical unfolding, since the last decades of the nineteenth century, of the stabilizing and regularizing role of economic law. Thus, Christophers carefully explores salient historical similarities and differences, empirical detail, and contextual specificity, not least with respect to the processes of formation, interpretation, and application of the law and their politics. Yet, the historical narrative he sketches clearly identifies three distinct phases. The first phase—running from the 1890s to the mid-1940s—sees the ascendancy of IP law and the reconstitution of monopoly power in response to the downward pressure on prices, profits, and investment due to excessive competition and the erosion of traditional sources of monopoly power in the late nineteenth century (chapter four). The second phase—running from the mid-1940s to the mid-1970s—marks the first “great reversal in the nature of the [law’s] political-economic leveling work. . . in the U.S. and U.K. contexts” (24). As such, it witnesses the substantive erosion of monopoly power and corresponding revival of competition through competition law, aimed at deflecting the threat of crisis afflicting the UK and US economies prior to the beginning of their “golden age” in the early 1950s—a threat rooted in the monopoly powers reconstituted in the previous phase, soon in excess, and the economic stagnation they commanded (chapter five).

The third phase—spanning the mid-1970s to the present—is ushered by the second great reversal in the nature of the law’s political-economic leveling work in the twentieth century (chapter six). Following those interpretations ascribing the crisis of the 1970s to the relative excess of competition, Christophers shows how this led the United Kingdom and the United States to reinvigorate “flagging monopoly powers” through the “abrupt relaxation of antitrust enforcement” and the concurrent “strengthening and more vigorous application of IP law” (24). Yet, when compared with the first phase described above, the post-1970s reassertion of monopolistic forces differs significantly: first, the UK and US industrial context is now marked by “the rapidly growing economic importance of industries—audio-visual, pharmaceutical and others—in which sources of monopoly power other than IP” are deficient (24) and, second, a “far greater degree of internationalization” characterizes “both competitive and monopolistic tendencies” (24–25), not least because of the Trade-Related Aspects of Intellectual Property Rights agreement and its consequences in terms of IP strengthening, harmonization, and enforcement (245–50).

But what does all of this imply for the future (Coda, 267–282)? For Christophers, the law has overcompensated for the imbalance in the monopoly-competition dialectic “to such a degree that excess monopoly is now capital’s existential problem” (269). However, given the specific features of the post-1970s context just recalled, a new “meaningful reversal of the law’s effective polarity” (278) seems unlikely, especially because nationally-bound competition law is impotent against contemporary transnational monopoly. Thus, for Christophers, we might be “finally transitioning to a new stage of capitalism… characterized above all by the crystallization of commanding monopoly powers at the international scale” (281). This would vindicate Lenin and those identifying “the dawn of a monopoly stage of capitalism… with a new imperialism.” Yet, whether this is true, “time will soon tell” (282).