As part of their Center on Finance, Law & Policy Blue Bag Lunch Series, the Ford School of Public Policy hosted University of Michigan business and sociology professor Jerry Davis to discuss how corporate power has changed throughout the 21st century and why Davis believes we need new regulations.
Davis’ most recent work focuses on corporations as a social and economic vehicle and examines how to tame them, points discussed during his talk.
Davis said he began thinking more about antitrust laws, rules for controlling monopolies and promoting competition after a sabbatical in California. He said he was particularly struck by the broad political consensus to revive antitrust law.
“It’s a weird time that we have so much political consensus on this idea that we need to re-invoke antitrust, revive the spirit of Brandeis and sort of break up big corporations,” Davis said. “What seems most shocking is the extent to which traditional listed corporations are disappearing and that the forms that we’re seeing don’t fit into the categories that we’re used to. And I think that provides a bit of a challenge to this whole effort to use antitrust as the right vehicle.”
Davis emphasized that much of this desire for reform comes as new technology has lowered transaction costs of engaging with markets, resulting in the rapid reshaping of corporations.
“What if everybody carried with them a tiny supercomputer communicator that allowed them to look up the prices for everything in the world all day every day and they could create contracts for inputs with random strangers, and track their performance in real time?” Davis said.
He pointed to various examples of the cheap ways to engage with free markets, including the outsourcing of production, spot labor markets and new distribution systems. He also cited companies that have particularly made use of these methods, such as Nike, Uber and Amazon. Davis said COVID-19 only complicated these changes and their impact.
“A pandemic really accelerated people’s reliance on apps to see what the outside world looks like,” Davis said. “More and more people relied on the internet to know what was going on in the outside world.”
LSA junior Anthony Marx said he was particularly interested in how people can regulate corporations that rely on new technologies.
“How can government, which is a very slow acting figure, keep up with the trends and innovations that are happening with technology and with corporations now?” Marx asked. “When you think about taming corporate power, it’s kind of the opposite that technology is becoming so complicated that even the people in Congress don’t really understand the technology that they’re trying to regulate. I think that’s very dangerous.”
Marx also said he was interested to learn how the power of changing corporations related to his major, environmental studies.
“As an environment major and a business minor, I’m always interested in the intersection between business and sustainability,” Marx said. “We had a really interesting conversation in class about ‘is economic growth ever going to be sustainable?’ I wanted to get this perspective from somebody who may not be a professor in PitE (Program in the Environment).”
Davis emphasized the need to develop new tools to tame the power of corporations, arguing that traditional understandings of employees, firms, industry and size need to change, especially given the complications from remote work.
“I think there’s a misfit between our simple categories and what we actually encounter in the world today,” Davis said. “It gets complicated. It’s not a trivial problem. I would say traditional antitrust is going to be tricky here. We’ve got really different tools for really different kinds of architecture.”
Daily News Contributor Ethan VanValkenburg can be reached at vanvalea@umich.edu.