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Can a socialist reform markets? The idea might sound like a contradiction. But anyone interested in the health of the American economy needs to take a hard look at the policies of the often-caricatured Sen. Bernard Sanders. His ideas force a reckoning with assumptions embedded in American politics about who gets to have power in the marketplace.

Markets are constructed by law. They can take as many forms as the set of background legal rules that constitute them. They aren’t a Platonic form instantiated in law, but a range of possibilities constituted by law. That said, we often think of “textbook” markets as populated by firms driven by shareholder wealth maximization, and characterized by strong property rights and enforcement of private contracts, with few other legally recognized forms of economic coordination. People across the political spectrum frequently essentialize this particular type of market as “the market” or as the “market solution.”

This rigidity makes no sense. Markets are always characterized by background coordination rights, determined by law, which decide who—Wall Street, corporate managers, workers, the public, or some combination—has the authority to manage economic activity. These coordination rights, allocated by law, have numerous permutations.

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Imagine, for example, a market characterized by legal rules disfavoring corporate consolidation and the domination of smaller players by more powerful ones, while favoring horizontal cooperation among small players, including in the form of labor unions. Consider also some changes to corporate law, which allocates coordination rights within firms. No law of nature compels corporate managers to run their organizations for the benefit of shareholders to the exclusion of their workers and the communities where they do business. Corporations were once thought of as quasi-public entities required to justify their special legal privileges by serving the public interest. Imagine, then, legal reforms that give workers a voice in corporate governance, and that modify the fiduciary duties of corporate directors so they run not only to shareholders but also to other stakeholders, including workers. This is also a market.

And it’s very much the sort of market that Sanders favors, judging by his detailed plan on antitrust and corporate law reform, together with his decades-long support of labor organizing. The central, unifying theme of this plan is to expand democratic participation in the economy while breaking up the consolidation of economic power and control. Its underlying goal is to disperse rather than concentrate economic coordination rights: allowing consumers, workers, and small firms to participate more fully in economic coordination.

The current permissive landscape of corporate mergers and acquisitions too often results only in short-term shareholder profits, and fees for investment bankers and lawyers, while undermining workers, re-investment in the business, research and development, and communities. The Sanders plan targets this problem. It would “institute bright-line merger guidelines that set caps for vertical mergers, horizontal mergers, and total market share.” It also promises to undo recent mergers that have caused harm, and to unwind companies that have acquired dominant positions in their markets, if they have wielded that power in harmful ways. Sanders specifically cites consolidation in agribusiness, the hospital sector, and telecommunications for social and economic harms to workers and the public.

The plan also aims to “end institutional deference to the consumer welfare standard.” The legal standard, distilled by conservative jurist Robert Bork in the 1970s and adopted widely thereafter, operates across antitrust law as a kind of meta-rule that bends legal doctrine and government agency practice toward using speculative consumer benefits to justify corporate power. In the context of mergers, it serves as a smoke screen for productive “efficiencies” that frequently consist of mass layoffs and in shutting down operations in favor of on-paper, short-term economic gains to a few. Sanders would direct antitrust regulators to consider factors beyond cost savings—which frequently don’t reach or benefit consumers anyway—with a focus upon preserving fair competition.

The Sanders plan also emphasizes the executive branch’s authority to make meaningful enforcement choices and to define the rules of fair competition. It begins with a stark assessment: “The Federal Trade Commission has failed its mission...Even as it has handled monopolists with kid gloves, it has attacked the organizing efforts of workers and professionals, including in the gig economy.” In addition to reversing these enforcement choices, Sanders says the FTC should more aggressively define the rules of fair competition. The agency already has considerable rule-making authority it isn’t using. The plan would ban mandatory arbitration clauses, noncompete clauses, and certain other facially unfair contractual provisions, while empowering the FTC to do more.

Sanders’ proposal would also change the character of corporations themselves. Corporations are creatures of the state; their behavior is already driven and constrained by legal norms. It was a judge who ruled that Jim Buckmaster and Craig Newmark, the creators of Craigslist, were not permitted to protect their community-oriented approach to running their successful business, forcing them to accommodate their powerful, monetization-minded shareholder, eBay, in a joust for corporate control. Sanders’ plan would institute federal corporate charters, using them to modify the shareholder primacy norm, including workers and other stakeholders’ interests in corporate decision-making. It would also provide directly for a worker role in corporate governance, through the election of corporate directors.

Sanders’ plan shows he is willing to radically reconstruct markets—and his team knows the details well enough to do so. It also avoids the orthodoxy that largely suffuses economic policy thinking. Even a progressive version of that orthodoxy—one that disregards the ground-up legal creation of markets and conceptualizes any changes to the existing rules in terms of discrete “market failures”—is likely to seriously limit real changes. If instead she or he recognizes that both real-world markets and economists’ theoretical models are deeply constituted by the background legal rules that create them, then a president will have removed the most powerful internal obstacles to creating an economy that truly works for all.

Sanjukta Paul is assistant professor of law at Wayne State University. She studies antitrust and labor regulation, and also teaches corporations.

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