The Imitation Economy: How AT&T’s contestability doctrine transformed the neoliberal project
- Publication Type:
- Thesis
- Issue Date:
- 2021
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During the 1930s neoliberals began a project to construct a global economic system, coordinated by 'the' market transmitting prices through telecommunications channels. The market they had conceived was an information processor, truth verifier and regulator of itself through competition, the dynamic system that constantly updated prices. As Mirowski identified, the constructed nature of the neoliberal market and its operation as an information system were central tenets of neoliberal thought.
This thesis argues that, contrary to neoliberal discourse extolling competition, the neoliberal movement developed an apparently contradictory, yet symbiotic relationship with monopoly capitalism. This can be traced back to the founding political philosophy of Friedrich Hayek, which was compatible with the formation of monopolistic industry structures based upon ICT networks. Alternatives to neoliberalism, such as various forms of liberalism and socialism were seen as incompatible with this 'reconstruction' of the market based on information. The synergies between neoliberalism and monopoly capitalism that would construct a data-driven market order were emergent in the 1930s, becoming more tangible in the 1970s following the invention of contestability theory by Bell Telephone Laboratories, the research arm of AT&T.
Contestability purported that the imitation of competition could be equivalent to actual competition under certain 'free' market conditions. Contestability was a network-based theory which converged with the neoliberal philosophy of the catallaxy, a term used by Hayek to describe a network of 'economies' coordinated by 'the' market. A historicised and hermeneutic analysis shows how contestability and the catallaxy taken together justified a new vision of global social order, one that would redefine 'competition' in ways which promoted both industry consolidation and global market expansion, whilst undermining public institutions through policies of deregulation and privatisation.
My analysis presents an original interpretation of Hayek's positions on monopolies, and shows how the Chicago School, in which he became a central figure, would transform the theoretical basis of the US antitrust regime thereby legitimating an expanded role for monopolies as planners of the market order.
The thesis also traces the heretofore unexamined career of contestability from obscure theory to the legal architecture of international trade. This is further explored in a case study showing how contestability facilitated Australia's economic integration with the international economy. The thesis establishes the importance of contestability at the intersection between neoliberal political economy and the corporate control of digital information, manifest in the rise of 'platform monopolies' of which AT&T was an early example.
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