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Attempting to ease tensions with China to make cooperation on global public health possible won’t work, partly because Beijing cannot credibly commit to being more transparent and cooperative in the future.

Xi did not want to facilitate an international response to COVID-19 that could have attributed blame to China or isolated it through travel restrictions, either of which might have damaged the regime’s domestic legitimacy. Instead, Xi leveraged the pandemic to his advantage: China’s suppression of the virus became a matter of national pride, held up by Beijing in sharp contrast to the experience of the United States.

But in case cooperation fails, it must have a backup plan to rally allies and partners to provide a much greater share of global public goods, even if that means shouldering more of the costs.

as a number of U.S. embassy officials told the foreign policy analyst Colin Kahl and me for our book Aftershocks, this team’s cooperation with the Chinese government became more challenging as U.S.-Chinese rivalry intensified, largely because of China’s actions.

When COVID-19 hit, the Chinese Communist Party (CCP) maintained near-absolute secrecy. All channels of communication between Beijing and Washington went silent, as they did between Beijing and other governments. Chinese leaders sought to conceal vital information about the emerging epidemic in China from the rest of the world, even attempting to prevent Chinese scientists from sharing the genetic sequence of the virus with scientists in other countries.

It is impossible to say for certain why the Chinese government behaved the way it did, but secrecy and control make sense in light of what the vast majority of China experts believe to be Xi’s top priority: regime survival.

For China’s leaders, the pandemic revealed the inexorable decline of the West, confirmed Beijing’s power and capabilities, and created more latitude for the CCP to do as it wished.

according to the UN, the pandemic could force a total of 490 million people into poverty—defined as the loss of access to clean water, adequate food, or shelter—pushing the global poverty rate to around seven percent by 2030, compared with the pre-pandemic target of three percent. 

Contrary to popular belief, some senior Trump administration officials grasped the national security threat posed by the virus faster than their European counterparts did. Top officials in the National Security Council began focusing on the pandemic in early January, just days after news of the outbreak in Wuhan, China, became public.

ven though Pottinger and other NSC officials were wise to the danger, they ultimately failed to persuade Trump to make the necessary preparations to deal with the pandemic when it inevitably reached the United States. 

As the administration began to formulate its response, those who favored a more comprehensive public health approach both at home and abroad were excluded or marginalized at crucial moments. The result was that the Trump administration focused more on holding China responsible for the outbreak and reducing U.S. reliance on Beijing than on the minutiae of global public health policy or the hard work of rallying the world to tackle the pandemic.

the pandemic and China’s response to it helped unify the administration behind a more comprehensive strategy to push back against Beijing. Between March 2020 and the end of the year, the senior official said, the United States put in place more containment measures than it had in the previous three years, including restrictions on Chinese technology firms, sanctions on Chinese officials, looser regulations on diplomatic contacts with Taiwan, and recognition of the repression in Xinjiang as a genocide. In this sense, the pandemic was a pivotal moment in the U.S.-Chinese rivalry. 

Competition between the two countries overwhelmed everything else, including U.S. cooperation with allies on the pandemic, leaving a global leadership vacuum that no one could fill.

The EU tried to step up by increasing funding for the WHO and for COVAX, the global initiative to share vaccines, but it never came close to organizing a global response. China’s assertive foreign policy, and its attempts to use pandemic assistance to advance its interests, aggravated European leaders and convinced them to harden their positions toward China throughout the course of 2020. 

During this period, there was hardly any international cooperation on vaccine development or distribution, no coordination on travel restrictions or the distribution of medical supplies, and limited cooperation on achieving a cessation of hostilities in conflict zones

The economic disruption caused by COVID-19 devastated low-income countries, which received little in the way of international assistance. Especially hard hit were countries, such as Bangladesh, that had made significant development gains in the last two decades and were propelling themselves into the lower tier of middle-income economies.

The United States needs a strategy to address transnational threats under the conditions of great-power competition. It must aim to cooperate with rivals, especially China, to prepare for future pandemics and to tackle climate change

Pandemics are not the only transnational threat that promises to intensify great-power rivalry and diminish the prospects for much-needed cooperation. Climate change could do the same.

Rather than unite the world around a common purpose, climate change is likely to deepen competition between major powers, especially as the transition away from fossil fuels creates economic winners and losers.

Countries that aggressively decarbonize could place sanctions and other trade restrictions on countries that do not, leading to counterresponses and new trade wars.

the impediments to cooperation between Europe and China on climate change “are becoming higher” and warn that “decision-makers must not underestimate the highly competitive aspects of how China is changing its energy production and consumption.” 

The United States and Europe will both compete with China for access to raw materials and in developing the technology needed to make their economies carbon neutral: magnets, batteries, high-performance ceramics, and light-emitting diodes, among other things

even if the U.S. government remains broadly aligned with Europe on climate policy, the Europeans could still become disaffected if Congress blocks meaningful climate action, such as commitments to cut carbon emissions or invest in clean technology. This, in turn, could diminish Europe’s willingness to help uphold the U.S.-led international order.

If, on the one hand, they mean softening U.S. rhetoric without conceding much of substance to China, they would do well to look to Europe, where governments were much more inclined than the Trump administration to cooperate with China, but China did not take them up on the offer.

If, on the other hand, they mean unilaterally making major geopolitical concessions to China—on its territorial acquisitions in the South China Sea, for instance, or the status of Taiwan—the United States would not only pay an extremely high price but also likely embolden Beijing further without actually securing cooperation on pandemics or climate change beyond what Beijing has already offered.

There is no getting around strategic competition with Beijing: it is deeply embedded in the international order, mainly because China seeks to expand its sphere of influence in Asia at the expense of the United States and its allies, which are in turn committed to thwarting Beijing’s plans.

The United States and China are also engaged in what Jake Sullivan, Biden’s national security adviser, recently called “a competition of models.” China is seeking to make the world safe for the CCP and to demonstrate the effectiveness of its system. This entails pushing back against what it sees as pressure from liberal democratic countries that could thwart its objectives. For its part, the United States worries about the negative externalities of Chinese authoritarianism, such as censorship of international criticism of Beijing or the export of its tools of repression to other countries.

The United States also worries about what would happen to the military balance of power if China secured an enduring advantage in key technologies.

Even in diplomacy, friction will be endemic to the U.S.-Chinese relationship and will affect the broader international order for the foreseeable future. Outright confrontation can be avoided—but competition cannot. 

This competition places real limits on cooperation. Take the arena of global public health: many studies on how to improve pandemic preparedness call on world leaders to dramatically strengthen the WHO, including by giving it the same power to enforce international health regulations as the International Atomic Energy Agency enjoys with nuclear nonproliferation rules

The problem is getting every government to agree to a universally applicable mechanism for sanctions or some other enforcement mechanism. China will not agree to any reform that would involve intrusive inspections of its scientific research facilities.

The need for cooperation on transnational threats must change how the United States competes with China—not whether it competes.

U.S. officials should not give up on China entirely; instead, they should make a good-faith effort to work with Beijing, both bilaterally and in multilateral settings. Recognizing that there are strict limits on U.S.-Chinese cooperation is not the same as saying that no cooperation is possible.

the real challenge is determining what to do when cooperation with China and other rivals falls short of what is required. The United States needs a backup plan to tackle shared challenges through coalitions of the willing.

When it comes to pandemic preparedness, this means fully supporting the WHO (including by pressing for needed reforms) but also forging a coalition of like-minded states: a global alliance for pandemic preparedness that would regularly convene at the head-of-state level and work alongside nongovernmental organizations and the private sector.

Crucially, whenever the WHO declared an international public health emergency, alliance members would coordinate on travel and trade restrictions, as well as on public messaging and financial penalties and sanctions. Those penalties and sanctions would be aimed at those states that failed to provide sufficient access to or fully cooperate with the WHO. The alliance would support, not supplant, the WHO.

Sustained, managed competition with China could potentially help the United States build bipartisan support for investments in clean technology that would prevent Beijing from gaining an enduring advantage in this area.

ut the United States and the European Union will also need to build coalitions of the willing to deal with the international security consequences of accelerated climate change, such as extreme weather events that threaten large numbers of people, and to address the foreign policy dimensions of climate action, including managing the risk that a shift away from fossil fuels could destabilize countries and regions that are dependent on oil exports.

Cooperation across this divide should always be the first choice in times of shared crisis, but as the COVID-19 pandemic has demonstrated, the U.S.-led constellation must always have a backup plan. It did not have one in 2020. It needs one for the next crisis

In a famous journal he kept from 1935 to 1944, the Romanian writer Mihail Sebastian chronicled an even more extreme shift in his own country. Like me, Sebastian was Jewish; like me, most of his friends were on the political right. In his journal, he described how, one by one, they were drawn to fascist ideology, like a flock of moths to an inescapable flame. He recounted the arrogance and confidence they acquired as they moved away from identifying themselves as Europeans—admirers of Proust, travelers to Paris—and instead began to call themselves blood-and-soil Romanians. He listened as they veered into conspiratorial thinking or became casually cruel. People he had known for years insulted him to his face and then acted as if nothing had happened. “Is friendship possible,” he wondered in 1937, “with people who have in common a whole series of alien ideas and feelings—so alien that I have only to walk in the door and they suddenly fall silent in shame and embarrassment?”

This is not 1937. Nevertheless, a parallel transformation is taking place in my own time, in the Europe that I inhabit and in Poland, a country whose citizenship I have acquired

the Dreyfus affair is most interesting because it was sparked by a single cause célèbre. Just one court case—one disputed trial—plunged an entire country into an angry debate, creating unresolvable divisions between people who had previously not known that they disagreed with one another. But this shows that vastly different understandings of what is meant by “France” were already there, waiting to be discovered

More important, though the people I am writing about here, the nativist ideologues, are perhaps not all as successful as they would like to be (about which more in a minute), they are not poor and rural, they are not in any sense victims of the political transition, and they are not an impoverished underclass. On the contrary, they are educated, they speak foreign languages, and they travel abroad—just like Sebastian’s friends in the 1930s.

What has caused this transformation

My answer is a complicated one, because I think the explanation is universal. Given the right conditions, any society can turn against democracy. Indeed, if history is anything to go by, all societies eventually will.

And it is taking place without the excuse of an economic crisis of the kind Europe suffered in the 1930s. Poland’s economy has been the most consistently successful in Europe over the past quarter century. Even after the global financial collapse in 2008, the country saw no recession. What’s more, the refugee wave that has hit other European countries has not been felt here at all. There are no migrant camps, and there is no Islamist terrorism, or terrorism of any kind.

in modern Britain, America, Germany, France, and until recently Poland, we have assumed that competition is the most just and efficient way to distribute power. The best-run businesses should make the most money. The most appealing and competent politicians should rule. The contests between them should take place on an even playing field, to ensure a fair outcome.

All of these debates, whether in 1890s France or 1990s Poland, have at their core a series of important questions: Who gets to define a nation? And who, therefore, gets to rule a nation? For a long time, we have imagined that these questions were settled—but why should they ever be?

the illiberal one-party state, now found all over the world—think of China, Venezuela, Zimbabwe—was first developed by Lenin, in Russia, starting in 1917. In the political-science textbooks of the future, the Soviet Union’s founder will surely be remembered not for his Marxist beliefs, but as the inventor of this enduring form of political organization.

Unlike Marxism, the Leninist one-party state is not a philosophy. It is a mechanism for holding power. It works because it clearly defines who gets to be the elite—the political elite, the cultural elite, the financial elite.

In monarchies such as prerevolutionary France and Russia, the right to rule was granted to the aristocracy, which defined itself by rigid codes of breeding and etiquette. In modern Western democracies, the right to rule is granted, at least in theory, by different forms of competition: campaigning and voting, meritocratic tests that determine access to higher education and the civil service, free markets

Two decades ago, different understandings of “Poland” must already have been present too, just waiting to be exacerbated by chance, circumstance, and personal ambition

Lenin’s one-party state was based on different values. It overthrew the aristocratic order. But it did not put a competitive model in place. The Bolshevik one-party state was not merely undemocratic; it was also anticompetitive and antimeritocratic. Places in universities, civil-service jobs, and roles in government and industry did not go to the most industrious or the most capable. Instead, they went to the most loyal.

As Hannah Arendt wrote back in the 1940s, the worst kind of one-party state “invariably replaces all first-rate talents, regardless of their sympathies, with those crackpots and fools whose lack of intelligence and creativity is still the best guarantee of their loyalty.”

Lenin’s one-party system also reflected his disdain for the idea of a neutral state, of apolitical civil servants and an objective media. He wrote that freedom of the press “is a deception.” He mocked freedom of assembly as a “hollow phrase.” As for parliamentary democracy itself, that was no more than “a machine for the suppression of the working class.”

These parties tolerate the existence of political opponents. But they use every means possible, legal and illegal, to reduce their opponents’ ability to function and to curtail competition in politics and economics. They dislike foreign investment and criticize privatization, unless it is designed to benefit their supporters. They undermine meritocracy. Like Donald Trump, they mock the notions of neutrality and professionalism, whether in journalists or civil servants. They discourage businesses from advertising in “opposition”—by which they mean illegitimate—media.

nepotism, state capture. But if you so choose, you can also describe it in positive terms: It represents the end of the hateful notions of meritocracy and competition, principles that, by definition, never benefited the less successful. A rigged and uncompetitive system sounds bad if you want to live in a society run by the talented. But if that isn’t your primary interest, then what’s wrong with it?

If you are someone who believes that you deserve to rule, then your motivation to attack the elite, pack the courts, and warp the press to achieve your ambitions is strong. Resentment, envy, and above all the belief that the “system” is unfair—these are important sentiments among the intellectuals of the Polish right.

Whatever mistakes the party might make, whatever laws it might break, at least the “truth” about Smolensk would finally be told.

the polarizing political movements of 21st-century Europe demand much less of their adherents. They don’t require belief in a full-blown ideology, and thus they don’t require violence or terror police. They don’t force people to believe that black is white, war is peace, and state farms have achieved 1,000 percent of their planned production. Most of them don’t deploy propaganda that conflicts with everyday reality.

yet all of them depend, if not on a Big Lie, then on what the historian Timothy Snyder once told me should be called the Medium-Size Lie, or perhaps a clutch of Medium-Size Lies. To put it differently, all of them encourage their followers to engage, at least part of the time, with an alternative reality. Sometimes that alternative reality has developed organically; more often, it’s been carefully formulated, with the help of modern marketing techniques, audience segmentation, and social-media campaigns.

In Hungary, the lie is unoriginal: It is the belief, shared by the Russian government and the American alt-right, in the superhuman powers of George Soros, the Hungarian Jewish billionaire who is supposedly plotting to bring down the nation through the deliberate importation of migrants, even though no such migrants exist in Hungary.

In Poland, at least the lie is sui generis. It is the Smolensk conspiracy theory: the belief that a nefarious plot brought down the president’s plane in April 2010.

The truth, as it began to emerge, was not comforting to the Law and Justice Party or to its leader, the dead president’s twin brother. The plane had taken off late; the president was likely in a hurry to land, because he wanted to use the trip to launch his reelection campaign. There was thick fog in Smolensk, which did not have a real airport, just a landing strip in the forest; the pilots considered diverting the plane, which would have meant a drive of several hours to the ceremony. After the president had a brief phone call with his brother, his advisers apparently pressed the pilots to land. Some of them, against protocol, walked in and out of the cockpit during the flight. Also against protocol, the chief of the air force came and sat beside the pilots. “Zmieścisz się śmiało”—“You’ll make it, be bold,” he said. Seconds later, the plane collided with the tops of some birch trees, rolled over, and hit the ground.

When, some weeks after the election, European institutions and human-rights groups began responding to the actions of the Law and Justice government, they focused on the undermining of the courts and public media. They didn’t focus on the institutionalization of the Smolensk conspiracy theory, which was, frankly, just too weird for outsiders to understand. And yet the decision to put a fantasy at the heart of government policy really was the source of the authoritarian actions that followed.

Although the Macierewicz commission has never produced a credible alternate explanation for the crash, the Smolensk lie laid the moral groundwork for other lies. Those who could accept this elaborate theory, with no evidence whatsoever, could accept anything.

picking apart personal and political motives is extremely difficult. That’s what I learned from the story of Jacek Kurski, the director of Polish state television and the chief ideologist of the Polish illiberal state. He started out in the same place, at the same time, as his brother, Jarosław Kurski, who edits the largest and most influential liberal Polish newspaper. They are two sides of the same coin.

The Smolensk conspiracy theory, like the Hungarian migration conspiracy theory, served another purpose: For a younger generation that no longer remembered Communism, and a society where former Communists had largely disappeared from politics, it offered a new reason to distrust the politicians, businesspeople, and intellectuals who had emerged from the struggles of the 1990s and now led the country.

More to the point, it offered a means of defining a new and better elite. There was no need for competition, or for exams, or for a résumé bristling with achievements. Anyone who professes belief in the Smolensk lie is by definition a true patriot—and, incidentally, might well qualify for a government job.

Hungary’s belated reckoning with its Communist past—putting up museums, holding memorial services, naming perpetrators—did not, as I thought it would, help cement respect for the rule of law, for restraints on the state, for pluralism

16 years after the Terror Háza’s opening, Hungary’s ruling party respects no restraints of any kind. It has gone much further than Law and Justice in politicizing the state media and destroying the private media, achieving the latter by issuing threats and blocking access to advertising. It has created a new business elite that is loyal to Orbán.

Schmidt embodies what the Bulgarian writer Ivan Krastev recently described as the desire of many eastern and central Europeans to “shake off the colonial dependency implicit in the very project of Westernization,” to rid themselves of the humiliation of having been imitators, followers of the West rather than founders.

Listening to her, I became convinced that there was never a moment when Schmidt’s views “changed.” She never turned against liberal democracy, because she never believed in it, or at least she never thought it was all that important. For her, the antidote to Communism is not democracy but an anti-Dreyfusard vision of national sovereignty

It’s clear that the Medium-Size Lie is working for Orbán—just as it has for Donald Trump—if only because it focuses the world’s attention on his rhetoric rather than his actions.

I described my 1999 New Year’s Eve party to a Greek political scientist. Quietly, he laughed at me. Or rather, he laughed with me; he didn’t mean to be rude. But this thing I was calling polarization was nothing new. “The post-1989 liberal moment—this was the exception,” Stathis Kalyvas told me. Polarization is normal. More to the point, I would add, skepticism about liberal democracy is also normal. And the appeal of authoritarianism is eternal.

Americans, with our powerful founding story, our unusual reverence for our Constitution, our relative geographic isolation, and our two centuries of economic success, have long been convinced that liberal democracy, once achieved, cannot be altered. American history is told as a tale of progress, always forward and upward, with the Civil War as a kind of blip in the middle, an obstacle that was overcome.

In Greece, history feels not linear but circular. There is liberal democracy and then there is oligarchy. Then there is liberal democracy again. Then there is foreign subversion, then there is an attempted Communist coup, then there is civil war, and then there is dictatorship. And so on, since the time of the Athenian republic.

In truth, the argument about who gets to rule is never over, particularly in an era when people have rejected aristocracy, and no longer believe that leadership is inherited at birth or that the ruling class is endorsed by God

Democracy and free markets can produce unsatisfying outcomes, after all, especially when badly regulated, or when nobody trusts the regulators, or when people are entering the contest from very different starting points. Sooner or later, the losers of the competition were always going to challenge the value of the competition itself.

More to the point, the principles of competition, even when they encourage talent and create upward mobility, don’t necessarily answer deeper questions about national identity, or satisfy the human desire to belong to a moral community.

The authoritarian state, or even the semi-authoritarian state—the one-party state, the illiberal state—offers that promise: that the nation will be ruled by the best people, the deserving people, the members of the party, the believers in the Medium-Size Lie.

Think about the traits that creative people possess. Creative people don’t follow the crowds; they seek out the blank spots on the map. Creative people wander through faraway and forgotten traditions and then integrate marginal perspectives back to the mainstream. Instead of being fastest around the tracks everybody knows, creative people move adaptively through wildernesses nobody knows.

students have to jump through ever-more demanding, preassigned academic hoops. Instead of developing a passion for one subject, they’re rewarded for becoming professional students, getting great grades across all subjects, regardless of their intrinsic interests. Instead of wandering across strange domains, they have to prudentially apportion their time, making productive use of each hour.

Then they move into a ranking system in which the most competitive college, program and employment opportunity is deemed to be the best. There is a status funnel pointing to the most competitive colleges and banks and companies, regardless of their appropriateness.

Then they move into businesses in which the main point is to beat the competition, in which the competitive juices take control and gradually obliterate other goals

We live in a culture that nurtures competitive skills. And they are necessary: discipline, rigor and reliability. But it’s probably a good idea to try to supplement them with the skills of the creative monopolist: alertness, independence and the ability to reclaim forgotten traditions.

If anything, analysts point out, Amazon offers at least one major advantage over many other companies, which is that its founder and chief executive, Jeff Bezos, has created a culture in which employees typically know exactly where they stand. “It’s a super attention-rich environment,” said Marcus Buckingham, an author and founder of the firm TMBC, which advises large companies on employee evaluation and performance. “There’s a lot of critical attention. They’re almost never ignored.”

The legal profession, one of the most brutal when it comes to pace and time commitment, illuminates the economic logic of a system where a large initial cohort of workers is gradually culled until only a small fraction are left.

The so-called Cravath system, named after the prestigious New York law firm known today as Cravath, Swaine & Moore, began to be put in place in the early 20th century. The firm and its imitators hired a large class of entry-level associates from the top law schools in the country, then relentlessly sifted them out over a period of several years, at the end of which only the most brilliant and productive — historically about one in 10 or 15 — became partners.

Those who did not make partner got first-rate legal training along the way, though, and were almost always able to land respectable jobs at lesser firms or as in-house corporate lawyers. For Cravath, it was also a plus: The partners made good money billing out its associates at top-of-market rates.

The thinning process even has its own name among scholars of law firms: the tournament.

Variations on the tournament are also the norm at elite management consulting firms and investment banks.

in many cases, many of the overachievers who are candidates for upper management at companies like Amazon welcome the breakneck pace and unyielding expectations. They just want to know that the system will be meritocratic. “We don’t mind competition,” he said. “We mind unfair competition.”

But there are some signs of change, as more and more young highly credentialed workers acknowledge that they can’t fulfill their responsibilities as husbands, wives, parents and friends while ascending through their organizations.

As in previous decades, the legal profession may hint at what’s to come. Alternative work arrangements are proliferating, and many previously elite firms are finding they no longer have the profits or the partnership slots to make the Cravath system work, abandoning the field of play to only a tiny number of ultrasuccessful firms.

“Amazon is at the top of the food chain,” Professor Henderson said. “Maybe they can get away with it. But most firms can’t rank and yank.”

That may not be true in the future: If market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. “The impact on innovation can be the most important competitive effect” in an antitrust case

Yet Google’s monopoly means some features and prices that competitors offered never made it in front of customers. Yelp Inc., which in 2004 began aggregating detailed information and user reviews of local services, such as restaurants and stores, claims Google altered its search results to hurt Yelp and help its own competing service. While Yelp survived, it has retreated from Europe, and several similar local search services have faded.

In a 2005 paper, Mr. Scherer found that Standard Oil was indeed a prolific generator of patents in its early years, but that slowed once it achieved dominance.

Standard Oil and AT&T used trusts, regulations and patents to keep out or co-opt competitors. They were respected but unloved.

By contrast, Google and Facebook give away their main product, while Amazon undercuts traditional retailers so aggressively it may be holding down inflation. None enjoys a government-sanctioned monopoly; all invest prodigiously in new products.

All are among the public’s most loved brands, according to polls by Morning Consult.

Yet there are also important parallels. The monopolies of old and of today were built on proprietary technology and physical networks that drove down costs while locking in customers, erecting formidable barriers to entry.

. If they’re imposing a cost, it may not be what customers pay but the products they never see.

When the federal government sued to break up Standard Oil, the Supreme Court acknowledged business acumen was important to the company’s early success, but concluded that was eventually supplanted by a single-minded determination to drive others out of the market.

Amazon hasn’t yet reached the same market share as Google or Facebook but its position is arguably even more impregnable because it enjoys both physical and technological barriers to entry. Its roughly 75 fulfillment centers and state-of-the art logistics (including robots) put it closer, in time and space, to customers than any other online retailer.

“Just like people joined Facebook because everyone else was on Facebook, the biggest competitive advantage AT&T had was that it was interconnected,”

Early in the 20th century, AT&T began buying up local competitors and refusing to connect independent exchanges to its long-distance lines, arousing antitrust complaints. By the 1920s, it was allowed to become a monopoly in exchange for universal service in the communities it served. By 1939, the company carried more than 90% of calls.

After AT&T was broken up into separate local and long-distance companies in 1982, telecommunication innovation blossomed, spreading to digital switching, fiber optics, cellphones—and the internet.

“There should be hundreds of Yelps. There’s not. No one is pitching investors to build a service that relies on discovery through Facebook or Google to grow, because venture capitalists think it’s a poor bet.”

At that same hearing Jeffrey Katz, then the chief executive of Nextag, responded, “That is like saying move to Panama if you don’t like the tax rate in America. It’s a fake choice because no one has Google’s scope or capabilities and consumers won’t, don’t, and in fact can’t jump.”

In 2013 the U.S. Federal Trade Commission concluded that even if Google had hurt competitors, it was to serve consumers better, and declined to bring a case. Since then, comparison sites such as Nextag have largely faded.

The different outcomes hinge in part on different approaches. European regulators are more likely to see a shrinking pool of competitors as inherently bad for both competition and consumers. American regulators are more open to the possibility that it could be natural and benign.

Internet platforms have high fixed and minimal operating costs, which favors consolidation into a few deep-pocketed competitors. And the more customers a platform has, the more useful it is to each individual customer—the “network effect.”

But a platform that confers monopoly in one market can be leveraged to dominate another. Facebook’s existing user base enabled it to become the world’s largest photo-sharing site through its purchase of Instagram in 2012 and the largest instant-messaging provider through its purchase of WhatsApp in 2014. It is also muscling into virtual reality through its acquisition of Oculus VR in 2014 and anonymous polling with its purchase of TBH last year.

Once a company like Google or Facebook has critical mass, “the venture capital looks elsewhere,” says Roger McNamee of Elevation Partners, a technology-focused private-equity firm. “There’s no point taking on someone with a three or four years head start.”

when Google launched its own comparison business, Google Shopping, those sites found themselves dropping deeper into Google’s search results. They accused Google of changing its algorithm to favor its own results. The company responded that its algorithm was designed to give customers the results they want.

As the dominant platform for third-party online sales, Amazon also has access to data it can use to decide what products to sell itself. In 2016 Capitol Forum, a news service that investigates anticompetitive behavior, reported that when a shopper views an Amazon private-label clothing brand, the accompanying list of items labeled “Customers Who Bought This Item Also Bought,” is also dominated by Amazon’s private-label brands. This, it says, restricts competing sellers’ access to a prime marketing space

In the face of such accusations, the probability of regulatory action—for now—looks low, largely because U.S. regulators have a relatively high bar to clear: Do consumers suffer?

“We think consumer welfare is the right standard,” Bruce Hoffman, the FTC’s acting director of the bureau of competition, recently told a panel on antitrust law and innovation. “We have tried other standards. They were dismal failures.”

What would remedies look like? Since Big Tech owes its network effects to data, one often-proposed fix is to give users ownership of their own data: the “social graph” of connections on Facebook, or their search history on Google and Amazon. They could then take it to a competitor.

A more drastic remedy would be to block acquisitions of companies that might one day be a competing platform. British regulators let Facebook buy Instagram in part because Instagram didn’t sell ads, which they argued made them different businesses. In fact, Facebook used Instagram to engage users longer and thus sell more ads

Ben Thompson, wrote in his technology newsletter Stratechery. Building a network is “extremely difficult, but, once built, nearly impregnable. The only possible antidote is another network that draws away the one scarce resource: attention.” Thus, maintaining competition on the internet requires keeping “social networks in separate competitive companies.”

How sound are these premises? Google’s and Facebook’s access to that data and network effects might seem like an impregnable barrier, but the same appeared to be true of America Online’s membership, Yahoo ’s search engine and Apple’s iTunes store, note two economists, David Evans and Richard Schmalensee, in a recent paper. All saw their dominance recede in the face of disruptive competition.

It’s possible Microsoft might have become the dominant company in search and mobile without the scrutiny the federal antitrust case brought. Throughout history, entrepreneurs have often needed the government’s help to dislodge a monopolist—and may one day need it again.

Cooper's lawsuit says she was rejected from competing even though she provided documentation that her testosterone levels had remained under the IOC's accepted limit for two years.

"USAPL denied Ms. Cooper's eligibility to compete because she is a transgender woman, withdrew her competition card because she is a transgender woman, and then went on to adopt a categorical ban on participation by transgender women athletes at USAPL competitions,"

"USA Powerlifting is not a fit for every athlete and for every medical condition or situation," the organization's Transgender Participation Policy states. "Simply, not all powerlifters are eligible to compete in USA Powerlifting."

The policy says USA Powerlifting is a "sports organization with rules and policies" that "apply to everyone to provide a level playing field."

"Men naturally have a larger bone structure, higher bone density, stronger connective tissue and higher muscle density than women," it says. "These traits, even with reduced levels of testosterone do not go away. While MTF [male-to-female] may be weaker and less muscle than they once were, the biological benefits given them at birth still remain over than of a female."

Cooper said Tuesday that she began lifting in 2018 and said training her body for the sport empowered her in ways she couldn't previously have imagined

"As a trans person, this took on additional meaning, because our bodies are so politicized and demonized regularly," she said.

"There are a myriad of factors that help determine someone's success in competition," Erin Maye Quade, advocacy director at Gender Justice, said Tuesday. "Anti-trans propaganda's fixation on a single factor lays bare their plot to perpetuate rigid ideas about how women are supposed to look and sound and act."

"I grew up pursuing Olympic dreams, and that was taken away from me in the sport of powerlifting," Cooper said. "I don't want anyone to experience what I and other trans athletes have and continue to experience."

Americans are consistently obsessed with certain questions: How can you keep track of students' performance if you don't test them constantly? How can you improve teaching if you have no accountability for bad teachers or merit pay for good teachers? How do you foster competition and engage the private sector? How do you provide school choice?

The answers Finland provides seem to run counter to just about everything America's school reformers are trying to do.

Finland has no standardized tests

Instead, the public school system's teachers are trained to assess children in classrooms using independent tests they create themselves.

As for accountability of teachers and administrators, Sahlberg shrugs. "There's no word for accountability in Finnish," he later told an audience at the Teachers College of Columbia University. "Accountability is something that is left when responsibility has been subtracted."

For Sahlberg what matters is that in Finland all teachers and administrators are given prestige, decent pay, and a lot of responsibility. A master's degree is required to enter the profession, and teacher training programs are among the most selective professional schools in the country. If a teacher is bad, it is the principal's responsibility to notice and deal with it

And while Americans love to talk about competition, Sahlberg points out that nothing makes Finns more uncomfortable.

There are no lists of best schools or teachers in Finland. The main driver of education policy is not competition between teachers and between schools, but cooperation

in Finland, school choice is noticeably not a priority, nor is engaging the private sector at all.

Decades ago, when the Finnish school system was badly in need of reform, the goal of the program that Finland instituted, resulting in so much success today, was never excellence. It was equity.

ince the 1980s, the main driver of Finnish education policy has been the idea that every child should have exactly the same opportunity to learn, regardless of family background, income, or geographic location. Education has been seen first and foremost not as a way to produce star performers, but as an instrument to even out social inequality.

this means that schools should be healthy, safe environments for children. This starts with the basics. Finland offers all pupils free school meals, easy access to health care, psychological counseling, and individualized student guidance.

Samuel Abrams, a visiting scholar at Columbia University's Teachers College, has addressed the effects of size and homogeneity on a nation's education performance by comparing Finland with another Nordic country: Norway. Like Finland, Norway is small and not especially diverse overall, but unlike Finland it has taken an approach to education that is more American than Finnish. The result? Mediocre performance in the PISA survey

the goal of educational policy in the U.S. -- as articulated by most everyone from President Obama on down -- is to preserve American competitiveness by doing the same thing. Finland's experience suggests that to win at that game, a country has to prepare not just some of its population well, but all of its population well, for the new economy. To possess some of the best schools in the world might still not be good enough if there are children being left behind.

Finland's dream was that we want to have a good public education for every child regardless of where they go to school or what kind of families they come from, and many even in Finland said it couldn't be done." Clearly, many were wrong. It is possible to create equality

Finland's experience shows that it is possible to achieve excellence by focusing not on competition, but on cooperation, and not on choice, but on equity.

In a brutality cascade the Chinese don’t become more like us as the competition continues. We become more like them. And that is indeed what’s happening

But China’s cybermercantilists regard deceit as a natural tool of warfare. Cyberattacks make perfect sense. Your competitors have worked hard to acquire intellectual property. Your system is more closed so innovation is not your competitive advantage. It is quicker and cheaper to steal. They will hate you for it, but who cares? They were going to hate you anyway. C’est la guerre.

But along comes China, an economic superpower with a more mercantilist mind-set. Many Chinese, at least in the military-industrial complex, see global economics as a form of warfare, a struggle for national dominance.

take a case in world affairs. The United States is a traditional capitalist nation that has championed an open-seas economic doctrine. We think everybody benefits if global economics is like a conversation, with maximum openness, mutual trust and free exchange.

The political world is rife with brutality cascades

Pretty soon the global economy looks less like Monopoly and more like a game of Risk, with a Chinese military-industrial complex on one part of the board and the Western military-industrial complex on another part.

Finally, you isolate the remaining violators and deliver a message: If you join our friendship circle and abide by our norms, the benefits will be overwhelming, but if you stay outside, the costs will be devastating.

This shift, combined with business-friendly tax and regulatory policy, ushered in a period of mergers and acquisitions that created megacorporations

In the past 20 years, more than 75 percent of American industries, from airlines to pharmaceuticals, have experienced increased concentration, and the average size of public companies has tripled. The results are a decline in entrepreneurship, stalled productivity growth, and higher prices and fewer choices for consumers.

Because Facebook so dominates social networking, it faces no market-based accountability. This means that every time Facebook messes up, we repeat an exhausting pattern: first outrage, then disappointment and, finally, resignation.

Over a decade later, Facebook has earned the prize of domination. It is worth half a trillion dollars and commands, by my estimate, more than 80 percent of the world’s social networking revenue. It is a powerful monopoly, eclipsing all of its rivals and erasing competition from the social networking category.

Facebook’s monopoly is also visible in its usage statistics. About 70 percent of American adults use social media, and a vast majority are on Facebook products

Over two-thirds use the core site, a third use Instagram, and a fifth use WhatsApp.

As a result of all this, would-be competitors can’t raise the money to take on Facebook. Investors realize that if a company gets traction, Facebook will copy its innovations, shut it down or acquire it for a relatively modest sum

Facebook’s dominance is not an accident of history. The company’s strategy was to beat every competitor in plain view, and regulators and the government tacitly — and at times explicitly — approved

The F.T.C.’s biggest mistake was to allow Facebook to acquire Instagram and WhatsApp. In 2012, the newer platforms were nipping at Facebook’s heels because they had been built for the smartphone, where Facebook was still struggling to gain traction. Mark responded by buying them, and the F.T.C. approved.

Neither Instagram nor WhatsApp had any meaningful revenue, but both were incredibly popular. The Instagram acquisition guaranteed Facebook would preserve its dominance in photo networking, and WhatsApp gave it a new entry into mobile real-time messaging.

When it hasn’t acquired its way to dominance, Facebook has used its monopoly position to shut out competing companies or has copied their technology.

In 2014, the rules favored curiosity-inducing “clickbait” headlines. In 2016, they enabled the spread of fringe political views and fake news, which made it easier for Russian actors to manipulate the American electorate.

As markets become more concentrated, the number of new start-up businesses declines. This holds true in other high-tech areas dominated by single companies, like search (controlled by Google) and e-commerce (taken over by Amazon)

I don’t blame Mark for his quest for domination. He has demonstrated nothing more nefarious than the virtuous hustle of a talented entrepreneur

It’s on our government to ensure that we never lose the magic of the invisible hand. How did we allow this to happen

a narrow reliance on whether or not consumers have experienced price gouging fails to take into account the full cost of market domination

It doesn’t recognize that we also want markets to be competitive to encourage innovation and to hold power in check. And it is out of step with the history of antitrust law. Two of the last major antitrust suits, against AT&T and IBM in the 1980s, were grounded in the argument that they had used their size to stifle innovation and crush competition.

It is a disservice to the laws and their intent to retain such a laserlike focus on price effects as the measure of all that antitrust was meant to do.”

Facebook is the perfect case on which to reverse course, precisely because Facebook makes its money from targeted advertising, meaning users do not pay to use the service. But it is not actually free, and it certainly isn’t harmless.

We pay for Facebook with our data and our attention, and by either measure it doesn’t come cheap.

The choice is mine, but it doesn’t feel like a choice. Facebook seeps into every corner of our lives to capture as much of our attention and data as possible and, without any alternative, we make the trade.

The vibrant marketplace that once drove Facebook and other social media companies to compete to come up with better products has virtually disappeared. This means there’s less chance of start-ups developing healthier, less exploitative social media platforms. It also means less accountability on issues like privacy.

The most problematic aspect of Facebook’s power is Mark’s unilateral control over speech. There is no precedent for his ability to monitor, organize and even censor the conversations of two billion people.

Facebook engineers write algorithms that select which users’ comments or experiences end up displayed in the News Feeds of friends and family. These rules are proprietary and so complex that many Facebook employees themselves don’t understand them.

What started out as lighthearted entertainment has become the primary way that people of all ages communicate online.

In January 2018, Mark announced that the algorithms would favor non-news content shared by friends and news from “trustworthy” sources, which his engineers interpreted — to the confusion of many — as a boost for anything in the category of “politics, crime, tragedy.”

As if Facebook’s opaque algorithms weren’t enough, last year we learned that Facebook executives had permanently deleted their own messages from the platform, erasing them from the inboxes of recipients; the justification was corporate security concerns.

No one at Facebook headquarters is choosing what single news story everyone in America wakes up to, of course. But they do decide whether it will be an article from a reputable outlet or a clip from “The Daily Show,” a photo from a friend’s wedding or an incendiary call to kill others.

Mark knows that this is too much power and is pursuing a twofold strategy to mitigate it. He is pivoting Facebook’s focus toward encouraging more private, encrypted messaging that Facebook’s employees can’t see, let alone control

Second, he is hoping for friendly oversight from regulators and other industry executives.

In an op-ed essay in The Washington Post in March, he wrote, “Lawmakers often tell me we have too much power over speech, and I agree.” And he went even further than before, calling for more government regulation — not just on speech, but also on privacy and interoperability, the ability of consumers to seamlessly leave one network and transfer their profiles, friend connections, photos and other data to another.

I don’t think these proposals were made in bad faith. But I do think they’re an attempt to head off the argument that regulators need to go further and break up the company. Facebook isn’t afraid of a few more rules. It’s afraid of an antitrust case and of the kind of accountability that real government oversight would bring.

We don’t expect calcified rules or voluntary commissions to work to regulate drug companies, health care companies, car manufacturers or credit card providers. Agencies oversee these industries to ensure that the private market works for the public good. In these cases, we all understand that government isn’t an external force meddling in an organic market; it’s what makes a dynamic and fair market possible in the first place. This should be just as true for social networking as it is for air travel or pharmaceuticals.

Just breaking up Facebook is not enough. We need a new agency, empowered by Congress to regulate tech companies. Its first mandate should be to protect privacy.

First, Facebook should be separated into multiple companies. The F.T.C., in conjunction with the Justice Department, should enforce antitrust laws by undoing the Instagram and WhatsApp acquisitions and banning future acquisitions for several years.

How would a breakup work? Facebook would have a brief period to spin off the Instagram and WhatsApp businesses, and the three would become distinct companies, most likely publicly traded.

Facebook is indeed more valuable when there are more people on it: There are more connections for a user to make and more content to be shared. But the cost of entering the social network business is not that high. And unlike with pipes and electricity, there is no good argument that the country benefits from having only one dominant social networking company.

others worry that the breakup of Facebook or other American tech companies could be a national security problem. Because advancements in artificial intelligence require immense amounts of data and computing power, only large companies like Facebook, Google and Amazon can afford these investments, they say. If American companies become smaller, the Chinese will outpace us.

The American government needs to do two things: break up Facebook’s monopoly and regulate the company to make it more accountable to the American people.

But the biggest winners would be the American people. Imagine a competitive market in which they could choose among one network that offered higher privacy standards, another that cost a fee to join but had little advertising and another that would allow users to customize and tweak their feeds as they saw fit

The cost of breaking up Facebook would be next to zero for the government, and lots of people stand to gain economically. A ban on short-term acquisitions would ensure that competitors, and the investors who take a bet on them, would have the space to flourish. Digital advertisers would suddenly have multiple companies vying for their dollars.

The Europeans have made headway on privacy with the General Data Protection Regulation, a law that guarantees users a minimal level of protection. A landmark privacy bill in the United States should specify exactly what control Americans have over their digital information, require clearer disclosure to users and provide enough flexibility to the agency to exercise effective oversight over time

The agency should also be charged with guaranteeing basic interoperability across platforms.

Finally, the agency should create guidelines for acceptable speech on social media

We will have to create similar standards that tech companies can use. These standards should of course be subject to the review of the courts, just as any other limits on speech are. But there is no constitutional right to harass others or live-stream violence.

These are difficult challenges. I worry that government regulators will not be able to keep up with the pace of digital innovation

I worry that more competition in social networking might lead to a conservative Facebook and a liberal one, or that newer social networks might be less secure if government regulation is weak

Professor Wu has written that this “policeman at the elbow” led IBM to steer clear “of anything close to anticompetitive conduct, for fear of adding to the case against it.”

Finally, an aggressive case against Facebook would persuade other behemoths like Google and Amazon to think twice about stifling competition in their own sectors, out of fear that they could be next.

The alternative is bleak. If we do not take action, Facebook’s monopoly will become even more entrenched. With much of the world’s personal communications in hand, it can mine that data for patterns and trends, giving it an advantage over competitors for decades to come.

This movement of public servants, scholars and activists deserves our support. Mark Zuckerberg cannot fix Facebook, but our government can.

"There's no word for accountability in Finnish," he later told an audience at the Teachers College of Columbia University. "Accountability is something that is left when responsibility has been subtracted."

Only a small number of independent schools exist in Finland, and even they are all publicly financed. None is allowed to charge tuition fees. There are no private universities, either. This means that practically every person in Finland attends public school, whether for pre-K or a Ph.D.

From his point of view, Americans are consistently obsessed with certain questions: How can you keep track of students' performance if you don't test them constantly? How can you improve teaching if you have no accountability for bad teachers or merit pay for good teachers? How do you foster competition and engage the private sector? How do you provide school choice?

Finland has no standardized tests. The only exception is what's called the National Matriculation Exam, which everyone takes at the end of a voluntary upper-secondary school, roughly the equivalent of American high school.

Instead, the public school system's teachers are trained to assess children in classrooms using independent tests they create themselves. All children receive a report card at the end of each semester, but these reports are based on individualized grading by each teacher.

"Oh," he mentioned at one point, "and there are no private schools in Finland."

what matters is that in Finland all teachers and administrators are given prestige, decent pay, and a lot of responsibility. A master's degree is required to enter the profession, and teacher training programs are among the most selective professional schools in the country. If a teacher is bad, it is the principal's responsibility to notice and deal with it.

"Real winners do not compete." It's hard to think of a more un-American idea, but when it comes to education, Finland's success shows that the Finnish attitude might have merits. There are no lists of best schools or teachers in Finland. The main driver of education policy is not competition between teachers and between schools, but cooperation.

the number of foreign-born residents in Finland doubled during the decade leading up to 2010, and the country didn't lose its edge in education. Immigrants tended to concentrate in certain areas, causing some schools to become much more mixed than others, yet there has not been much change in the remarkable lack of variation between Finnish schools in the PISA surveys across the same period.

Decades ago, when the Finnish school system was badly in need of reform, the goal of the program that Finland instituted, resulting in so much success today, was never excellence. It was equity.

Since the 1980s, the main driver of Finnish education policy has been the idea that every child should have exactly the same opportunity to learn, regardless of family background, income, or geographic location. Education has been seen first and foremost not as a way to produce star performers, but as an instrument to even out social inequality.

this means that schools should be healthy, safe environments for children. This starts with the basics. Finland offers all pupils free school meals, easy access to health care, psychological counseling, and individualized student guidance.

In fact, since academic excellence wasn't a particular priority on the Finnish to-do list, when Finland's students scored so high on the first PISA survey in 2001, many Finns thought the results must be a mistake. But subsequent PISA tests confirmed that Finland -- unlike, say, very similar countries such as Norway -- was producing academic excellence through its particular policy focus on equity.

Finally, in Finland, school choice is noticeably not a priority, nor is engaging the private sector at all.

Like Finland, Norway is small and not especially diverse overall, but unlike Finland it has taken an approach to education that is more American than Finnish. The result? Mediocre performance in the PISA survey. Educational policy, Abrams suggests, is probably more important to the success of a country's school system than the nation's size or ethnic makeup.

there were 18 states in the U.S. in 2010 with an identical or significantly smaller percentage of foreign-born residents than Finland

the goal of educational policy in the U.S. -- as articulated by most everyone from President Obama on down -- is to preserve American competitiveness by doing the same thing. Finland's experience suggests that to win at that game, a country has to prepare not just some of its population well, but all of its population well, for the new economy.

Finland's experience shows that it is possible to achieve excellence by focusing not on competition, but on cooperation, and not on choice, but on equity

The problem facing education in America isn't the ethnic diversity of the population but the economic inequality of society, and this is precisely the problem that Finnish education reform addressed. More equity at home might just be what America needs to be more competitive abroad.

Until 2001, deals worth more than $15 million had to be reported to the antitrust authorities. That year, the threshold was raised and indexed to economic growth, and is now $90 million.

For transactions involving few tangible assets such as in technology and pharmaceutical startups, the threshold is $360 million.

after the 2001 changes, the number of merger notifications dropped 70% and the number of mergers that didn’t require notification jumped nearly 50%

22% of markets for physicians are highly concentrated (according to federal guidelines), and they got that way mostly via acquisitions too small to be reported.

between 1997 and 2017 more than 4,000 acquisitions of kidney dialysis centers were proposed. About half were above the reporting threshold, and in 265 cases, the FTC required divestitures to resolve competition concerns

Among the half below the threshold, the FTC required just three divestitures. Two companies controlled about 31% of facilities in 1997. By 2016, two companies, DaVita Inc. and Fresenius Medical Care , controlled 77% of facilities

his preliminary results suggest the numbers of nurses per technician decline and patients per hemodialysis machine rise at facilities acquired in mergers below the reporting threshold. That, he said, could be evidence of reduced quality of care, though he acknowledged it could also reflect increased efficiency.

Before the change, around a third of merger investigations involved deals worth less than $50 million. After the change, the number of such deals investigated fell to close to zero.

pharmaceutical companies often halt development of competing drugs at startups they acquire, especially when the acquisition is just small enough to escape antitrust reporting requirements.

Wind and solar generators have gained substantial market share, and as battery costs fall, batteries paired with that green power are beginning to step into those roles by storing inexpensive green energy and discharging it after the sun falls or the wind dies.

President Biden is proposing to extend renewable-energy tax credits to stand-alone battery projects—installations that aren’t part of a generating facility—as part of his $2.3 trillion infrastructure plan, which could add fuel to an already booming market for energy storage.

renewables have become increasingly cost-competitive without subsidies in recent years, spurring more companies to voluntarily cut carbon emissions by investing in wind and solar power at the expense of that generated from fossil fuels.

the specter of more state and federal regulations to address climate change is accelerating the trend.

the combination of batteries and renewable energy is threatening to upend billions of dollars in natural-gas investments, raising concerns about whether power plants built in the past 10 years—financed with the expectation that they would run for decades—will become “stranded assets,” facilities that retire before they pay for themselves.

as batteries help wind and solar displace traditional power sources, some investors view the projects with caution, noting that they, too, could become victims of disruption in coming years, if still-other technological advances yield better ways to store energy.

most current batteries can deliver power only for several hours before needing to recharge. That makes them nearly useless during extended outages.

Duke Energy Corp. , a utility company based in Charlotte, N.C., that supplies electricity and natural gas in parts of seven states, is still looking to build additional gas-fired power plants. But it has started to rethink its financial calculus to reflect that the plants might need to pay for themselves sooner, because they might not be able to operate for as long.

To remedy that, Duke in public filings said it is considering shortening the plants’ expected lifespan from about 40 years to 25 years and recouping costs using accelerated depreciation, an accounting measure that would let the company write off more expenses earlier in the plants’ lives

It may also consider eventually converting the plants to run on hydrogen, which doesn’t result in carbon emissions when burned.

Much of the nation’s gas fleet, on the other hand, is relatively young, increasing the potential for stranded costs if widespread closures occur within the next two decades.

Gas plants that supply power throughout the day face the biggest risk of displacement. Such “baseload” plants typically need to run at 60% to 80% capacity to be economically viable, making them vulnerable as batteries help fill gaps in power supplied by solar and wind farms.

Today, such plants average 60% capacity in the U.S., according to IHS Markit, a data and analytics firm. By the end of the decade, the firm expects that average to fall to 50%, raising the prospect of bankruptcy and restructuring for the lowest performers.

“It’s just coal repeating itself.”

It took only a few years for inexpensive fracked gas to begin displacing coal used in power generation. Between 2011, shortly after the start of the fracking boom, and 2020, more than 100 coal plants with 95,000 megawatts of capacity were closed or converted to run on gas, according to the EIA. An additional 25,000 megawatts are slated to close by 2025.

Batteries are most often paired with solar farms, rather than wind farms, because of their power’s predictability and because it is easier to secure federal tax credits for that pairing.

Already, the cost of discharging a 100-megawatt battery with a two-hour power supply is roughly on par with the cost of generating electricity from the special power plants that operate during peak hours. Such batteries can discharge for as little as $140 a megawatt-hour, while the lowest-cost “peaker” plants—which fire up on demand when supplies are scarce—generate at $151 a megawatt-hour, according to investment bank Lazard.

Solar farms paired with batteries, meanwhile, are becoming competitive with gas plants that run all the time. Those types of projects can produce power for as little as $81 a megawatt-hour, according to Lazard, while the priciest of gas plants average $73 a megawatt-hour

Even in Texas, a state with a fiercely competitive power market and no emissions mandates, scarcely any gas plants are under construction, while solar farms and batteries are growing fast. Companies are considering nearly 88,900 megawatts of solar, 23,860 megawatts of wind and 30,300 megawatts of battery storage capacity in the state, according to the Electric Reliability Council of Texas. By comparison, only 7,900 megawatts of new gas-fired capacity is under consideration.

California last summer experienced the consequences of quickly reducing its reliance on gas plants. In August, during an intense heat wave that swept the West, the California grid operator resorted to rolling blackouts to ease a supply crunch when demand skyrocketed. In a postmortem published jointly with the California Public Utilities Commission and the California Energy Commission, the operator identified the rapid shift to solar and wind power as one of several contributing factors.

Mr. Morgan, who has closed a number of Vistra’s coal-fired and gas-fired plants since becoming CEO in 2016, said he anticipates most of the company’s remaining gas plants to operate for the next 20 years.

Quantum Energy Partners, a Houston-based private-equity firm, in the last several years sold a portfolio of six gas plants in Texas and three other states upon seeing just how competitive renewable energy was becoming. It is now working to develop more than 8,000 megawatts of wind, solar and battery projects in 10 states.

“We pivoted,” said Sean O’Donnell, a partner in the firm who helps oversee the firm’s power investments. “Everything that we had on the conventional power side, we decided to sell, given our outlook of increasing competition and diminishing returns.”

that’s particularly true on the I.R.A., which has to build all these things in the real world.

we’re trying to do industrial physical transformation at a speed and scale unheralded in American history. This is bigger than anything we have done at this speed ever.

The money is beginning to move out the door now, but we’re on a clock. Climate change is not like some other issues where if you don’t solve it this year, it is exactly the same to solve it next year. This is an issue where every year you don’t solve it, the amount of greenhouse gases in the atmosphere builds, warming builds, the effects compound

Solve, frankly, isn’t the right word there because all we can do is abate, a lot of the problems now baked in. So how is it going, and who can actually walk us through that?

Robinson Meyer is the founding executive editor of heatmap.news

why do all these numbers differ so much? How big is this thing?

in electric vehicles and in the effort, kind of this dual effort in the law, to both encourage Americans to buy and use electric vehicles and then also to build a domestic manufacturing base for electric vehicles.

on both counts, the data’s really good on electric vehicles. And that’s where we’re getting the fastest response from industry and the clearest response from industry to the law.

ROBINSON MEYER: Factories are getting planned. Steel’s going in the ground. The financing for those factories is locked down. It seems like they’re definitely going to happen. They’re permitted. Companies are excited about them. Large Fortune 500 automakers are confidently and with certainty planning for an electric vehicle future, and they’re building the factories to do that in the United States. They’re also building the factories to do that not just in blue states. And so to some degree, we can see the political certainty for electric vehicles going forward.

in other parts of the law, partially due to just vagaries of how the law is being implemented, tax credits where the fine print hasn’t worked out yet, it’s too early to say whether the law is working and how it’s going and whether it’s going to accomplish its goal

EZRA KLEIN: I always find this very funny in a way. The Congressional Budget Office scored it. They thought it would make about $380 billion in climate investments over a decade. So then you have all these other analyses coming out.

But there’s actually this huge range of outcomes in between where the thing passes, and maybe what you wanted to have happen happens. Maybe it doesn’t. Implementation is where all this rubber meets the road

the Rhodium Group, which is a consulting firm, they think it could be as high as $522 billion, which is a big difference. Then there’s this Goldman Sachs estimate, which the administration loves, where they say they’re projecting $1.2 trillion in incentives —

ROBINSON MEYER: All the numbers differ because most of the important incentives, most of the important tax credits and subsidies in the I.R.A., are uncapped. There’s no limit to how much the government might spend on them. All that matters is that some private citizen or firm or organization come to the government and is like, hey, we did this. You said you’d give us money for it. Give us the money.

because of that, different banks have their own energy system models, their own models of the economy. Different research groups have their own models.

we know it’s going to be wrong because the Congressional Budget Office is actually quite constrained in how it can predict how these tax credits are taken up. And it’s constrained by the technology that’s out there in the country right now.

The C.B.O. can only look at the number of electrolyzers, kind of the existing hydrogen infrastructure in the country, and be like, well, they’re probably all going to use these tax credits. And so I think they said that there would be about $5 billion of take up for the hydrogen tax credits.

But sometimes money gets allocated, and then costs overrun, and there delays, and you can’t get the permits, and so on, and the thing never gets built

the fact that the estimates are going up is to them early evidence that this is going well. There is a lot of applications. People want the tax credits. They want to build these new factories, et cetera.

a huge fallacy that we make in policy all the time is assuming that once money is allocated for something, you get the thing you’re allocating the money for. Noah Smith, the economics writer, likes to call this checkism, that money equals stuff.

EZRA KLEIN: They do not want that, and not wanting that and putting every application through a level of scrutiny high enough to try and make sure you don’t have another one

I don’t think people think a lot about who is cutting these checks, but a lot of it is happening in this very obscure office of the Department of Energy, the Loan Program Office, which has gone from having $40 billion in lending authority, which is already a big boost over it not existing a couple decades ago, to $400 billion in loan authority,

the Loan Program Office as one of the best places we have data on how this is going right now and one of the offices that’s responded fastest to the I.R.A.

the Loan Program Office is basically the Department of Energy’s in-house bank, and it’s kind of the closest thing we have in the US to what exists in other countries, like Germany, which is a State development bank that funds projects that are eventually going to be profitable.

It has existed for some time. I mean, at first, it kind of was first to play after the Recovery Act of 2009. And in fact, early in its life, it gave a very important loan to Tesla. It gave this almost bridge loan to Tesla that helped Tesla build up manufacturing capacity, and it got Tesla to where it is today.

EZRA KLEIN: It’s because one of the questions I have about that office and that you see in some of the coverage of them is they’re very afraid of having another Solyndra.

Now, depending on other numbers, including the D.O.E., it’s potentially as high as $100 billion, but that’s because the whole thing about the I.R.A. is it’s meant to encourage the build-out of this hydrogen infrastructure.

EZRA KLEIN: I’m never that excited when I see a government loans program turning a profit because I think that tends to mean they’re not making risky enough loans. The point of the government should be to bear quite a bit of risk —

And to some degree, Ford now has to compete, and US automakers are trying to catch up with Chinese EV automakers. And its firms have EV battery technology especially, but just have kind of comprehensive understanding of the EV supply chain that no other countries’ companies have

ROBINSON MEYER: You’re absolutely right that this is the key question. They gave this $9.2 billion loan to Ford to build these EV battery plants in Kentucky and Tennessee. It’s the largest loan in the office’s history. It actually means that the investment in these factories is going to be entirely covered by the government, which is great for Ford and great for our build-out of EVs

And to some degree, I should say, one of the roles of L.P.O. and one of the roles of any kind of State development bank, right, is to loan to these big factory projects that, yes, may eventually be profitable, may, in fact, assuredly be profitable, but just aren’t there yet or need financing that the private market can’t provide. That being said, they have moved very slowly, I think.

And they feel like they’re moving quickly. They just got out new guidelines that are supposed to streamline a lot of this. Their core programs, they just redefined and streamlined in the name of speeding them up

However, so far, L.P.O. has been quite slow in getting out new loans

I want to say that the pressure they’re under is very real. Solyndra was a disaster for the Department of Energy. Whether that was fair or not fair, there’s a real fear that if you make a couple bad loans that go bad in a big way, you will destroy the political support for this program, and the money will be clawed back, a future Republican administration will wreck the office, whatever it might be. So this is not an easy call.

when you tell me they just made the biggest loan in their history to Ford, I’m not saying you shouldn’t lend any money to Ford, but when I think of what is the kind of company that cannot raise money on the capital markets, the one that comes to mind is not Ford

They have made loans to a number of more risky companies than Ford, but in addition to speed, do you think they are taking bets on the kinds of companies that need bets? It’s a little bit hard for me to believe that it would have been impossible for Ford to figure out how to finance factorie

ROBINSON MEYER: Now, I guess what I would say about that is that Ford is — let’s go back to why Solyndra failed, right? Solyndra failed because Chinese solar deluged the market. Now, why did Chinese solar deluge the market? Because there’s such support of Chinese financing from the state for massive solar factories and massive scale.

EZRA KLEIN: — the private market can’t. So that’s the meta question I’m asking here. In your view, because you’re tracking this much closer than I am, are they too much under the shadow of Solyndra? Are they being too cautious? Are they getting money out fast enough?

ROBINSON MEYER: I think that’s right; that basically, if we think the US should stay competitive and stay as close as it can and not even stay competitive, but catch up with Chinese companies, it is going to require large-scale state support of manufacturing.

EZRA KLEIN: OK, that’s fair. I will say, in general, there’s a constant thing you find reporting on government that people in government feel like they are moving very quickly

EZRA KLEIN: — given the procedural work they have to go through. And they often are moving very quickly compared to what has been done in that respect before, compared to what they have to get over. They are working weekends, they are working nights, and they are still not actually moving that quickly compared to what a VC firm can do or an investment bank or someone else who doesn’t have the weight of congressional oversight committees potentially calling you in and government procurement rules and all the rest of it.

ROBINSON MEYER: I think that’s a theme across the government’s implementation of the I.R.A. right now, is that generally the government feels like it’s moving as fast as it can. And if you look at the Department of Treasury, they feel like we are publishing — basically, the way that most of the I.R.A. subsidies work is that they will eventually be administered by the I.R.S., but first the Department of the Treasury has to write the guidebook for all these subsidies, right?

the law says there’s a very general kind of “here’s thousands of dollars for EVs under this circumstance.” Someone still has to go in and write all the fine print. The Department of Treasury is doing that right now for each tax credit, and they have to do that before anyone can claim that tax credit to the I.R.S. Treasury feels like it’s moving extremely quickly. It basically feels like it’s completely at capacity with these, and it’s sequenced these so it feels like it’s getting out the most important tax credits first.

Private industry feels like we need certainty. It’s almost a year since the law passed, and you haven’t gotten us the domestic content bonus. You haven’t gotten us the community solar bonus. You haven’t gotten us all these things yet.

a theme across the government right now is that the I.R.A. passed. Agencies have to write the regulations for all these tax credits. They feel like they’re moving very quickly, and yet companies feel like they’re not moving fast enough.

that’s how we get to this point where we’re 311 days out from the I.R.A. passing, and you’re like, well, has it made a big difference? And I’m like, well, frankly, wind and solar developers broadly don’t feel like they have the full understanding of all the subsidies they need yet to begin making the massive investments

I think it’s fair to say maybe the biggest bet on that is green hydrogen, if you’re looking in the bill.

We think it’s going to be an important tool in industry. It may be an important tool for storing energy in the power grid. It may be an important tool for anything that needs combustion.

ROBINSON MEYER: Yeah, absolutely. So green hydrogen — and let’s just actually talk about hydrogen broadly as this potential tool in the decarbonization tool kit.

It’s a molecule. It is a very light element, and you can burn it, but it’s not a fossil fuel. And a lot of the importance of hydrogen kind of comes back to that attribute of it.

So when we look at sectors of the economy that are going to be quite hard to decarbonize — and that’s because there is something about fossil fuels chemically that is essential to how that sector works either because they provide combustion heat and steelmaking or because fossil fuels are actually a chemical feedstock where the molecules in the fossil fuel are going into the product or because fossil fuels are so energy dense that you can carry a lot of energy while actually not carrying that much mass — any of those places, that’s where we look at hydrogen as going.

green hydrogen is something new, and the size of the bet is huge. So can you talk about first just what is green hydrogen? Because my understanding of it is spotty.

The I.R.A. is extremely generous — like extremely, extremely generous — in its hydrogen subsidies

The first is for what’s called blue hydrogen, which is hydrogen made from natural gas, where we then capture the carbon dioxide that was released from that process and pump it back into the ground. That’s one thing that’s subsidized. It’s basically subsidized as part of this broader set of packages targeted at carbon capture

green hydrogen, which is where we take water, use electrolyzers on it, basically zap it apart, take the hydrogen from the water, and then use that as a fue

The I.R.A. subsidies for green hydrogen specifically, which is the one with water and electricity, are so generous that relatively immediately, it’s going to have a negative cost to make green hydrogen. It will cost less than $0 to make green hydrogen. The government’s going to fully cover the cost of producing it.

That is intentional because what needs to happen now is that green hydrogen moves into places where we’re using natural gas, other places in the industrial economy, and it needs to be price competitive with those things, with natural gas, for instance. And so as it kind of is transported, it’s going to cost money

As you make the investment to replace the technology, it’s going to cost money. And so as the hydrogen moves through the system, it’s going to wind up being price competitive with natural gas, but the subsidies in the bill are so generous that hydrogen will cost less than $0 to make a kilogram of it

There seems to be a sense that hydrogen, green hydrogen, is something we sort of know how to make, but we don’t know how to make it cost competitive yet. We don’t know how to infuse it into all the processes that we need to be infused into. And so a place where the I.R.A. is trying to create a reality that does not yet exist is a reality where green hydrogen is widely used, we have to know how to use it, et cetera.

And they just seem to think we don’t. And so you need all these factories. You need all this innovation. Like, they have to create a whole innovation and supply chain almost from scratch. Is that right?

ROBINSON MEYER: That’s exactly right. There’s a great Department of Energy report that I would actually recommend anyone interested in this read called “The Liftoff Report for Clean Hydrogen.” They made it for a few other technologies. It’s a hundred-page book that’s basically how the D.O.E. believes we’re going to build out a clean hydrogen economy.

And, of course, that is policy in its own right because the D.O.E. is saying, here is the years we’re going to invest to have certain infrastructure come online. Here’s what we think we need. That’s kind of a signal to industry that everyone should plan around those years as well.

It’s a great book. It’s like the best piece of industrial policy I’ve actually seen from the government at all. But one of the points it makes is that you’re going to make green hydrogen. You’re then going to need to move it. You’re going to need to move it in a pipeline or maybe a truck or maybe in storage tanks that you then cart around.

Once it gets to a facility that uses green hydrogen, you’re going to need to store some green hydrogen there in storage tanks on site because you basically need kind of a backup supply in case your main supply fails. All of those things are going to add cost to hydrogen. And not only are they going to add cost, we don’t really know how to do them. We have very few pipelines that are hydrogen ready.

All of that investment needs to happen as a result to make the green hydrogen economy come alive. And why it’s so lavishly subsidized is to kind of fund all that downstream investment that’s eventually going to make the economy come true.

But a lot of what has to happen here, including once the money is given out, is that things we do know how to build get built, and they get built really fast, and they get built at this crazy scale.

So I’ve been reading this paper on what they call “The Greens’ Dilemma” by J.B. Ruhl and James Salzman, who also wrote this paper called “Old Green Laws, New Green Deal,” or something like that. And I think they get at the scale problem here really well.

“The largest solar facility currently online in the US is capable of generating 585 megawatts. To meet even a middle-road renewable energy scenario would require bringing online two new 400-megawatt solar power facilities, each taking up at least 2,000 acres of land every week for the next 30 years.”

And that’s just solar. We’re not talking wind there. We’re not talking any of the other stuff we’ve discussed here, transmission lines. Can we do that? Do we have that capacity?

ROBINSON MEYER: No, we do not. We absolutely do not. I think we’re going to build a ton of wind and solar. We do not right now have the system set up to use that much land to build that much new solar and wind by the time that we need to build it. I think it is partially because of permitting laws, and I think it’s also partially because right now there is no master plan

There’s no overarching strategic entity in the government that’s saying, how do we get from all these subsidies in the I.R.A. to net zero? What is our actual plan to get from where we are right now to where we’re emitting zero carbon as an economy? And without that function, no project is essential. No activity that we do absolutely needs to happen, and so therefore everything just kind of proceeds along at a convenient pace.

given the scale of what’s being attempted here, you might think that something the I.R.A. does is to have some entity in the government, as you’re saying, say, OK, we need this many solar farms. This is where we think we should put them. Let’s find some people to build them, or let’s build them ourselves.

what it actually does is there’s an office somewhere waiting for private companies to send in an application for a tax credit for solar that they say they’re going to build, and then we hope they build it

it’s an almost entirely passive process on the part of the government. Entirely would be going too far because I do think they talk to people, and they’re having conversations

the builder applies, not the government plans. Is that accurate?

ROBINSON MEYER: That’s correct. Yes.

ROBINSON MEYER: I think here’s what I would say, and this gets back to what do we want the I.R.A. to do and what are our expectations for the I.R.A

If the I.R.A. exists to build out a ton of green capacity and shift the political economy of the country toward being less dominated by fossil fuels and more dominated by the clean energy industry, frankly, then it is working

If the I.R.A. is meant to get us all the way to net zero, then it is not capable of that.

in 2022, right, we had no way to see how we were going to reduce emissions. We did not know if we were going to get a climate bill at all. Now, we have this really aggressive climate bill, and we’re like, oh, is this going to get us to net zero?

But getting to net zero was not even a possibility in 2022.

The issue is that the I.R.A. requires, ultimately, private actors to come forward and do these things. And as more and more renewables get onto the grid, almost mechanically, there’s going to be less interest in bringing the final pieces of decarbonized electricity infrastructure onto the grid as well.

EZRA KLEIN: Because the first things that get applied for are the ones that are more obviously profitable

The issue is when you talk to solar developers, they don’t see it like, “Am I going to make a ton of money, yes or no?” They see it like they have a capital stack, and they have certain incentives and certain ways to make money based off certain things they can do. And as more and more solar gets on the grid, building solar at all becomes less profitable

also, just generally, there’s less people willing to buy the solar.

as we get closer to a zero-carbon grid, there is this risk that basically less and less gets built because it will become less and less profitable

EZRA KLEIN: Let’s call that the last 20 percent risk

EZRA KLEIN: — or the last 40 percent. I mean, you can probably attach different numbers to that

ROBINSON MEYER: Permitting is the primary thing that is going to hold back any construction basically, especially out West,

right now permitting fights, the process under the National Environmental Policy Act just at the federal level, can take 4.5 years

let’s say every single project we need to do was applied for today, which is not true — those projects have not yet been applied for — they would be approved under the current permitting schedule in 2027.

ROBINSON MEYER: That’s before they get built.

Basically nobody on the left talked about permitting five years ago. I don’t want to say literally nobody, but you weren’t hearing it, including in the climate discussion.

people have moved to saying we do not have the laws, right, the permitting laws, the procurement laws to do this at the speed we’re promising, and we need to fix that. And then what you’re seeing them propose is kind of tweak oriented,

Permitting reform could mean a lot of different things, and Democrats and Republicans have different ideas about what it could mean. Environmental groups, within themselves, have different ideas about what it could mean.

for many environmental groups, the permitting process is their main tool. It is how they do the good that they see themselves doing in the world. They use the permitting process to slow down fossil fuel projects, to slow down projects that they see as harming local communities or the local environment.

ROBINSON MEYER: So we talk about the National Environmental Policy Act or NEPA. Let’s just start calling it NEPA. We talk about the NEPA process

NEPA requires the government basically study any environmental impact from a project or from a decision or from a big rule that could occur.

Any giant project in the United States goes through this NEPA process. The federal government studies what the environmental impact of the project will be. Then it makes a decision about whether to approve the project. That decision has nothing to do with the study. Now, notionally, the study is supposed to inform the project.

the decision the federal government makes, the actual “can you build this, yes or no,” legally has no connection to the study. But it must conduct the study in order to make that decision.

that permitting reform is so tough for the Democratic coalition specifically is that this process of forcing the government to amend its studies of the environmental impact of various decisions is the main tool that environmental litigation groups like Earthjustice use to slow down fossil fuel projects and use to slow down large-scale chemical or industrial projects that they don’t think should happen.

when we talk about making this program faster, and when we talk about making it more immune to litigation, they see it as we’re going to take away their main tools to fight fossil fuel infrastructure

why there’s this gap between rhetoric and what’s actually being proposed is that the same tool that is slowing down the green build-out is also what’s slowing down the fossil fuel build-out

ROBINSON MEYER: They’re the classic conflict here between the environmental movement classic, let’s call it, which was “think globally, act locally,” which said “we’re going to do everything we can to preserve the local environment,” and what the environmental movement and the climate movement, let’s say, needs to do today, which is think globally, act with an eye to what we need globally as well, which is, in some cases, maybe welcome projects that may slightly reduce local environmental quality or may seem to reduce local environmental quality in the name of a decarbonized world.

Because if we fill the atmosphere with carbon, nobody’s going to get a good environment.

Michael Gerrard, who is professor at Columbia Law School. He’s a founder of the Sabin Center for Climate Change Law there. It’s called “A Time for Triage,” and he has this sort of interesting argument that the environmental movement in general, in his view, is engaged in something he calls trade-off denial.

his view and the view of some people is that, look, the climate crisis is so bad that we just have to make those choices. We have to do things we would not have wanted to do to preserve something like the climate in which not just human civilization, but this sort of animal ecosystem, has emerged. But that’s hard, and who gets to decide which trade-offs to make?

what you’re not really seeing — not really, I would say, from the administration, even though they have some principles now; not really from California, though Gavin Newsom has a set of early things — is “this is what we think we need to make the I.R.A. happen on time, and this is how we’re going to decide what is a kind of project that gets this speedway through,” w

there’s a failure on the part of, let’s say, the environmental coalition writ large to have the courage to have this conversation and to sit down at a table and be like, “OK, we know that certain projects aren’t happening fast enough. We know that we need to build out faster. What could we actually do to the laws to be able to construct things faster and to meet our net-zero targets and to let the I.R.A. kind achieve what it could achieve?”

part of the issue is that we’re in this environment where Democrats control the Senate, Republicans control the House, and it feels very unlikely that you could just get “we are going to accelerate projects, but only those that are good for climate change,” into the law given that Republicans control the House.

part of the progressive fear here is that the right solutions must recognize climate change. Progressives are very skeptical that there are reforms that are neutral on the existence of climate change and whether we need to build faster to meet those demands that can pass through a Republican-controlled House.

one of the implications of that piece was it was maybe a huge mistake for progressives not to have figured out what they wanted here and could accept here, back when the negotiating partner was Joe Manchin.

Manchin’s bill is basically a set of moderate NEPA reforms and transmission reforms. Democrats, progressives refuse to move on it. Now, I do want to be fair here because I think Democrats absolutely should have seized on that opportunity, because it was the only moment when — we could tell already that Democrats — I mean, Democrats actually, by that moment, had lost the House.