David Dayen at The Nation writes—This Budding Movement Wants to Smash Monopolies:
In a conference room overlooking the Chicago River last week, 35 years of thinking about the economy came under direct challenge. It won’t get as much attention as a Sean Spicer press conference or a Bernie Sanders town hall, but decades from now it may prove much more important to how our economy is organized.
The University of Chicago Stigler Center’s three-day conference asked, “Does America Have a Concentration Problem?” A sufficient response to this could be “go outside.” Virtually every major sector in our economy has been whittled down to a few major players. Two companies produce nearly all of America’s toothpaste. One, Luxottica, produces nearly all the sunglasses. There are four cable and Internet providers, who have divvied up the country and rarely compete. There are four major airlines. There are four major commercial banks. There are four major Internet platforms — Amazon, Facebook, Apple, and Google — controlling your information flow, your data, and your virtual life.
These markets are shrinking further, thanks to a continuing wave of mergers. Bayer is buying Monsanto to control a significant section of the agricultural seed market. AT&T and Time Warner’s combination would tie a content distributor to a content provider. The Walgreens-Rite Aid deal would narrow major chain pharmacies down to two (three if you’re generous and include Walmart). Platform monopolies like Google are buying a firm a week; it’s become a large part of their research and development strategy to acquire ideas and market share simultaneously.
This market consolidation has wide-reaching effects beyond the higher prices monopolies can charge due to lack of competition. Quality suffers when consumers have nowhere else to turn. Supply chains become fragile – an outage from Amazon Web Services, the leader in cloud computing, took out half the Internet in February. Economic power begets political power and democratic institutions suffer. Personal liberty to use talents and skills gets stymied when there’s only one game in town. Barriers to entry have led to a decline in business startups and a retrenching of economic dynamism. Inequality grows when a few at the top gather all the rewards in a market.
Our growing monopolization didn’t happen by accident. Starting in the 1970s, a group of academics led by failed Supreme Court nominee Robert Bork changed the view of antitrust law, which was originally intended to break up concentrated power. Without altering a word in the Sherman Antitrust Act, Bork and his colleagues – known as the “Chicago school” because of their devotion to University of Chicago neoclassical economic theories – rewrote history, determining that antitrust merely concerned “consumer welfare,” an economic study of prices, rather than effects on competition. Starting in the Reagan administration, the Chicago school’s capture of antitrust theory has brought us to a period of market concentration unrivaled since the Gilded Age.
A new group of scholars and activists has rebelled against Chicago school dictates. You can call them the “New Brandeis movement.” Louis Brandeis, before reaching the Supreme Court, advised President Woodrow Wilson in the election of 1912, condemning “the curse of bigness” and favoring breakups of those trusts that the Sherman Act had yet to dismantle. Under Wilson, Congress closed Sherman Act loopholes with the Clayton Antitrust Act, and created the Federal Trade Commission to combat monopoly power. As Brandeis wrote, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” [...]
TOP COMMENTS • HIGH IMPACT STORIES
QUOTATION
"To sit home, read one's favorite paper, and scoff at the misdeeds of the men who do things is easy, but it is markedly ineffective. It is what evil men count upon the good men's doing."
~Theodore Roosevelt, “The Higher Life of American Cities,” December 1895
TWEET OF THE DAY
BLAST FROM THE PAST
At Daily Kos on this date in 2005—Cornyn: Violence against judges understandable:
Remarks by Sen. John Cornyn (R-TX) on the Senate floor today:
I don't know if there is a cause-and-effect connection but we have seen some recent episodes of courthouse violence in this country. Certainly nothing new, but we seem to have run through a spate of courthouse violence recently that's been on the news and I wonder whether there may be some connection between the perception in some quarters on some occasions where judges are making political decisions yet are unaccountable to the public, that it builds up and builds up and builds up to the point where some people engage in—engage in violence.
Violence against judges is nothing short of domestic terrorism. And Cornyn (along with DeLay and their ilk) are nothing more than apologists for such violence.