For 200 years, Americans used various forms of antimonopoly lawat the local, state, and federal levelsto disperse power, foster productive competition, and protect open markets. Americans used these laws, in essence, to extend the system of checks and balances into the political economy.
Then, beginning in the late 1970s, an odd coalition of the consumerist (and Democratic Socialist) left and laissez-faire rightled by such Chicago School stalwarts as Robert Borkimposed a new consumer welfare test for anti-monopoly enforcement.
The revolutionary result, a generation later, is that the U.S. economy as a whole is, if anything, more concentrated today than during the age of John D. Rockefeller and J. P. Morgan. Back then, Americas citizens faced private corporate control over heavy industry, transport, and banking. Today, these sectors are often even more consolidated than a century ago.
And we also face private dominion over retail (the sale of eyeglasses, for instance, is dominated by the Italian firm Luxottica, which controls such chains as LensCrafters and Pearle Vision); farming (more than 90 percent of all soybeans grown in America contain genes patented by one company, Monsanto); and information (one company, Intel, still makes and sells some 90 percent of all semiconductors used in personal computers). And to complicate matters, unlike a century ago, many of todays powers are based overseas.
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The simple fact is that almost every large merger is followed by significant cuts in staff. The Pfizer takeover of Wyeth in 2009, for instance, resulted in the destruction of 19,000 jobs. Mergers also reduce the impulse for big business to create new jobs. Lack of competition means bosses can increase revenue simply by charging more for less. Giant firms today already boast of record profits, even without running the risk of investing in new lines of business.
Mergers can also reduce the ability of smaller businesses to create new jobs. Not only does the fencing in of markets make it harder for up-and-coming entrepreneurs to launch new firms, it can prevent successful entrepreneurs from growing proven firms to scale.
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By the early 1970s, the American economy had settled into a balance. Roughly half the economy was controlled by 1,000 industrial giants. The other half was divided among some twelve million small enterprises, competing in open market systems.
Which means that the great middle class of twentieth-century America stood atop two foundations. One was freedom to organize the industrial workplace, to erect a countervailing power within a necessarily hierarchical governance structure. The other was freedom from organization, the freedom to be ones own boss, the freedom to build up a business thatthanks to anti-monopoly lawwas largely safe from predation.
Every American could choose the path that fit best. A citizen who wanted to be her own boss, or run his own family business, could count on robust anti-monopoly law to protect farm, factory, or store from predators wielding massed capital. Citizens who wanted the security of a weekly wage could hire themselves out to an industrial giant or government monopoly, confident that they were protected against economic exploitation and arbitrary rule by open market systems and robust labor law.
And until the rise of the socialistic New Left and the laissez-faire Chicago School crew, this great alliance of workers and proprietors, for all intents, controlled both major parties.
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Defending open markets may well prove one of the most effective ways to educate unorganized groups of workers of the need to support stronger unions. After all, even if Congress and the administration moved tomorrow to take on Americas many monopolies, few of these powers will go easily into the good night. Which means that in many cases, employees would be wise to work together to protect themselves now.
To understand the potential stakes, consider the Justice Departments revelation last September that Google, Apple, Intel, and other tech giants had secretly colluded not to hire each others workers. The agreement, the DOJ said, had eliminated a significant form of competition to attract highly skilled employees.
The fact that some of the worlds biggest and richest firms openly conspired to drive down wages and to restrict the most basic freedoms of individual employees would be, one might think, of some use to organized labor. Here, after all, is a perfect story to illuminate the fact that even the smartest and best educated of AmericansPhD scientists and PhD engineerssometimes need protection when their markets are enclosed, just like autoworkers and nurses and teachers.
Indeed, given that such concentration has begun to destroy the open market systems that have long helped to protect all sorts of white-collar professionalsranging from book editors to advertising executives to doctorsa generalized attack on monopolization might prove to be a highly effective way to go on the offensive among groups of salaried employees who have, until now, viewed themselves as, somehow, immune to such rude treatment.
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