The Curse of Bigness: Antitrust in the New Gilded Age, by Tim Wu (Columbia Global Reports, 154 pp., $14.99)
What’s in a name? The burgeoning movement of antitrust-policy experts building the case against today’s biggest corporations will tell you that they prefer the label New Brandeisian, thank you very much. This group’s members are working to revive the spirit of economic democracy championed by Louis Brandeis during the Gilded Age. But to their critics, this cohort of experts with a new approach to antitrust regulation are rehabilitating failed ideas abandoned decades ago, earning the “hipster antitrust” moniker applied by Senator Orrin Hatch and others.
The lines of battle for a forthcoming clash over antitrust enforcement are being drawn in a newly prominent way, especially in light of the current panic about big tech’s influence. Look no farther than the procession of Silicon Valley execs paraded through Capitol Hill over the past few months. These hearings yield more than just amusing questions by technologically illiterate lawmakers. (During the hearing of Google CEO Sundar Pichai, Representative Steve King appeared to mistake the iPhone for a Google product). The occasional congressman also voices concern about economic competition, as was the case when Facebook’s Mark Zuckerberg testified in the spring. Today, calls for antitrust action against the incumbent technology giants come from both the Left and the Right, inspired by everything from allegations of censoring online speech to data-privacy failures.
Tim Wu’s The Curse of Bigness plants the New Brandeisian flag firmly on the side of regulating the tech giants with more gusto. Call it hipster-antitrust’s manifesto. In this slim treatise, Wu, a Columbia law professor, calls for what he considers to be the original intent with which Congress passed antitrust legislation to constrain the reach of the Gilded Age’s leviathans. The jumping-off point is that we’re in the midst of a new Gilded Age characterized by rampant income inequality and an un-ignorable amount of market concentration, not just in tech but across other industries, too.
Part historical narrative, part policy memo, the book presents the New Brandeisian understanding of antitrust history and a brief overview of what’s to be done. Wu deftly traverses the realms of policy talk, legal writing, and economic history to offer his views on America’s competition predicament. He writes this tome for the outsider: If Wu and the other hipsters bring their ideas to implementation, it will be in large part because of their ability to communicate complex, jargon-laden ideas plainly to broad audiences.
Wu posits that America departed from its original antitrust tradition decades ago, resulting today in crisis-level apathy to the pooling of market power among a few powerful firms in many industries. Sections about the origins of this tradition grab the reader’s attention with vivid historical detail. Wu describes how Brandeis’s heartland upbringing influenced his Supreme Court jurisprudence and ideas about monopoly: “Louisville was, at least to Brandeis, an ‘idyllic’ place, one free from the ‘curse of bigness,’ representing an ‘economic democracy’ — that is, a place of industrial freedom and openness to competition, yet with an economy that yielded adequate spoils for all.” It’s this spirit that Wu harkens back to (not least by alluding to it in the volume’s title).
Notably, he uses antitrust scholarship to argue that the restoration of economic democracy concerns nothing less than the survival of American democracy. Wu dances delicately around this “big if true” point, asserting in his introduction a link between monopoly power and fascism: Failing to fix antitrust policy could very well contribute to the rise of authoritarianism. In a New York Times op-ed, Wu expanded this argument, attributing the rise of right-wing authoritarian leaders abroad to this excessive corporate power. Maybe it’s a fair argument when it comes to Viktor Orbán’s Hungary, where government-affiliated firms are buying out previously independent media outlets. But the United States?
With near-palpable cynicism, Wu rides the wave of anxiety about democracy’s global retreat. After all, why would anyone care about a debate as esoteric as this one if the stakes weren’t so high? For Wu, saving democracy requires the strengthening of antitrust policy via New Brandeisian recommendations. He offers a handful of ideas, the most important of which is a disavowal of Robert Bork — yes, that Bork. The failed Supreme Court nominee may not have made it to the highest court in the land, but his understanding of antitrust legislation reigns today. Under Bork’s standard, now widely accepted, courts will block mergers that antitrust authorities can prove will lead to higher prices for consumers.
The author adds his voice to the chorus of critics who say Bork merely hitched his “consumer welfare standard” to the wagon of judicial restraint starting in the late 1960s and, relying on a mangled reading of the legislative intent of the Sherman Act (1890), concocted a crackpot legal invention. But the reason that Wu and the hipsters say people should particularly care about this debate is that Bork’s standard has permitted massive consolidation in a variety of industries, from beer to airlines to telecommunications, hurting competition and stifling innovation.
To be clear: Antitrust regulation has long been considered a matter of political freedom. Anti-monopoly laws bridge the gap between government overreach and excessive corporate power. In 2017, Hatch, a fan of Bork’s consumer-welfare approach, even hailed them as “the Magna Carta of the free-enterprise system.” The growing antitrust debate splits not on whether antitrust measures are necessary — they are unequivocally so — but rather on how they should be implemented.
The question of implementing Wu’s antitrust proposals is not the same as fighting democracy’s demise. One doesn’t need a strong opinion about the consumer-welfare standard to see that its eradication has no bearing on preventing the rise of fascism. Cornell Law’s Daniel Crane (whose work Wu cites) clearly describes industrial monopoly’s contribution to Nazism’s rise in inter-war Germany: Before World War II, Germany had no antitrust law to speak of, and a consumer-welfare law would have stopped the consolidation of the monopoly that enabled Hitler’s ascent to power. Even those who think the focus on consumer prices ignores the original purpose of antitrust cannot conceivably argue for abandoning consumer welfare as a bulwark against authoritarianism.
In fairness, it should be noted that Americans have flirted with the idea of merging immense political and economic power before. Just look at Theodore Roosevelt’s 1912 campaign proposal to encourage the development of and nationalize industrial monopolies: Wu cites it as a cautionary tale, noting that it would have resulted in “a union of political and economic power unknown even to the greatest of ancient emperors” if TR had triumphed. But again, would the shift from our current antitrust standard to what Wu suggests really provide significantly more protection than the status quo?
Today’s largest tech-related threat to political liberty comes not from a credible possibility of the nationalization of America’s major industries but more likely from calls for government regulation of online speech. Like conservatives who allege censorship by Silicon Valley, liberals trying to stop the spread of fake news can at times seem to prefer interference in the marketplace of ideas. Some Republicans have even called for a modern “fairness doctrine” that would allow government to play referee in public discussions and force platforms to promote unrepresented views — a revival of a bad idea that has led to and would, if implemented, lead to stilted public discourse. Some speak of treating Facebook and the other social-media players as publishers instead of platforms, making them liable for what users posts online. The goal would be to crack down on harmful posts, but the result could be the wholesale suppression of speech by companies trying to limit their liability.
Wu doesn’t address these ideas specifically. Instead, he proposes to investigate and break up the tech companies, undoing mergers that in his eyes never should have been approved. Unlike Pollyannaish analysts, he believes that without strong antitrust action, the firms atop the industry will benefit from unfair advantages that prevent competition and innovation. Presumably, antitrust action would also force them to adopt more-responsible postures toward content regulation, user data privacy, and more. Between the concerns he identifies and the unacceptable consequences of monopoly, neo-Progressive solutions are portrayed as a reasonable “middle path.”
And if you accept Wu’s premises, his solutions are the most logical compromise — you agree to greater politicization of antitrust enforcement in exchange for respite from the big, bad tech monsters. But dig a bit deeper, and beneath the well-argued thesis you find opportunistic fearmongering.