Politics & Policy

Amid a Revival of Anti-Monopoly Sentiment, a New Book Traces Its History

President Theodore Roosevelt, c. 1907 (Library of Congress)
Matt Stoller’s Goliath: The 100-Year War Between Monopoly Power and Populism charts the shifts in American attitudes toward corporate consolidation.

American history began with conflict over monopolies. English colonial charters were monopolies on settlement in wide swathes of territory here. The Boston Tea Party was caused, in part, by resentment at the British East India Company’s monopoly on tea. After independence, monopolies abated for a time, as the country was large and diverse enough to make it difficult for one company to dominate an industry. With the growth of rail and telegraph in the second half of the 19th century, though, distances were less of an issue, and monopoly power became a concern once more. So Republicans and Democrats joined together to pass the Sherman Act of 1890, which allowed them to tell voters that they’d stood up to powerful corporations.

Matt Stoller of the Open Markets Institute picks up the story from there in his new Goliath: The 100-Year War Between Monopoly Power and Populism, which tells the tale of the American anti-monopoly movement in 600 well-researched pages that show a deep dedication to the topic.

As with many issues that have emerged (or re-emerged) over the past few years, it is not easy to decide whether anti-monopoly sentiment “belongs” to the Left or the Right. Stoller’s narrative begins as a typically left-leaning history of the early 20th century, but as the tale unfolds one begins to see elements that fit more neatly with some strains of modern conservative thought. Modern conservatives are known for wanting a small government, centered on local concerns and responsive to the people, yet are also often quite comfortable with the consolidation of big nationwide businesses that dominate their fields. Modern progressives, meanwhile, are favorably disposed toward a centralized government that ignores local variation, but they hate a business that does the same.

The contrast between our politics and those of a century earlier is dramatic. As Stoller tells us, both parties in 1912 claimed the mantle of progressivism, as did, obviously, Theodore Roosevelt’s Progressive party. The three-way election that year featured Roosevelt and Woodrow Wilson, both of whom claimed to be progressive, and William Howard Taft, who showed some considerable progressive leanings himself.

The differences between them were nonetheless considerable, especially as concerned the issue of anti-trust enforcement. After busting one major trust, Roosevelt tried to make peace with big business. He saw the government’s role as that of organizer: As long as the products being produced were safe for consumers, he was indifferent to the size of the company producing them. If anything, he preferred businesses to be large; it is easier, after all, to regulate and organize a few companies than it is to corral hundreds of independent operators. Roosevelt’s progressivism was, in short, one of big businesses and a government big enough to keep them in line.

Wilson, on the other hand, ran as a small-government progressive. That sounds like an oxymoron to modern ears, but Wilson’s theories, influenced by future Supreme Court justice Louis Brandeis, were in many ways the opposite of Roosevelt’s. He wanted to keep the government small, which meant that businesses had to be small, as well, lest they overpower the state. His New Freedom program would have used the anti-trust laws more aggressively and maintained a smaller government to act more as a policeman to business than an organizer.

Or so he said. Once in office, things changed. Stoller suggests that the First World War forced Wilson to transform into a big-government progressive, but given that the country was at peace for the first five years of his administration, this lets the president off the hook too easily. Like many a small-government candidate, Wilson felt differently about the machine of state power once his hands grasped the controls.

After a free-market interlude for a dozen years in the 1920s, the same conflict presented itself when Franklin Roosevelt took office. The experts hired to transform the government’s role in the economy under Roosevelt’s New Deal were divided between the two schools of progressivism. FDR ultimately chose the path of his Republican cousin. The National Industrial Recovery Act of 1933 (NIRA) actually suspended the anti-trust laws and told businesses to cooperate in schemes that at any other time would have been called collusive and illegal. Some Brandeisian thinkers remained in the administration, but even after the Supreme Court struck down NIRA in an opinion joined by Brandeis, the tone remained one of consolidation and regulation, not true anti-trust enforcement.

Many Democratic — and some Republican — administrations came to office with Brandeisian ideas about the power of monopolies. In the end, none of them followed through. Small-government ideals appeal to the party out of power, but once that party regains the White House, they’re frequently discarded. And once a president decides to use government power in the commercial sphere, it is far easier to use it against a handful of huge companies than against scores of little ones. Big Government and Big Business pretend to oppose each other, but in reality they act in concert to preserve their mutual interests: stability and profit.

Despite the triumph of the TR-style progressivism, anti-trust enforcement was stronger in FDR’s presidency than at any time since. In recounting the changes in policy over the years that followed, Stoller focuses on Representative Wright Patman of Texas. Patman was a New Dealer, one of many Southern populists who mixed ideas now seen as liberal (strict regulation and investigation of banks) with others that are now so reactionary as to be almost unthinkable (signing the 1956 Southern Manifesto, which opposed the Supreme Court’s desegregation of schools in Brown v. Board of Education).

If the executive branch never committed to Brandeisian progressivism, Patman did. As a member of the House Committee on Financial Services — he would eventually serve as its chairman from 1963 to 1975 — Patman kept up the old-fashioned progressive focus on trust-busting. In the beginning, there was a bipartisan consensus that one firm should not dominate an industry, but new business strategies began to emerge that challenged the old New Dealers. At the same time that corporations began to expand into unprecedented cross-industry conglomerates, big-government progressives such as John Kenneth Galbraith began to advocate an economy led by experts who knew better than the market.

That might have fit the ideas of anti-trust advocates, and it certainly matched the command-style economy the United States had acquired in World War II. But rather than use their expertise to demand dispersal of corporate control, they started to follow the old playbook, allowing greater corporate consolidation in exchange for greater government control. Added to the old justifications for this trade-off was a new economic dogma: efficiency.

The efficiency mindset caught on among the New Left in the 1970s, as well, leading to a pro-corporate right and left in American politics. This is where Stoller’s narrative departs from traditional left-wing history. The rising Baby Boomer generation, to the extent that it leaned left, did so from a counter-cultural, individualist perspective that was very different from the union-hall socialism of previous generations. Ralph Nader’s attacks on big corporations in the ’70s originated from the view that businesses were harming consumers, not workers. At the same time, anti-trust action was reconceived as solely a means of protecting consumers.

The result, says Stoller, was a generation that did not care about the business regulations of the New Deal — and rightly so, at least in part. Stoller laments the demise of the Penn Central Railroad — the chimerical offspring of two once-great systems, the Pennsylvania and the New York Central Railroads — but even he admits that part of its problems came from the heavy-handed New Deal-era regulation of the Interstate Commerce Commission. There were also bad business decisions by the railroad amid the inexorable movement of travelers to airplanes and private cars, so there is blame to go around. But the New Left was not completely out of line in arguing that New Deal rules were not working.

The “Watergate Babies” who flooded into the House of Representatives in the 1974 midterm elections were a part of this New Left movement. They, like every rising generation, had little respect for the old ways. When old New Dealers wanted to update the New Deal laws to deal with the modern innovations then subverting them, the new class declined. Its members had other concerns, such as civil rights and the withdrawal from Vietnam. They failed to see the problem in corporate consolidation or banking concentration, so they ignored it. Old committee chairmen such as Patman were unceremoniously booted from leadership.

From there, Stoller traces the decline of anti-trust enforcement through the Carter and Reagan administrations up to today. Prominent figures in both parties come in for criticism. Robert Bork, especially, is discussed as one of the fathers of the hands-off, consumer-centered approach to corporate mergers, but some lefty sacred cows are also condemned. Ruth Bader Ginsburg and Stephen Breyer are both said to have been pro-monopoly judges, appointed by Bill Clinton to the Supreme Court because they were “adherents of the same basic monopoly-friendly philosophy” as Bork.

This, perhaps, goes too far. But Stoller is not wrong to say that anti-monopoly enforcement has fallen farther and farther down the list of left-wing priorities as time goes on. Only recently has it attracted any attention on the right at all. Concentration of corporate power rarely bothered conservatives because the corporate titans rarely bothered them. But when big banks threaten to ban customers from buying guns with their credit cards, and when big tech companies shift search results away from conservative sites or ban right-wingers from their networks entirely, they break that non-aggression pact.

Stoller ends Goliath, unsurprisingly, by calling for a return to the anti-monopolism of Brandeis and Patman. It’s an argument with increasing appeal for the many Americans on both sides of the political spectrum frustrated with the excesses of present-day capitalism. But selling it to people who are equally suspicious of government will be difficult. It is possible — even likely — that a strengthened anti-trust regime would once again fall under the control of big-government progressives and only serve to entrench the powers that be. Barely mentioned, too, is the problem of consolidation abroad. If our trading partners allow or even encourage consolidation in their industries, the efficiencies gained there will render our own companies less competitive. It is fine for Americans to decide that efficiency should not be the only goal in business, but if other countries refuse to go along, our companies are bound to lose market share abroad and face an even greater flood of cheap imports at home.

All that said, if his solution is imperfect, Stoller’s focus remains relevant. Though anti-monopolism has been dormant for decades, the corporate consolidation of this century has given Americans on both sides of the political spectrum reason to wonder if it should be awakened. And Stoller’s treatise is a good place to start in thinking through that question.


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