Presents a greater danger to the public good than concentrations of wealth, but where there is concentration of wealth, concentration of power follows. Libertarians get upset with the idea of power concentrated in governments--and that can be a very serious problem--but the real problem in America has always been the way power concentrates in the private sector--in trusts and monopolies.
Tom Frank explores this theme in a spirited interview with Barry Lynn about the history of anti-trust in America. This is one of the best things on the way the political economy works in the U.S. I've read on this in a long time. It does a great job of pulling together a lot of fragments of things we all kind of know, but fuzzily.
There are so many good passages in it I don't know which to excerpt here, so I'll just pick this one from near the end. [Frank is in the bold; Lynn normal text]:
When I wrote about the Tea Party movement, I said, if Democrats are looking around for something from their own tradition that might defuse the Tea Party—actually there’s no evidence that they were looking around for a way to defuse the Tea Party movement. Had they been looking around for a way to defuse the Tea Party movement, this issue seemed like an obvious thing to me. Start talking about antitrust. Because these Tea Party guys are small business people, like you said; they’re very worried about the power of bigness—why not throw it out there? If you’re Barack Obama, why not do it? You’d stop this movement in its tracks. You might even win some of them over.
When it comes to the political economy, both parties are run by the same people.
So we’ve finally come to the biggest duopoly of them all. This is not like Procter & Gamble vs. Unilever or something.
They tell us we’re members of the blue team, or members of the red team, and that these colors really matter. But when it comes to political economy, when it comes to issues of actual distribution of power, both the blue party and the red party do pretty much exactly the same. One of the more disappointing aspects of President Obama is that, as a candidate, he was great on antitrust. One of the reasons Barack Obama is president is because he went to Iowa as a candidate and said he was going to fix antitrust, and take on the giant agro-industrial companies. That’s one of the main reasons he beat Hillary in the Iowa caucus in early ’08.
If you were in Iowa, it was like, “Gee, this guy is for real.”
Well, what happened?
Well, he won Iowa!
I know, but did he fix it?
Well, after he won Iowa and leveraged that into winning the presidency, he actually—I will give President Obama credit on this, he tried. For one year, he tried. In 2010, Christine Varney, who was his antitrust enforcer, and Eric Holder, who is his Attorney General, and Tom Vilsack, his Secretary of Agriculture, they held five hearings around the country, in which they gathered evidence of abuse by giant companies, and made promises to farmers that they would fix the agriculture markets in the United States.
That’s fantastic. And what happened?
Well… The powers made clear that this was not acceptable.
Come on, what do you mean by that? You mean, he didn’t follow through, he didn’t do it.
He didn’t do it. After the Democrats got clobbered in the 2010 midterms, the White House entirely abandoned the effort.
Okay but, this might have been the thing that could have saved their ass, if they had played it right, is what I’m thinking, if they had really made a big deal out of it.
Well yes, but I’m really not sure how comfortable they were with the idea of antimonopoly in the first place. In almost every other sector of the political economy, they never did a thing ever to stop concentration. If anything, as in banking, they have simply sped it along. I mean, when they walked into office, they had the perfect bad merger to reject, the merger of Ticketmaster and Live Nation. Here we had two companies that people really disliked, and yet the Obama team gave the deal an easy pass.
This is the most maddening thing about the two-party system, is now we’re in this situation where, there’s this weird dynamic for the last couple decades now where the Republicans are driving, driving, driving farther to the right, and Democrats, liberals, who are the bearers of the tradition you’re talking about, are afraid to take a stand on anything for fear that if they make any wrong step these right-wingers will get in. And you’ve basically got a two party system that everyone can see is broken. How do we ditch this monopoly?
Well, part of the reason that liberals have such a hard time is that we still share a party with real corporatists, people whose basic thinking about economics traces back to Teddy Roosevelt Progressivism rather than Brandeisian or Jeffersonian democracy. We’ve got a lot of old-fashioned “small d” democrats, “small r” republicans in our party, people who believe in community based democracy and industrial liberty. That’s probably the great bulk of us, probably 90% of the members of the Democratic party believe in a Jeffersonian, Wilsonian, Brandeisian political economics. And that’s probably true for the majority of Republicans too. But then in our party you have this overlay of the old-fashioned Progressives, of people who still really believe that the main thing we should aim at is efficiency, and these people wield real power in the party. And then in the Republican Party you’ve got a leadership controlled by a weird amalgam of straight up feudalists and insane libertarians, who live entirely in a realm of theory and myth, and who also say that the main thing we should aim at is efficiency.
"When it comes to the political economy, both parties are run by the same people." And as I've been arguing here for years, the only thing that separates Democrats from Republicans are cultural or tribal identity issues. Liberals and progressive have essentially let the Democrats give away the country to the 1% because the people they elect to serve the interests of the 1% are cosmopolitians who are politically correct on abortion, gay rights, and guns.
I found interesting and learned from the discussion in the interview in the difference in approaches taken by two wings of the Progressive movement represented by Teddy Roosevelt and Woodrow Wilson and which came to a head in the election of 1912. Roosevelt wanted to allow concentrations of power in a monopolies or duopolies so long as they were closely regulated by the government. Wilson, in the Jeffersonian/Jacksonian tradition, wanted to break up all concentrations of power. The 'overlay of old-fashioned Progressives' that Lynn refers to in the excerpt are heirs of the Teddy Roosevelt approach--good government technocrats, for the most part, who were interested in efficiencies of scale.
The problem, of course, is that in both approaches the government has to be powerful enough and to have the will to keep the private sector in check. But it has become clear that the Roosevelt approach creates the greater danger, because it requires the will and the stamina to hold the wolf by the ears. Once the will to regulate has been weakened, the wolf can and will turn the tables and as we have seen, it has been feasting on the carcase of our dysfunctional democracy for the last 30 years. Better to find some way to make sure the wolves never get to big and that they spend most of their time fighting with one another.
So since Reagan came in an let the wolves run wild, there's been no force inside or outside government with the will or the strength to try to get them back on some kind of leash or into cages where they belong. That's our predicament right now, and it's pretty difficult to see how to get out of it. The only solution, of course, is a revival of the Jeffersonian/Wilsonian approach and the will to break up the concentrations of power, starting with the banks, that have developed since 1980. Does anybody really believe that this is high on the list of priorities for Hillary Clinton?