In May, as the pandemic was killing around 2,000 Americans a day, The Wall Street Journal reported that the Department of Justice, in partnership with a group of state attorneys general, was preparing to file an antitrust suit against Google. New York Attorney General Leticia James is investigating Facebook, California Attorney General Xavier Becerra is investigating Amazon, and the House Judiciary Committee is engaged in the most serious corporate investigation in decades, a deep dive into the power of all four digital behemoths. This is the same committee that oversaw a starkly divided impeachment effort, and yet liberal Democrats Representatives David Cicilline and Pramila Jayapal have teamed up with Freedom Caucus members, Congressmen Ken Buck and Matt Gaetz, to demand Amazon’s Jeff Bezos testify.
For all the nightmarish can-this-really-be-happening state of alternate reality that the Trump era has represented, the bipartisan effort to confront corporate power—targeted at four corporations that have enjoyed enormous popularity both among many Washington elites and families all across the country—would have been similarly impossible to imagine as recently as 18 months ago.
Over this time, progressives have begun to understand that the darlings of innovation, the social connectors, the adorable organizers of the world’s information, the two-day delivery Everything Store are, under their slick PR, relentless and dangerous monopolists. Google and Facebook have, among many other affronts, not just to Silicon Valley’s dynamism but to democracy itself, rolled up the market for digital advertising, wiping out the business model for trustworthy sources of news and replacing it with toxic clickbait. Amazon’s Marketplace leverages a classic middleman approach, extorting and abusing businesses that sell on its platform, competing against them using massive and unfair advantages, and then using the steady stream of spoils to finance monopolization in new markets.
For 40 years, mainstream progressives have largely ignored or augmented corporate power as part of our governing agenda. But confronting and addressing corporate power, especially in the form of monopolistic control of markets, is central to whether and how quickly our society can become more just, equitable, and secure. Now, with the pandemic guaranteeing the need for an overt and aggressive government role in structuring the economy for a long time to come, and with America at a clear political inflection point, progressives must look beyond the tech platforms to acknowledge the systemic nature of monopolization in the economy and have the courage to change course. While reinvigorating antitrust is key, it is only one part of what must be a much more holistic reorientation of government’s relationship to corporate power. It’s time to get specific about exactly what that means.
When I first began in 2015 what has ended up being a fascinating, infuriating, and continuing journey to learn about corporate power, “monopoly” was not a word I’d encountered during six years as an economic policy aide in some of the most influential organizations within government and adjacent to it. Yet in 2016, shortly before Trump was elected, an Atlantic article by a congressional staffer, Matt Stoller, went viral; it outlined how a generational changeover in the Democratic Party, combined with a new consumer-focused movement and long-simmering ideological and corporate-backed effort to overturn the legacy of FDR’s constraints on corporate and financial power, had erased antitrust from the progressive consciousness. After Donald Trump’s election, it went viral again.
A few months later, a Yale Law Review article by a young, unknown law student by the name of Lina Khan went as viral as a 96-page law review article has ever gone, netting downloads into the six figures. Through the story of Amazon’s rise to dominance, it meticulously exposed the ahistorical and astonishingly stupid “consumer welfare” approach of current antitrust enforcement and the critical role, properly executed, that antitrust played in underpinning broad-based economic growth and safeguarding democracy.
That summer, Lina and I would have offers to work with the Open Markets program at New America pulled hours after the program’s head, Barry Lynn, publicly called out the market power of Google, one of New America’s largest funders. The story broke on A1 of The New York Times that our team had been asked to leave after head of Alphabet Eric Schmidt complained to New America’s president. Seven months pregnant at the time, I first assumed my growing fascination with antitrust would be relegated back to hobby horse status, but fortunately, that fall, I was able to draw a paycheck alongside the rest of our newly independent team.
After that, and then again after the Cambridge Analytica scandal exposed Facebook’s power to subvert American democracy, antitrust seemed to gain a small but steady foothold in the mainstream policy conversation, in particular for how it could explain and help address the root causes of the ever-more apparent social problems deriving from Big Tech. It’s ironic that we probably have Google and Facebook’s own sloppiness to thank in part for antitrust’s re-emergence (accepting money for American political ads in rubles—really?), but arrogance and recklessness are two key features of monopolists, so it shouldn’t be terribly surprising.
If their political troubles are causing them to lose any sleep, Amazon, Facebook, and Google’s top executives can take comfort in the fact that COVID-19 has boosted their fortunes. Bezos’s stake in Amazon is worth nearly $160 billion, compared to $130 billion shortly before the pandemic broke out, while Mark Zuckerberg, Larry Page, and Sergey Brin enjoy equity in their respective empires that currently sit in the more modest $60 to $90 billion range. With COVID keeping people from venturing out, Amazon’s Marketplace has become an even more essential commercial intermediary, while Facebook has seen a surge in users, and Google’s contract tracing app is positioning the company as part of the public health solution (even as it juices its share prices with record stock buybacks).
Meanwhile, even before COVID, four in ten Americans couldn’t afford an unexpected $400 expense. Now, with the pandemic in its fourth month, more than 23 million people lost their jobs and millions of small businesses face imminent failure, with Black and brown workers and business owners disproportionately bearing the brunt of the catastrophe. Meanwhile, the Fed is providing unprecedented support to large corporations and private equity—paving the way for what Jim Cramer of CNBC’s Mad Money rightly called “one of the greatest transfers of wealth in history.”
That said, wealth inequality has been an urgent topic of worldwide debate since before the pandemic, gaining traction after the financial crisis hammered lower and middle-income families, especially Black and brown households, but left those at the top of the financial food chain increasingly better off. Whether through the lens of Bernie Sanders’s and Elizabeth Warren’s anti-billionaire stump speeches or Thomas Piketty’s Capital in the 21st Century, CBS This Morning’s pies-in-a-mall quiz or viral, rice-apportioning Gen Z Tik Toks, the debate among progressives has moved far beyond whether wealth inequality is a problem to how exactly we should address it. The dominant progressive proposals center around taxing the super-wealthy and redistributing the resulting resources, with varying degrees of generosity and inclusion, into social programs like health care, education, child care, housing, Social Security, and a carbon-free future.
These policies, among many others, are both just and essential to meet the scale of the danger and dysfunction in our society, and the pandemic has only served to reinforce their moral and social necessity. But a central—even rudimentary—question that I’ve not often heard asked is: How, exactly, do men like Bezos, Zuckerberg, and Page get so obscenely and dangerously wealthy in the first place? As experts warn of an increasingly concentrated and unequal post-pandemic economy, answering this question takes on new urgency.
You don’t have to look hard to find it: Jeff Bezos, Mark Zuckerberg, and Warren Buffett, who sits at the #3 spot of America’s wealthiest individuals, have been telling us for years. “What we’re trying to do,” Buffett has said, “is we’re trying to find a business with a wide and long-lasting moat around it…protecting a terrific economic castle with an honest lord in charge of the castle.” Bezos describes his strategy similarly, asserting that “the stronger our market leadership, the more powerful our economic model…we will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages.” Zuckerberg has conveyed the same approach, but more to-the-point; for many years, he allegedly ended staff meetings shouting, “Domination!”
In other words, the best way to get astronomically rich in America is to acquire monopoly power to extract wealth from workers, consumers, entrepreneurs, small businesses, and, through tax breaks, subsidies, and contracts, our government itself.
Pick a market, and you’ll likely find that power is concentrated in one or a handful of entrenched corporations: from Microsoft’s control over software to Mars’s roll up of the candy business to Koch Industries’ powerhouse fertilizer and petrochemical conglomerate to Wal-Mart’s displacement of local retail to Cargill’s dominance of major parts of our food system. You’ll find the same in smaller markets, too; Beckton Dickenson controls syringes, Intuit controls tax filing, and even the cheerleading “industry” is monopolized: Bain Capital-owned Varsity Brands controls everything from equipment and apparel to the National Cheerleading Association itself.
The whole point of monopolies is to have a market position that allows for the ongoing extraction of, or exclusion from, wealth and power from others with whom the monopoly has an economic relationship. One study found the average family is $5,000 poorer every year because of lost wages and higher prices resulting from corporate concentration. (Compare that to the CARES Act’s provision of a $1,200 stimulus check.) A University of Chicago economist found that an individual worker’s average wages would be $10,000 higher today if the government had ensured markets were as competitive as they’d been in 1980. These and other consequences of monopolization fall even harder on marginalized communities, creating yet another systemic barrier to building wealth and power.
In short, monopolies are powerful generators of the inequality that progressives decry. Trying to address wealth inequality without addressing monopoly power is like trying to stop a boat with a hole in the bottom from sinking by bailing out the water, but not plugging up the hole. Not only that, but as we see explicitly through Facebook’s tacit cooperation with the Trump reelection campaign, monopoly power translates into unaccountable political power that subverts democracy.
What can we do about it?
Even as the tech platforms go on a pandemic-fueled merger spree, the debate over how to address the power of the tech platforms has advanced into a detailed, specific phase. Blueprints for why and how to break up and regulate Big Tech to serve the public interest have been published all over the world, including one by my own organization, the American Economic Liberties Project, while the House Antitrust Subcommittee prepares its final recommendations. But the urgent, solutions-focused specificity of this debate has not fully translated up into a broader set of social questions in which the Big Tech challenge is just one subset: the proper roles of, and relationship between, public and private power in society. With an election on the horizon, now is the time to turn up the dial on developing a comprehensive, detailed, and actionable vision for this generation-long project of reorientation.
Reinvigorating antitrust is an essential part. We can begin to arrest and reverse concentration across the board by restructuring markets through new laws, aggressive antitrust enforcement, and more assertive rulemakings at the Federal Trade Commission. Congress and regulators can advance industry-specific investigations and remedies for particularly concentrated and abusive markets, like agriculture and health care.
But reinvigorating antitrust should be understood as just one tool in what needs to be a broader government-wide effort to rebalance how power flows through our system of commerce. We can think about how to approach this in two parts.
The first is centered around the need for a change in using government. Public officials need to be held accountable for making different choices that will restrain and restructure corporate power using a wide variety of approaches and authorities. The second part is changing government, or addressing how 40 years of neoliberal thinking and corporate influence have hard-wired a bias toward bigness deep into the structure of the federal bureaucracy.
For that first part, there is no single bill or one-size-fits-all solution. Instead, we need an interrelated set of policy programs designed to move power from private financiers and monopolists to workers, small business, and consumers. A constellation of federal and state democratic institutions—Congress, federal agencies, state governments—need to wield a suite of policy tools, including antitrust enforcement, anti-corruption measures, tax policy, financial regulation, procurement policy, international trade arrangements, and a reinvigorated administrative state, to challenge monopolies’ dominance and promote fair competition.
To meaningfully address inequality and exclusion, decentralizing economic power must accompanied by far more expansive social welfare programs and aggressive redistribution, areas where progressives bring significant expertise and bold new policy ideas have flourished. Providing capital to communities that have been subject to structural exclusion and strengthening labor bargaining power are crucial complements to decentralizing economic power, and rather than deferring to private corporations to control access to basic necessities, more and larger roles for public institutions, like government provision of health care or public options for drug manufacturing, facilitate broad-based economic power, inclusion, and well-being. Eliminating abusive or corrupting private institutions, like private prisons, most for-profit colleges, and large swaths of the private equity industry is also part of ensuring power is broadly shared.
The second part requires a dive into the dysfunction, set deep into the operational structure and culture of our institutions, that biases them toward bigness. For instance, in The American Prospect, journalist Alex Sammon chronicled how, over time, large corporations have had their way with the Small Business Administration, while banking expert Graham Steele has written about the Fed’s colossal role in shaping the economy in ways that exacerbate consolidated power and inequality despite its nominal mandate to promote full employment. Former Department of Labor staffer Kalen Pruss has made a forceful case for eliminating a key agency called the Office of Information and Regulatory Affairs, which is a little-known chokepoint that has a track record of blocking progressive rulemaking at odds with industry’s wishes. Reprogramming the often-arcane bureaucratic structures and regulatory processes so that they work for, rather than against, the provision of economic liberty for all is a huge but essential undertaking.
At the American Economic Liberties Project, our role is to fight to establish and protect economic liberties for all. Just as organizations like the ACLU fight to defend civil liberties from abuses of public power, we aim to be a part of a larger movement to force our democratic institutions to defend economic liberties from abuses of concentrated private power, and ultimately to dismantle it. The economic liberties we fight for include ensuring that workers, consumers, and communities are freed from unjust transfers of wealth and abuse from monopolists, and entrepreneurs and businesses can succeed on the merits of their ideas and hard work, free from coercion. These goals are situated within this broader ecosystem of diverse organizations and movements that are increasingly working together to fight to reorganize public and private institutions to realize a vision of true liberty and justice for all.
In President Franklin Delano Roosevelt’s 1932 inauguration speech, he reflected on the character of the society he inherited, noting how robber barons, like kings of old, had imposed an autocratic political system within the economy, what he called an “industrial dictatorship.” He set out to break this structure apart. “Liberty,” he continued, “requires opportunity to make a living—a living decent according to the standard of the time, a living which gives man not only enough to live by, but something to live for.” In 1944, as his presidency was coming to an end, Roosevelt laid out an economic bill of rights, a charter to guide Democrats going forward. One of them was freedom from “domination by monopolies at home or abroad.” Now is the time to listen.