Democrats are waking up to the realities of economic power. Less than a decade ago, the subject was taboo. Even with the economy in ruins, Democratic leadership saw no option beyond neoliberalism. But since the 2016 primaries, a split has opened up in the party. With it has come a resurgence of antimonopoly politics that neoliberal leaders can no longer ignore.
At first blush, it looks like antimonopoly heightens the conflict between socialists committed to overcoming capitalism and establishment centrists seeking to save it from populist attacks on the left and right. But antimonopoly once contributed to mobilization, coalition building, and sustained reform across the liberal-left spectrum, and it might do so again today.
The Antimonopoly Tradition
Democracy and markets are fragile and demanding systems, easily corrupted by formidable concentrations of power. The antimonopoly tradition recognizes this fragility, and it makes no sharp distinction between economic and political power. Excessive concentrations of political power undermine economic prosperity no less than excessive concentrations of economic power corrupt democracy. The problem for law and public policy in a democracy with markets seems simple: how to check the constant tendency to concentrated power. There’s no clear-cut way to do that, because those who seek to attain power and lock in privilege are endlessly inventive. Under the right conditions, institutions designed to check power can be used to opposite ends. As a result, antimonopoly is far more than an ideology. It is a political project that requires vigilance, action, and constant adaptation.
Reformers have drawn on the antimonopoly tradition—which is far more wide-ranging than just antitrust, a set of policies designed to prevent predatory competition and break up concentrations of economic power—throughout U.S. history. In the 1830s, Jacksonians used it to authorize privatization, dismantling the Second Bank of the United States because it locked in the privilege of an overweening aristocracy. Abolitionists in the 1840s and 1850s drew on the antimonopoly tradition to dismantle the slave power. In the 1880s, populists enacted state antitrust laws to check the growth of corporate power. In the first decades of the twentieth century, Progressives went further, breaking up corporate power and boosting countervailing forces in government, unions, and proprietary enterprise. In the New Deal, the antimonopoly tradition broke the power of banks and industrial corporations and paved the way for regulation, collective bargaining, and welfare provision. In the 1940s, liberals drew on it to outlaw discriminatory pricing and check the predatory power of chain stores. In the 1950s and 1960s, antitrust administrators broke up patent monopolies, opening the way to high technology.
The antimonopoly tradition, as this sketch demonstrates, has enabled diverse political projects. In the first Gilded Age, it provided a challenge to laissez-faire constitutionalism—the legal doctrine that markets were autonomous from politics, and that property and contracts always protected individual liberty. In today’s Gilded Age, the antimonopoly tradition confronts market fundamentalism: the belief that liberty is best realized in market transactions insulated from democratic interference; that it is possible to organize markets effectively without government supervision; and that we ought not worry about concentrations of economic power, either because they are efficient or temporary.
The turn to market fundamentalism had a major impact on the practice of antitrust, severing it from its roots in the antimonopoly tradition. The University of Chicago–trained lawyer Robert Bork, who published The Antitrust Paradox in 1978, convinced Reagan’s Justice Department that antitrust blocked efficient forms of business organization. Left alone, corporations and capital markets could decide better than government regulators whether mergers, hostile takeovers, outsourcing, or breaking up and selling off corporate assets would serve consumers. If the result was concentrated power, so be it. In time, the Democrats agreed that the only goal of antitrust was to protect consumers. By 1992, antitrust had disappeared from their platform for the first time in a century.
The resurgence of the antimonopoly tradition among Democrats indicates a sea change in how they approach economic governance. Rather than limiting debate to after-the-fact redistribution, they have begun to ask how markets and business organizations can be structured to check concentrations of power. Many Democrats are converging on a platform to rebuild a more democratic economy, even as they disagree in fundamental ways over what that means, who should benefit, and how to achieve it. Still, the antimonopoly tradition’s shared appeal could open new possibilities for party politics and reform. This might seem overly optimistic, but a closer look at how the antimonopoly tradition has informed three ideological factions within the Democratic Party—democratic socialists, (neo)liberals, and antimonopolists proper—illustrates the potential for a broader politics focused on challenging concentrated power and building a more democratic economy.
The antimonopoly tradition has already seeped into contemporary democratic socialist politics. From Bernie Sanders’s presidential campaign to the Movement for Black Lives and the Green New Deal, socialists have combined the antimonopoly tradition with class analysis in a mixture fertile for reform.
On its face, the antimonopoly tradition seems at odds with socialism. Why improve markets when they are the site of labor exploitation? Why promote competition when it drives down labor and environmental standards worldwide? Isn’t the resurgence of antitrust yet another effort to save capitalism and coopt the socialist left? All of this might be true, if contemporary socialists conceived of socialism as a uniform system of public ownership of the means of production. But although they seek to decommodify critical areas of economic life (healthcare, education, and housing), many socialists advocate a mixture of economic forms: strong unions, co-determination, labor councils, employee stock ownership plans, cooperatives, credit unions, family farms, and community land trusts. Where public ownership is not a clear substitute for private economic power, many socialists have turned to the antimonopoly tradition to destabilize and prevent that power from accumulating.
Consider socialist proposals for banking. Many prominent democratic socialists support a return to Glass–Steagall, a classically antimonopoly solution to corporate power, rather than public ownership of banking. As Supreme Court Justice Louis Brandeis wrote in Other People’s Money and How Bankers Use It in 1914, allowing bankers to speculate on the savings of depositors was a conflict of interest. It fostered excessive risk-tasking, turned banking into a casino, enriched a small elite, and divided the interests of Wall Street from Main Street. The framers of Glass–Steagall hoped to check these tendencies. In the aftermath of the financial crisis, Sanders called not to nationalize banks that were too-big-to-fail but to break them up. The opposite, he argues, has occurred. The bailouts and the Dodd–Frank Act made banks bigger, fewer, and more powerful.
Socialists combine antimonopoly analysis of banking with class-based, anti-racist, and communitarian action. Black communities, for example, cannot be revitalized without a national credit fund and policies to support locally owned and run black banks. Worker-owned enterprise, cooperatives, and geographically rooted enterprise cannot thrive without renewed attention to community development and rural banks, local credit unions, and revolving credit funds. Socialists acknowledge that none of these alternatives are possible or sustainable without checking the power of the largest financial institutions in the first instance.
Socialists have a similar approach to agricultural policy. Sanders’s plan to revitalize rural America combines class and antimonopoly analysis. The monopolization of agriculture, reads his plan, has devastated family farms and rural communities. In pork production alone, consolidation resulted in an 82 percent decline in the number of hog farms in Iowa between 1982 and 2007. Worse still, corporate agriculture has turned formerly independent farmers into a dependent class through an exploitative system of vertical integration. Dominant meatpackers and chicken processors have taken ownership of livestock. They let out contracts to ranchers and farmers to raise it for cut-rate prices, under rules that foist cost and risk onto the producer. Machinery monopolies make it illegal to for farmers to repair their own equipment. Chemical giants routinely sue farmers for breach of patents.
The first line of defense in Sanders’s plan is not public or collective ownership but to “Enact and enforce [Teddy] Roosevelt-style trust-busting laws to stop monopolization of markets and break-up existing massive agribusiness; Place a moratorium on future mergers of large agribusiness corporations and break-up existing massive agribusinesses;” and enforce rules against exploitive vertical contracts.
The goal of these antitrust policies is not to unleash the free market, but to ensure that farmers receive fair prices and share risks with packers, processors, wholesalers, retailers, and consumers. This mixture of checks on the power of corporations and fair pricing among smaller producers is what Brandeis called “regulated competition.” The goal is to channel rivalry away from the sorts of predatory tactics enacted by big meatpackers into improvements in production processes and products. Like the Green New Deal, which promises to ensure “a commercial environment where every businessperson is free from unfair competition and domination by domestic or international monopolies,” Sanders’s plan promises to improve production by working with farmers and ranchers to remove greenhouse gas emissions from agriculture.
Liberals have also begun to draw on the antimonopoly tradition. Among the current Democratic presidential candidates, Amy Klobuchar is the best example of this tendency. A proud student of Robert Bork, Klobuchar is the ranking member of the Subcommittee on Antitrust, Competition Policy and Consumer Rights of the Senate Judiciary Committee.
For all Klobuchar’s commitment to “make antitrust cool again,” she worked hard to keep it walled off from the antimonopoly tradition until very recently. In 2016, Klobuchar introduced two bills to improve antitrust administration. The first made it easier to block mergers that increased consumer prices, lowered product quality, excluded competitors, undermined innovation, or unfairly lowered prices, and shifted the burden of proof from the state to corporations proposing mergers. The second bill, co-sponsored by nine Democrats, was designed to improve Federal Trade Commission (FTC) and Department of Justice (DOJ) capacities to serve consumers.
At the Open Markets Institute, where Barry Lynn and his colleagues have sounded the siren on monopoly power for more than a decade, Klobuchar’s proposals were met with appreciative skepticism: they raised consciousness but perpetuated the failed 1980s idea that the purpose of antimonopoly law is to protect consumers. Antitrust law, they insisted, was written to serve a variety of “political economic goals, primary among these being the defense of democratic institutions from consolidations of power and the defense of the market structures that promote the distribution of opportunity and wealth.”
More recently, Klobuchar has rekindled the antimonopoly tradition. Monopoly power, she now admits, can oppress workers and subcontractors even if consumers are served by low prices. Liberals call this sort of economic domination “monopsony” (or buying power). Klobuchar has promised to scrutinize it as much as consumer domination and to press for antitrust action in two industries where a small number of powerful corporations have suppressed wages and labor unions: airlines and rails.
Klobuchar is not the only Democratic liberal cautiously revisiting the antimonopoly tradition. Neoliberals like Hillary Clinton and Virginia Senator Mark Warner have begun to see monopoly power as an obstacle to their cherished motors of economic growth: entrepreneurship and technological innovation. Where they once blamed democracy and regulation for economic stagnation, they have begun to ask how monopolists use their deep pockets and political power to suppress entrepreneurship, competition, and technological responses to pressing problems like poverty and climate change. During the 2016 campaign, Clinton complained not only that monopolists exacted excessively high prices on pharmaceuticals, air travel, and internet access; she highlighted how they suppressed wages, blocked start-ups, and killed innovative small competitors. She promised to stop corporate concentration anywhere it unfairly limits competition, to close loopholes in the law that protect incumbent businesses, to direct the DOJ and the FTC to study the relationship between market consolidation and stagnating incomes, and to beef up antitrust enforcement. Even Joe Biden, no critic of economic power in the Senate, has expressed his support for more aggressive antitrust enforcement. Like Sanders, his “Plan for Rural America” promises to protect small- and medium-sized farmers and ranchers from the power of chemical, packing, and seed monopolies. Though Biden has yet to fulfill his promise to roll out an antitrust plan, it is hard to imagine he will produce one weaker than Clinton’s in the current political climate.
For some Democrats, like Elizabeth Warren and her allies in the Open Markets Institute, the antimonopoly tradition is so central to their politics that they may be thought of as antimonopolists. They have led the drive to bring antimonopoly tradition back into Democratic Party politics. At the time of the bank bailout and the passage of the Dodd–Frank Act, it was Warren who first said that if the nine largest banks were too big to fail, they should be broken up. And, among party leaders, it was Warren who argued most forcefully that the repeal of Glass–Steagall under Clinton had contributed to the financial crisis.
Warren is an antimonopolist who loves markets. She is a is a lawyer who, unlike the Clintons and Klobuchar, resisted indoctrination by Bork’s law-and-economics movement. Although she flirted with these ideas early in her career, studying bankruptcy convinced her that “reality is a lot messier than these theories.” The majority of people who declared bankruptcy, she learned, were thrown into turmoil by health issues, unemployment, or personal crisis, not because they were reckless borrowers. Studying bankruptcy, moreover, revealed the larger problem of the vast expansion of consumer credit to compensate for stagnant wages. Just as progressive legal realists developed a critique of labor contracts a century before, Warren came to view credit contracts as corrupted by structural inequalities. Lenders exploited their power to deceive and manipulate borrowers, collude among themselves, and threaten delinquents.
Warren’s conclusions placed her in opposition to the powerful alliance of conservative legal scholars, foundations, and the financial services industry. She debated bankruptcy law with the dean of the Chicago Law School and fought the credit card industry’s efforts to tighten bankruptcy restrictions. Appointed by Congress to monitor the bank bailout in 2008, Warren saw political corruption, predatory business behavior, and monopoly power everywhere she looked.
Like Progressive Era antimonopolists before her, Warren insists that markets are not self-regulating entities autonomous from law and politics. Markets either have good rules or bad rules, either enforced or unenforced. The design and enforcement of these rules make markets more or less egalitarian. In more egalitarian markets, people are likely to make bargains that made them better off; power is more likely to be temporary and less likely to corrupt politics. In autocratic markets, theft becomes legitimate and might makes right.
If structural inequalities undermine the good markets can do and corrupts politics, then it is not enough, say, to improve the FTC’s capacity to monitor Amazon, as liberal technocrats suggest. Amazon amassed and locks in its power by serving as a platform for its vendors and as a competitor to them. It monitors their successes, copies them, and then favors its own subsidiaries until it drives competitors into the ground. When Warren says break up Amazon, she means it should not be allowed to be a platform for other businesses and a competitor against them simultaneously.
The antimonopoly tradition acknowledges the inventiveness of the powerful. That means it is necessary to build countervailing power in the state and civil society. If Congress outlaws mortgages or credit cards whose interest rates can be raised without notice, lenders will invent new predatory instruments—hence the need for a Consumer Finance Agency to monitor fraudulent behavior.
Cory Booker, a child of the black petit bourgeoisie, has also expressed antimonopolist convictions. He watched his parents’ funeral home get driven out of business by predatory competition from corporate chains. The same story, he notes, can be told for black banks, insurance companies, and retailers. Unlike Warren, who came to antimonpolism through professional conviction, Booker came to it the way many Americans have historically: through concrete experiences of predatory competition, which threatened livelihoods, communities, independence, and, in his case, racial self-determination.
While history has convinced me that antimonopolists better understand the development of U.S. political economy than either Marxists or liberals, it has also convinced me that every political project has its blind spots. Antimonopoly and liberal politics do not address class sufficiently. Socialist proposals are mostly unconcerned about innovation. Liberals are far too complacent about power. Each also has its strengths. Socialists show us how monopoly power oppresses labor, liberals how it impedes innovation and public problem solving, and antimonopolists how we can use existing legal and cultural resources to counter concentrated power and build a more democratic economy.
The antimonopoly tradition has energized a wide spectrum of people in the orbit of the Democratic Party. Combined with other political projects, it can help mobilize young people, small business, minority voters, non-college whites in the Midwest, and rural voters. It is a mistake to gag any version of it, because doing so has the potential to suppress mobilization across the diverse coalition that is the only weapon Democrats have against the Republican Party.
Democrats at war with themselves would do well to keep the antimonopoly tradition’s focus on power and building a more democratic economy in mind, independently and together. Sometimes this will necessitate vigorous debate. At other times, it will necessitate tolerance. Sometimes it will mean the same reforms, such as reinvigorating Glass–Steagall, will be interpreted differently by factions engaged in different political projects. And sometimes, it will mean surprising collaborations, like the one between Bernie Sanders and Chuck Schumer to regulate corporate stock buybacks.
For socialists, liberals, and antimonopolists alike, reinvigorating the antimonopoly tradition will require more than just words. Otherwise mistrust will fester. Socialists will have to support some policies that favor entrepreneurship. Liberals will have to stand up to powerful donors who will be subject to antitrust action. Antimonopolists will have to accept some solutions to monopoly power besides antitrust, such as public ownership or utility regulation. A Democratic Party that figures out how to use the antimonopoly tradition to forge a durable coalition for a more democratic economy may have a bright future.
Gerald Berk teaches political science at the University of Oregon. He is the author of Alternative Tracks: The Constitution of American Industrial Order, 1877-1916; Louis Brandeis and the Making of Regulated Competition, 1900-1932; and co-editor of Political Creativity: Reconfiguring Institutional Order and Change.