How American Business Got So Big

The country is living with the consequences of 35 years of lax antitrust enforcement—including lower wages and costlier consumer products.

Udo Keppler

Over the course of the presidential campaign, Donald Trump made plenty of promises about how he would reshape the economy. One thing he would do if elected, he said, was investigate the enormous online retailer Amazon for violation of antitrust regulations.

In suggesting that Amazon, as well as many other large corporations, should be subjected to greater scrutiny, Trump is echoing a growing concern about the concentration of corporate power. He is also—in some ways—echoing the work of Barry Lynn, a senior fellow at New America, a centrist think tank, who has for years been studying markets, trade, and the diminishment of antimonopoly sentiment in the U.S. His most recent book, Cornered: The New Monopoly Capitalism and the Economics of Destruction, looks at the growth of monopolies in the 21st century and politicians’ unwillingness to prevent them from forming.

I spoke with Lynn about the outcome of the election and why he thinks Americans should be more concerned about enforcing antitrust and antimonopoly regulations. The conversation below has been lightly edited.

Gillian B. White: What made you decide to focus your work and research on monopolies and corporate concentration?

Barry Lynn: I first became interested 15 years ago when I was doing an article about the breakdown of industrial systems after an earthquake in Taiwan, back in 1999. Then after the earthquake in Japan back in March of 2011—with the giant tsunamis—there were all of these disruptions in global supply chains and international supply chains that led to these really sharp drops in industrial activity all around the world. Here you have an earthquake off the north coast of Japan, and suddenly you had the biggest drop-off in manufacturing activity in the United States over the course of the next three months. So without going into much detail, I was looking at the ways in which industrial activity was organized, and our attitudes toward hyper-concentration of certain kinds of industrial activity revealed to me that there had been a revolution in our thinking about competition and about the dangers caused by concentration.

White: Right, so there was a period in America where there was an active, ongoing effort to prevent and break up monopolies. And now it seems like policymakers and industry are both less concerned. What precipitated this shift?

Lynn: It was an intellectual revolution before it became a policy and political revolution. It’s related to the rise of the libertarian right, or the neoliberal left, but it was the Chicago Schoolers who really emerged to the fore as a power in the mid- to late-‘70s. They came up with a whole new way of looking at political economics, and it was focused on the promotion of efficiency, theoretically in the name of creating more material wealth for people. And the original purposes of antitrust, going back to the founding [of the country], was to protect our liberties as actors within our marketplace.

White: Can you talk more about the original intent of antimonopoly and antitrust stances toward corporate structures?

Lynn: The purpose of antimonopoly was to protect our democratic institutions against the concentration of wealth and of political power. The purpose of our antimonopoly laws was to protect our communities against distant capitalists taking control of local commerce that we believe that we should be in control of. Those political and social goals were at the heart of antimonopoly thinking in the United States at the community level, at the state level, and later at the federal level for 200 years. The Chicago Schoolers came along in the late ‘70s, early ‘80s, and said, "No no, no, that's inefficient. That's wasteful. That's getting in the way of more material wealth. So let us change things." And we did. Run that new coding for 35 years and you end up with massive concentration in just about every single sector of the U.S. political economy.

White: How does concentration in these sectors play out at the individual or personal level, in day-to-day life?

Lynn: Monopoly means—very simply put—that we pay more for things and we get paid less for our work. And so over the course of a year, maybe that's not going to have a really big effect on us, our communities, our families. But if you run that out for 30 years, then it's going to have a really huge effect on our society. It means that we can afford less stuff than we would otherwise be able to afford, that the quality of the goods that we have in our households is in some cases less than it should be. But it also means that our power, our say over our own lives, our political power vis–à–vis our fellow citizens, is less than it should be. That's only one of the many, many effects of this concentration that you see.

White: Do you think that people are in the dark about this?

Lynn: I think people have understood this for a while. Occupy, back in 2011, was in many respects an antimonopoly movement, at least at the initial stages. So was the Tea Party back in 2010. The American people—their anger is to a very large degree antimonopoly anger.

White: The topic of antitrust resurfaced in a fairly public way during the election when Trump said that he would investigate Amazon for violation of antitrust regulation. Were you excited about that?

Lynn: At some point soon—it should have already been done—our antitrust authorities should have to step in and deal with this real and growing problem. As for president-elect Trump's threats against Amazon, I don't think he was looking very specifically at any part of any particular market—I think he just felt that Jeff Bezos has too much power, and that he was using this power in ways that were perhaps getting in the way of Donald Trump's desire to be president.

One of the things that we've learned in the past is that you don't want to use antitrust enforcement to promote the personal aims of a president. We really have worked hard in this country to ensure that antimonopoly law is applied according to certain principles, and that is not part of how you wield power internally in the United States. So, although we would welcome action against Amazon, especially focused on Amazon's abuse of its monopoly over the book market, we would be very upset if this kind of power is abused to promote personal agendas.  

White: Trade has been another topic that has come up a lot prior to the election. I wanted to hear your thoughts on the intersection of monopolies and trade policy.

Lynn: There's an intimate interconnection between monopolization and trade patterns. Trade policy is how you fight monopolies abroad—at least for 200 years—so it's a subset of competition policy. The primary goal with trade policy is to make sure that a foreign monopolist, a foreign mercantilist, doesn't sort of rip you off or gain power in a way that gives them political control over you. That’s the primary purpose, going back to the founding. Remember that independence, back in 1776, was independence from the British imperial trading system. The War of 1812 was fought to reassert that independence from the British imperial trading system.

One of the things that we've seen over the last generation with the rise of monopoly is, when you have a monopoly here in the United States, it means that you don't really have to manufacture things in the States—you can actually make more money if you outsource the things that used to be manufactured here to some place where the quality of the goods is not as high. You don't have to have your eyeball on the actual manufacturing process, since there's no real competition. You also have all these political ramifications: The United States finds itself dependent on important things that are made abroad in nation-states that are not necessarily our friends, or that don't necessarily see the world as we do.

White: During the campaign, Trump criticized lots of companies for outsourcing and lots of politicians for trade deals that he said hurt the U.S. Did you agree with his sentiments?

Lynn:  I think Trump is coming at this in a very different way than I would look at it. I have a lot of friends who have opposed the radical globalization that we've seen over the last 20 years. A lot of them are somewhat old-fashioned protectionists—what they want is to make things here either because they want to protect the capitalists who don't want to go to China, or because they want to protect certain kinds of jobs. Both groups were involved on the Trump side during this last campaign.

I look at it as more a matter of how power is wielded across international industrial systems. What we're seeing is a reaction—people in the industrial Midwest who just felt screwed, and screwed again. They've been told to blame it on the Mexicans; they've been told to blame it on the Chinese. In many cases it's neither the Mexicans nor the Chinese that did this to them. It's some local monopolist—it's someone right here. It's a monopolist on Wall Street that bought up a whole bunch of companies and got rid of competition, so he didn't need to make things here anymore. I think that the argument that the Trump people are putting out fits the way people have been taught to read this, but it's not necessarily an accurate depiction of how the world works.

White: Do you think the incoming administration will do anything concrete when it comes to strengthening antitrust and antimonopoly policies?

Lynn: Your guess is as good as mine. The person who he's put up [as a member of the Trump transition team], Joshua Wright, is about as extreme a libertarian, as extreme a pro-monopolist as you can find in the United States of America. So, as long as he is serious about leaving Josh Wright in that position, that means that everything he said about fighting monopoly, be it Amazon or be it the AT&T–Time Warner merger—we can't take that seriously. Because Josh Wright is about as dear a friend as the monopolists have in Washington. (Neither Joshua Wright nor Donald Trump’s press team responded to a request for comment for this story. Wright recently wrote an op-ed about his views on antitrust and antimonopoly regulation in The New York Times.)

White: What type of change would you want to see to feel convinced that the country is making strides in the right direction?

Lynn: In many ways, we're already in a situation that is worse than at the height of the Gilded Age. We need to see people getting serious about taking on Silicon Valley, and we need to see that now.

What we see with President-elect Trump is somebody who was able to distract people from this anti-corporate anger by dangling out the Mexican as the villain, by pointing at the Chinese as the villain, by pointing at the Muslim as the villain. There's an opportunity here to get people to continue down the track they were already on and say, "Hey, we have to take on this corporate concentration, because it is a direct threat to our democracy and our liberties." We can do this in a very constructive and productive way, following the best American traditions. Or we can kind of wander blindly down the path that we're now on.