Week Four Essay - The Antitrust Tool in Our Box

Many of the problems we see in The Story of More and in Falter can be listed under the category of ‘problems with the concentration of economic power’. Too few corporations control the food supply and distribution system. Too few corporations control the technology sector. With economic power comes political power; with political power comes the power to preserve the economic power. It is a threat to our democratic system.

Our economic system is not a pure capitalist system, but a mixed economic system. A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. Through our government, we provide the rules under which the capitalists must play the game. All games have rules and referees or umpires to ensure compliance with the rules of the game.

The rules of the capitalism game relating to concentration of economic power are antitrust legislation and policies. They began in 1890 with the passing of the Sherman Antitrust Act. The legal fiction of a trust was used to combine businesses. These were the days of the robber barons, Henry Ford, Andrew Carnegie, Cornelius Vanderbilt, and John D. Rockefeller. And these were the days of the “trust buster” president, (progressive) Republican Teddy Roosevelt, who stood up to their power in the interest of the American people.

Antitrust laws are not unambiguous (that’s lawyer speak; lawyers love double negatives). Their interpretation and enforcement depends on the economic policies of the administration enforcing them, the referees and umpires. Throughout its history, American antitrust policy has been subject to multiple interpretations whose goals have included preserving local businesses, protecting consumers and small producers against the superior market power of large corporations, and safeguarding the competitive process. But in the late 1970s, antitrust jurisprudence and enforcement adopted a framework which eliminated the qualitative and pluralist dimensions of antitrust enforcement, and focused almost exclusively on economic efficiency. This has led to increased corporate concentration, including increased inequality, decreased entrepreneurship, and the concentration of economic growth into a small number of geographical areas. What we can now see is that concentration of economic power has danger even when resulting efficiencies don’t lead to price increases. A proper consumer welfare antitrust policy would encompass quality and innovation in its concerns. Also, focusing only on consumer welfare is inadequate because it pays no attention to the threat corporate power poses to democratic institutions.

Antitrust legislation provides the tools to deal with Monsanto, and Facebook, and Google. All we need is progressive leadership like Teddy Roosevelt to stand up to economic power and act for the people.

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Week Four Point Total – 5

Four Week Cumulative Point Total – 20