Break up the monopoly party
As we head into the final, frantic weeks before the general election, Fordham University law professor and political activist Zephyr Teachout is warning progressives everywhere to get ready for a huge political battle to break up the giant mega-corporations like Google, Facebook, Apple, Uber, Seamless and Perdue that dominate so much of our economic lives — and, increasingly, our politics.
“There are few exceptions, like pest control, that are still pretty decentralized, but in almost every other industry, what you’ll find is that you’ve just seen this collapse, from 500 [companies] to five, over and over again,” she told me. “I think it’s really a political revolution that’s happened without us noticing it.”
That’s not an exaggeration. The last five years alone saw corporate mergers valued at $4 trillion, she writes in her new book, ”Break ‘Em Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money.”
The concentration of corporate power, Teachout writes, means radically less consumer choice.
“Two corporations control office supplies. Four corporations control wireless. Five corporations control food, she writes. “Four corporations control home internet, and in many parts of the country, people have no say at all about which provider they use.”
A lack of purchase options isn’t the worst of it, she writes: “These monopolies extract wealth from people directly, through price-gouging and wage theft, and indirectly, by causing regional inequality and closing off opportunities to start businesses. They then extract political power too, so they can keep it that way.”
Teachout, who has run unsuccessfully for governor, Congress and state attorney general, is often ahead of her time. She was a lawyer for Occupy Wall Street and in 2014 wrote an excellent book, ”Corruption in America,” that explained the Emoluments Clause of the Constitution a full two years before a newly elected president, Donald Trump, violated the law with gleeful abandon.
“There is rightly a lot of focus on the horrific, anti-democratic, corrupt Donald Trump,” Teachout told me. “We cannot, because of that, stop paying attention to this other thing that is happening and happening pretty quickly. We allowed 500,000 mergers in the last 11 years.” (Our conversation is online at ”You Decide,” my podcast.)
In the not-too-distant past, anti-monopoly laws would have prevented the concentration of power in the hands of so few companies. The early 1980s saw a federal court, at the request of the Justice Department, force the breakup of the original, dominant AT&T phone company into regional “Baby Bells” like NYNEX (now Verizon), US West (now CenturyLink) and other companies.
Years later, we have infinitely more innovation, more choice and more business than under the old Bell system monopoly. In 2000, a different court forced Microsoft to stop the practice of tying its web browser to its operating system in ways that made competition in the search business impossible.
This, too, turned out to be great for business.
“If the government hadn’t chased around Microsoft and effectively forced it to break up, then we might not have the growth of the contemporary Silicon Valley,” Teachout says. “We’d be stuck with Bing.”
It’s not out of the question for the government to make use of existing anti-monopoly laws to prevent more mega-mergers, says Teachout — or indeed to break up some of the giant corporations that are extinguishing choice and relentlessly squeezing money out of workers and small businesses.
“There’s a reason the Sherman [AntiMonopoly] Act is a criminal act,” she says, noting that early in American history, “people talked about monopoly as a form of theft because they saw it as basically a highway robber standing at a choke point and taking value from the people who are creating value.”
As with the case of presidential emoluments, Teachout may be a little early on her timing. But she’s giving us an early warning about a problem society needs to fix.
Louis is political anchor of NY1 News.