Fascism was a joint venture of corporate big businesses and governments that imposed totalitarian governance, authoritarian rule that demanded not just obedience but a conformance of thought and individual behaviors dictated by the regimes. Dissent and non-conformance led to imprisonments and executions.
The drive to consolidate, merge, and acquire businesses to reduce competition to other similarly dominant entities, as well as to eliminate nearly or all competition has been a major way to increase companies’ values without the risks associated with increasing new wealth. In addition, communication franchises created by municipalities to provide reliable communications have become country wide businesses bigger than any local government and able to control how and what is communicated with little or no control by the public. Remember, unlike newspapers, the electronic media is limited by nature to limited frequencies in which to deliver content and only those who have those franchises can use them. The result is that without government regulations, relative wealth and power can easily be used to restrict access by private entities.
So history tells us that the monopolistic corporations could use the media and their dominance’s in the economies of the world to turn themselves into partners in governance with governments across the world. The reality is that it’s easier to do this than to prevent it. We could see the return of fascist states in the near future.
73
I look forward to seeing if Professor Wu’s book will provide any concrete proposals. Unfortunately this article argues that a problem exists but fails to offer a solution other than a general suggestion that the antitrust laws should be strengthened.
If the problem is the impact of economic concentration on price competition, then the current laws are adequate. That is not to say that enforcement within those laws cannot be strengthened, although that would be hard to accomplish with the current Supreme Court.
If the problem is economic concentration because of its political effect regardless of its impact on competition, then any law enforcement solution is difficult. Antitrust defines and measures concentration within markets based on completion, something that will be hard to jettison.
8
Consider the law preventing Medicare from negotiating for lower drug prices: That particular lobbying project cost the industry more than $100 million — but it returns some $15 billion a year in higher payments for its products. This is where it all originates, in the halls of Congress. To protect our Democracy and our economy pass term limits for Congress. Otherwise they just get fat in D.C.
129
This article reminds me of Peter Thiel's infamous claim that monopolies are preferable to competition. No wonder he supported Trump. We need to wean ourselves off their seductive gadgets and networks but I am not so sure where we are going to find the political will to do so.
Part of the problem is that modern monopolies work - they are well designed, they are more efficient than the companies they supplant and they are more customer oriented than a grizzly mom and pop store. Who doesn't like their Amazon prime and who can live without Google? A monopoly such as Amazon is able to use its central role to bargain for lower prices for the customer - who cares if their employees faint from the heat in the warehouse?
Another reason monopolies work is because it's easier for them to lobby for favorable policies; they don't need to worry about competitors with different priorities. Every acquisition by Amazon or Google or Bayer makes it easier for them to get laws passed in their favor and also easier for them to lobby against Verizon or Comcast for net neutrality. It's easier going against a heavyweight if you're one yourself.
I am not convinced that antitrust action will work - they are national solutions to companies that are global by nature. Monopolistic capital weakens the nation state itself and the tragedies of Brexit, Trump and Bolsonaro are signs of the powerlessness of nation states to respond to our networked era.
59
Professor Wu is not alone. Professor Luigi Zingales at the University of Chicago has voiced similar concerns. For good reason.
36
Corporations organize labor efficiently. Large corporations are more efficient and are able to undertake large projects. They are also the most profitable, hence they are rewarded by Mr. Market.
As more and more individuals rely on unearned income, we demand production and distribution efficiencies that vertical and horizontal integration ultimately provide. Competition is reduced or eliminated, because it is inefficient; regulatory capture results in Galbraith's Industrial State.
12
Reform through the electoral process no longer seems possible because too large a proportion of the electorate lack the ability to reason critically about the important matters affecting their lives, making them easy targets of a demagoguery that is amplified in the silos of social media and geographic cultural segregation.
I don't believe that this stems, necessarily and in all cases, from a deficiency in the raw cognitive aptitudes that are assessed by written tests of scholastic intelligence. Instead it derives from a failure by the education system to impart critical thinking as an integral habit of thought.
Witness the recent television advertising campaign by the Republican party. It is only necessary to tar your opponent or his policies with the fraught term "socialism" to trigger a knee-jerk reaction strong enough to guarantee your victory in any election. The charge of communism from the McCarthy era has been replaced with that of socialism today. Tactics like this seem to work nearly 100% of the time in blocking any kind of reform.
94
Corporations eliminate all the ideal virtues of free markets. That is why they exist, to eliminate the constraints imposed by buyers and sellers having enough knowledge and power to negotiate freely. Monopolies can determine the products and services from which customers may choose and prices which customers can afford to pay. The result are publicly traded securities that are extremely profitable to buy and sell, so are always favored in financial markets. These corporations make huge profits and concentrate so much power that they can have their way across the world. Only big government can control how these institutions behave, they are not moderated by markets unless their greed erases their customer bases.
27
Governments are the police force of economic systems. When economic power - ownership, governance income, and wealth are dispersed broadly among the people - only then can the people prosper, and only in such an economic system can democracy prosper.
Dr. Wu said what the political talk shows - owned and controlled by the large corporate monopolies he warns us about - fail to say daily. The two most important issues of our civilization are 1. a serious consideration of the relationship between corporate capitalism and our failing societies, and 2. an appropriately serious daily review of the most serious existential threat to our species - climate change. The corporate masters carefully divert us with far more skill than the clown they love to obsess over. We are wired to believe pretty, handsome faces, symmetrical, looking straight at us (the lens), who probably don't understand - that sincere look may be real.
41
Yes! But the biggest monopolies of all are the Republican and Democratic party. Break up that cartel and we'll all be happier.
11
Good Article. Clear warning signs!
9
Thank you, Professor Wu!
A consequence (and motivator) of concentration in industry is the concentration of personal wealth.
It is hard to manipulate a person who feels secure, safe, and well-fed. It is much easier to manipulate those who are anxious, frightened, and hungry. (By "manipulate" I mean getting people to vote against their best interests by blaming the "other" and by offering temporary or minor appeasements.)
The solution, a century ago, was the rise of unions and a highly progressive tax structure (top marginal rates above 70%). Now we have tax cuts and the "gig economy" (in union terms, we are all scabs).
Will we muster the political will, and wisdom, to turn the tide? Perhaps the pain of income and wealth inequality will lead to action. (Witness the blue wave in the recent election.) Or are we headed to further concentration -- defending itself with lobbying, laws, misinformation, and gerrymandering -- that can resist all threats?
Reducing concentration in one post-Depression country led to unprecedented prosperity. Rising concentration and bigotry led another to ruin...from which it emerged by repudiating fascism.
The threat we face now is not Depression; it is inequality, which FEELS like Depression to those at the bottom. Now we add in climate change, the biggest existential threat of all. And the perils of climate change fall most heavily on...
34
This op-ed rehashes an observation that has been being made for quite some time, that the concentration of wealth is leading into a groundhogs day-like experience as in the rise of the Nazis in the 1930's.
What is woefully absent is the grand theatre of climate change, mass diasporas, and the dangers of a globalized world remaining stable amidst such tyranny.
16
In 1930’s Germany, the giant business’ were industrial. They were conservative. Today, our giant business’ are technological. They are left liberal. I think we have more to fear from a technocratic top down, we know what’s best for you take over than from an industrial proto fascism take over. Besides, all these the sky is falling fears show little faith in our founders and the system that has survived over 225 years.
4
I wonder what if any power the consumer has in the matter. Amazon, Google, Apple, Walmart........the list is long, seek dominance and wealth for a few. They are damaing our communities. It has made it so easy to buy somethng. Credit cards have made us slaves.
7
I never understood how the Nazi companies of Bayer, Volkswagen, etc were still allowed to continue after WWII. Why anyone that supported the allies would buy anything from them is another question. Germany (and Japan) were built up much more quickly than England after WWII. Even the Beatles who went to Germany in the late 50s wondered who won the war.
2
@RAH
We wanted their scientists, innovation and technology.
5
@RAH
Keynes wrote "The Economic Consequences of the Peace" following WWI, warning against beggaring your enemy. Also, Germany and Japan were destroyed, they modernized their factories as they rebuilt. The Germans were more adept at managing their fiat currency, having experience following WWI.
10
Douglas MacArthur, in writing the Japanese constitution, understood well the role of the Zaibatsu as a pillar of fascism there.
3
Excellent piece. The German industrialists were essential in making Hitler's rise to power possible. One need only take a look at the contracts that were signed between Hitler and the industrialists to get a glimpse of the legal foundation and financial incentives that supported and fueled WWII. Today, the military industrial complex in combination with the fossil fuel industry provide a similar framework that is ready to support war. Individual people that are manning positions in these corporations are mere puppets in a much larger system that has the potential for enormous destruction because there is enormous potential for profit. Trump is playing with fire.
16
Citizens Unite(d)!!! Brought to us by (R)egressive Supreme Court Justices Roberts, Scalia, Thomas, Alito and the mercurial Kennedy.
Hail to the pluto-corporatocracy! Predatory "capitalism" wins again!
31
Leftists see fascist behind every bush; in reality, no serious threat exists.
But if one is concerned about "the economic origins of totalitarianism", look no further than Medicare for All. If nationalizing 1/6 of the economy isn't a "concentration of economic power ... incompatible with liberal, constitutional democracy", what is?
Nazis and Commies aren't enemies because their so different; they'r enemies because the differences between them are so small: two socialists sects doing battle.
Big government is infinitely more of a threat to liberty than big business. And, yet, we have an entire Party in the US advocating for bigger, more oppressive government.
The Democratic Party is a much bigger threat than Amazon could ever dream of being.
7
Yes.
1
America loves the scrappy underdog. But if he grows and becomes the big dog, watch out. The government and other forces will try to limit his influence so that he’s not so big. I thing the FANG companies — Facebook, Amazon, Netflix, Google — better take care. They could soon be defanged.
6
What's interesting is the right's demonization of George Soros:
People with this level of wealth are the end product of exactly the type of system they want.
It's a fascinating hypocrisy: on one hand, capitalists sanctify the individual's liberty and ability to make choices in the market and political arena. And yet they are hell-bent on creating a winner-take-all system that leaves the consumer and voter with fewer choices.
We are headed back to the late 19th century, a time of monopolies: Standard Oil, Railroad trusts, meatpacking trusts,
Cattle barons.
20
It is welcome to hear this rare opinion expressed. Yet it is at the core of many of the pressing issues facing the US. Several examples:
A symptom of the evils of huge businesses was the Citizen's United decision, which gives the extremely rich the power to essentially buy candidates for office and dictate loopholes for laws. People vote, but their choices revolve around those that can collect enough graft money from big business for their campaigns.
Meaningful gun control legislation is essentially halted by money from the gun lobby through the NRA with millions of dollars doled out to candidates and loopholes like the one that limits sales, and not ownership, of extended gun magazines.
Citizens United essentially guarantees that there is no chance for environmental or global warming controls. That is a problem that may doom the possibility of human existence on earth within a century or two. And that is to support for this year's profits for a handful of big energy companies, even when a huge number of jobs are involved in solar and wind power industries, not monopolies yet.
Monopoly control gives a handful of social media tech industries the power to decide whether to limit Russian control of fake news sources. Citizens United gives politicians the ability to decide not to do anything about it.
Anti-trust laws are on the books, but will never be enforced because it doesn't contribute to the next increment in the Stock Market.
The
27
This is such an important article it should be on the front page of the Times. Thank you Professor Wu.
15
Perhaps it's time for the big media to quit talking about our National Clown and concentrate on informing people who can easily understand this threat. Articles should appear in all areas so the average person can understand what all this means. The problem with economic issues is the density in the language. It must be simplified and quickly since the debacle of the election that was stolen with help from Russia operatives. Roosevelt took on the monopolists and so can the economic industry. Clean it up.
18
Brilliant analysis. But I'd love to see a bit more detail at the level of causal mechanisms (getting from A to B to C). Can you illustrate with some detail from what's happening today in the countries you cite?
3
Right on! Every member of Congress and the Administration should read this!
3
Your voice is a lonely voice.
"...while United States public markets have lost almost 50 percent of their publicly traded firms."
Your story is the story of Capitalism. Capital, doing what it always does without a tether. As I read this the image of Rodin's "The Thinker" comes to mind, a lonely isolated image. Your story should be told a thousand times on cable TV just as Trump's story is told. But it won't be told there. It is too complicated to boost ratings. My daughter-in-law gave me a small "The Thinker" that resides atop a rock in the back corner of my back yard. It's the body of a frog in the pose of "The Thinker." In the future I will think of you and your lonely task as I pass by it...so much work...so much energy...passed by like most that pass by "The Thinker" without a second thought. Thanks for thinking, lonely man!
10
These arguments make eminent sense. But just try implementing any of the suggested changes in this political environment. The uneducated masses will be roused to anger with just one word: "Communism!"
9
Like widely available and inexpensive generic drugs, all big companies need to be turned into worker (not state ) owned and operated cooperatives after 10 years. Once Bezos, Gates and Zuckerberg, et al. make their first 50 billion, wean them off their status anxiety and resultant addiction to money and power and spread the wealth.
"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." J. K. Galbraith
“There can be no real political democracy unless there is something approaching an economic democracy.” Theodore Roosevelt
The question will arise, and arise in your day, though perhaps not fully in mine: Which shall rule — wealth or man; which shall lead — money or intellect; who shall fill public stations — educated and patriotic freemen, or the feudal serfs of corporate capital?” Chief Justice Edward G. Ryan of the Wisconsin Supreme Court in 1873
“The rich will strive to establish their dominion and enslave the rest. They always did. They always will. An oligarchy — not a republic — is the inevitable result. " Governeur Morris, Constitutional Convention, 1787
18
The issue of a weakening of anti-trust laws specifically, and anti-regulatory processes more generally, are being raised as key factors to be aware of, and pay attention to as “Bigness,” however delineated, limits democratic values, norms, behaviors and necessary safeguards. The article notes that “ we also need judges who better understand the political as well as economic goals of antitrust… prosecutors willing to bring big cases with the courage of trustbusters…”Your suggestions leave out the necessary roles that each one of US play in enabling a toxic culture of personal unaccountability of elected and selected policymakers. Of ALL political parties. At all levels. In all environments. Urban. Suburban and rural. Complacency seems to vie with complicity throughout American history, from colonial times until NOW, proudly expressing, in writings, and voicing mantras, about freedom for ALL while anchoring an ongoing WE-THEY daily life and culture which violates. By words and done-deeds. Of created, selected and targeted “the other(s).” Fellow human beings discriminated against. Marginalized. Dehumanized. Shamed. Humiliated. Lynched. Daily challenges and attacks on values and norms underpinning menschlichkeit as a socio-eco-political life style and not simply connected letters! Mutual mistrust. Mutual disrespect. Long before the birth of “BIGNESS.” There is much which needs to be begun. Sustained. “Bigness,” diminished, doesn’t transmute into accountability automatically.
2
Step 1: Repeal Citizens United
Step 2: Liberal Justices for people vs power
Step 3: Congressional election for the people (see step 1)
Step 4: Bring back deconsolidation of media organizations and make news, news not entertainment.
11
The late Harvard economist John Kenneth Galbraith is very relevant on this issue.
5
Just started reading "When Corporations Rule the World" by David C. Korten. As I started reading it I thought it was a recent book . Its copyrighted in 1995...
3
When one political party is already wholly bought and paid for and the other nearly so, there's no hope for the change Mr. Wu urges without the worker/middle-class organization which, he also points out, doesn't exist in this country.
Are Americans, with their preposterous dreams of wealth, racial resentments and cowboy fantasies, capable of mass-protest?
Is it merely coincidence that Obama dissolved his mass grassroot organization as soon as he won the election?
4
"Fascism should more properly be called corporatism because it is the merger of state and corporate power."
- Giovanni Gentile, in the first edition of the Italian Encyclopedia
(Enciclopedia Treccani)."
Giovanni Gentile (1875-1944) was a Italian philosopher who did most of the heavy lifting to construct Mussolini's fascist philosophy.
What we see in China today is very much like what Gentile described in the above quote, and which Noam Chomsky calls "state capitalism".
7
On the eve of the Civil War the 4 million enslaved black Africans were worth more than all of the other capital assets in America combined. Except for the land.
Listening to the drawling accent of those two sons of Confederate Alabama, Addison Mitchell McConnell, Jr. and Jefferson Beauregard Sessions, III you hear Dixie and see the Stars and Bars flying near Confederate monuments.
Since 9/11/01 a mere 0.75% of Americans have volunteered to wear the military uniform of any American armed force. While the rest of us including Donald Trump pretend to be brave, honorable and patriotic by rising to sing the national anthem and saluting the flag at sporting events.
4
"...the leader seeks alliances with large enterprises and the great monopolies... He gets their loyalty, and they avoid democratic accountability."
This is Putin's playbook.
5
This threat of corporate oligarchy and subsequent fascism is amplified by the gross economic illiteracy of most Americans, which in turn breeds indifference and complacency.
The greatest interaction the majority of us have with the giant banks is our credit card statement. We post on Facebook and order from amazon barely aware that they are the most obscenely wealthy companies on earth.
Ignorance and apathy more than anything breed the demise of democracy.
499
Recommended reading, The Order of the Day by Eric Vuillard, 2017 Prix Goncourt winner in France, available in English. The final paragraph begins “We never fall twice into the same abyss. But we always fall the same way, in a mixture of ridicule and dread....”
2
An interesting thesis. One thing different today is that a larger percentage of the population (at least in the US) has access to the bigness. In the 1930's women and people of color were nit significant in industry. Today we have more (not enough) companies led by women and minorities. I think this diversity will help guard against (not fully) some of the fascistic tendencies that we're seeing today in our country. The recent election shows that women got really scared in 2016; their fear was show to be real. When women have fear and power that is a prescription for a better democracy
4
I'm an Economics professor, and most of my students believe that larger and more profitable businesses must be more efficient -- and they believe this even after we have worked our way through the theoretical and empirical evidence which demonstrates that very large firms are profitable precisely because they are less efficient - meaning they restrict output to create greater scarcity and profits. In the current environment in the US, when we have many leaders who eschew science and evidence, and who value profits above all else, is it any wonder that policy reflects this ignorance?
24
For all its good points, this article misses a fundamental link between big corporations and political autocracy: both are opposed to democracy.
Big corporations are the very model of autocracy. The leadership at the top makes the decisions, which everyone below is supposed to obey. Small-scale stockholders ostensibly "own" the corporation, but their votes are essentially meaningless; it is the major stockholders -- the very, very rich -- whose voices matter, and they are generally in league with the corporate leadership whom, after all, they appoint.
In both spheres, the voices, choices, desires, and needs of ordinary people go unheard at best, reviled as evil at worst. We need democracy not just in our political life but in our economic life as well.
480
Are you talking about China? Theirs is "monopsony". They are not controlling the power of supply, but the power of demand -- with worst global consequences. Unfortunately, there is no effective antitrust law to curb the power of monopsony. Amazon's recent announcement to split its HQ2 between D.C. and New York is a good display of such power.
2
Bigness has given us "Citizens United." This perversion of our "freedom of speech" has allowed the "Big" to control what we think and what we believe. Not sure if anything can change that. We Americans love "Big" everything.
8
I agree with the author that democracy in the US is under threat. But what are the largest threats?
To my mind, a bigger threat is that democracies can vote themselves out of power. They do this because they do not protect freedoms of speech and press and the public become badly misinformed. Then the public and their representatives make bad decisions. Economic conditions worsen. And demagogues arise.
Obama made several bad decisions. He undercut the rule of law by trying to provide amnesty for illegal aliens through an executive order. This raises the question: Why vote if the president simply ignores the democratic process and decides to legislate himself by executive action? It makes it more likely that those who disagree with the action will turn to a demagogue, who may of course engage in executive orders of his own.
The NY Times has wandered from its earlier commitment to publishing only the news that is fit to print by publishing articles about salacious affairs and engaging in public shaming to bring down powerful white patriarchs. The problem with this is that it undercuts the courts as well as the constitutional freedoms of men who may be falsely accused.
Before long, voters and men in general realize that their rights can be dispensed with by an extremist liberal fringe who want to make change now without going through proper channels.
It is in this way that democracies fall. People begin to dispense with legalities when they are inconvenient.
2
Greed or the Greater Good?
Let’s return to a focus on the Greater Good.
It’s that simple.
5
Teach the masters of the biggest corporations in the land that they are not above the law is rather hard when we have a leader who actively seeks to promote exactly the totalitarian strategy Wu describes. Trump specifically, and Republicans more generally, seek concentration towards the end of consolidating political power. Their only goal is one-party rule while Trump envisions himself an authoritarian above the law.
Congress should absolutely add teeth to the Anti-Merger Act. However, we need to get rid of the would-be despot first. Otherwise, the trend towards economic and political concentration will persist. So long as Trump wields executive power, mergers like AT&T and Time Warner will not only continue but accelerate. We need to find leaders like Teddy before we can hope to turn the faucet on corruption off.
3
In his Op-ed, Professor Wu attempts to resurrect the intellectually bankrupt and long-ago rejected Columbia School of antitrust analysis by conflating it with fascism. He then proceeds to mischaracterize both the past and current states of concentration in product markets.
Size and scale are not grounds for antitrust enforcement, the abuse of that power by using unlawful conduct to monopolize a market are, the key being "unlawful conduct" as opposed to legitimate competition. Furthermore, only where such conduct reduces the performance of the market by raising prices is such conduct typically actionable. The laws proscribing monopolization are still in force and available to litigants, including the FTC and DOJ.
Perhaps in NYC one can patronize small businesses to access the wide assortment of goods found on Amazon. Perhaps one can go to the library of a large university to find the information available on Google. But, only if one lives in the insular world of a large university in a major city.
As one who has practiced for many years in the field of antitrust, I find that the professor's arguments academic rubbish. The Columbia School was rejected for very good reasons many years ago. It should remain entombed.
54
“We can have huge wealth in the hands of a relatively few people or we can have a democracy. But we can’t have both.” Louis Brandeis.
14
Pitch perfect. You understand history. Fascism is awful whether it's origins are from the far left or the far right. A nation founded on the principle of individual liberty should know better. We have been bamboozled into nice slogans like the "greater good", when the Founders actually referred only to the "common good." They did not ascribe same to what is being warped by the power seekers of today. In fact, our "liberalism" can and should only be seen in the context of John Locke. Our "goodness" can only be distributed from "the people". Not some institutional totalitarian machine.
3
Since the 80's when I started hearing and reading about Milton Friedman and his disciples (Alan Greenspan et al) I was incredulous that grown, college educated men could spout this nonsense. And yet, they were the vanguard of republican economic policy advisors. The fact that so many so-called economic gurus could willfully ignore the historical evidence of the results of their policies was frustrating and mind-boggling. Thank you so much for putting this out there again, but as usual, not as many people will read and understand this as needs to. I'm fearful all the time now that I witness the rapid deterioration of what's left of our democracy.
10
Brilliant piece! Societies forget important laws and ideals if they are not practiced, enforced and talked about...But while we slumber the lobbyists continue their focused, greedy lobbying.
It is time to seriously begin a national dialogue about a Constitutional amendment to ban money in politics. We need to make elections publicly funded and outlaw lobbying via checkbook. And, truly fund and support busting our corporate cartels. We need a Teddy Roosevelt.
I know a Constitutional amendment is a long and difficult process. But, our democracy is imperiled. This is exactly why our Founding Fathers wrote a Constitution that allows for amendment changes: to protect our freedom and democracy.
Let’s start working towards a Constitutional amendment to get rid of Citizens United and ban all money and benis going to politicians. Maybe then they will work towards the good of the whole country, and not just for the elite few.
7
Nice article. I buy all of it, mostly because the reality is the realization of predictions made by Adam Smith and Karl Marx, among others. I agree with the conclusions and possible solutions.
One problem. "More job killing big government regulations."
And really a lot of Americans will say, "No, we do not want that!", regardless of the reality. And liberals have no answer.
Delusional Conservatives vs Clueless Progressives, the conundrum of our times.
2
What I don't understand is why so few have cared about this for so long.
It's been obvious for decades that economic power was becoming alarmingly concentrated in fewer and fewer companies, but barely a whisper did you hear from anyone regarding how dangerous it is, even those who talked about the "1%."
Instead, we get the opposite, with virtually no pushback. It's "the banks are too big to fail," even after those "too big" banks had just plunged the economy into a terrible recession, or "mergers are okay if they're horizontal," as if the idea of horizontal and vertical economies made any sense at all and wasn't just a bogus concept designed to create cover for economic policies that deliberately encouraged economic power concentrated in fewer and fewer megacorporations.
Many on the left and the right got rebuked for years for believing that there was little difference between the Republican and Democratic Parties, but they were right in this regard - both parties have supported the economic policies that have created the megacorporate economy.
The Republicans saddled us with supply-side economics, which really means, supplying economic power to the few. To which the Democrats have done little but acquiesce.
The far right movement that overran conservatism and was co-opted by Donald Trump may look like a worker's movement to some, but it is not.
Let the words in this article be a wake-up call to this country - one we've needed for a long, long time.
342
Government is not a business. It should not be run as a business.
Government invests without a profit motive and fields a defense force. The investment should include the physical health of the nation governed as well as its economic health fueled by scientific research co-sponsored by government and business. Underpinning all of this is a strong, flexible infrastructure and friendly cultural and economic interactions with other countries with war as a last resort.
We don't need a CEO, we need leaders.
11
The financial crisis may have set in motion large-scale developments that are not all that different from the developments that gathered strength after WWI.
2
Abraham Lincoln on Corporations: "We may congratulate ourselves that this cruel war (the Civil War) is nearing its end. It has cost a vast amount of treasure and blood. . . . It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless."
The passage appears in a letter from Lincoln to (Col.) William F. Elkins, Nov. 21, 1864.
30
...except Lincoln's secretary flatly denied he wrote the passage, used in campaign material decades later.
See https://en.wikiquote.org/wiki/Abraham_Lincoln#Misattributed and https://www.nytimes.com/1896/10/03/archives/a-popocratic-forgery-remarks-attributed-to-lincoln-pro-nounced.html
1
@SR
It doesn’t matter. Those words are true and wise, whoever wrote them.
6
Dr. Wu is correct on all counts. Since the Reagan Adminstration, both Republicans and Democrats have found it politically expedient to eviscerate antitrust enforcement to achieve political and policy goals. Concentrated businesses are more effective politically and do get the results they seek - last year’s tax cuts are a good example. In the case of the Affordable Care Act, Democrats looked the other way on concentration in health care while major health sectors - e.g., PhARMA and hospitals - “contributed to funding the ACA” by agreeing to disproportionately small cuts in federal reimbursement in exchange for more favorable treatment in the market.
Readers should juxtapose Dr. Wu’s piece with today’s Op-Ed concerning the work of Yuval Harari. While Dr. Wu touches on tech, big data exponentially increases the risk of market concentration becoming the handmaiden of fascism.
Would tech companies as “governments” be different from a fascist regime partnering with oligopolistic industries? The federal government, which makes slow decisions ordinarily, can do almost nothing now due to political polarization, conservative capitulation to a would-be dictator in the Oval Office and continuing erosion of both America’s constitutional norms and public consensus about the limits of Presidential power and the value of informed democracy.
Enforce the antitrust laws? Absolutely. Necessary, but insufficient.
20
I think most readers will agree with the view point by Prof. Wu. But in reality big corporations contribute to both political parties, thus making the current situation hard to change. It will happen if a third political party emerges and takes control of the government.
3
@Usok
Typically, each corporation contributes to the two major parties as a hedge.
(I have manumitted such contributions as a corporate employee.)
@Usok
We need a Constitutional amendment to ban money in politics. We need publicly funded elections, no matter how long it will take and the difficulty of the process.
4
Thanks for that straightforward explanation. I have never seen it laid out so clearly.
5
The top few percent on the income distribution see their earnings accelerate rapidly while the bottom of the distribution see small if any gains. There is a self reinforcing dynamic in our taxation laws that taxes lightly at high income levels where the majority of investment income is enjoyed. Buffet has famously said that his secretary pays a higher tax burden than he. It is law governing "carried interest" and capital gains that do the trick. To maintain those laws, those of high income can afford political contributions. This allows congressmen to win elections, keep their jobs, and maintain or even increase the income advantage of their donors, thus reinforcing the cycle.
There is no logic I can see to justify taxing the labor of a human being harder that the labor of an invested dollar bill. In fact employees through their daily efforts build companies and our economy. Investors (other than in the Initial Public Offering of a company - a minuscule portion of daily trading volume) simply trade money for shares among themselves, building little more than the hype around a company.
Wage earners (other than executives paid at hundreds of times the rate of average workers) scratch for a living. They have no time for the political action that might unbend their backs. I know this because I was an employee, paid high taxes but managed to save and invest. Now I see how easy life is once you can cross over to watching your investments do all the work with little tax.
32
Kim Stanley Robinson grapples with this in his Mars Trilogy where the characters have the chance to shed earthly influence and start again. I haven't finished the series yet, so can't give you possibilities, but the lure of learning of them keep me going through the many worthy pages. Maybe it will you as well. FYI
I recently read an article, I think on Vox, that suggested that the telecoms who fund ALEC to draft and support state legislation gutting state oversight of phone systems were in violation of the anti-combine provisions of anti-trust law. That seems reasonable to me, but with Citizen's United, it would be logical to assume that any action against them working together politically would violate their first amendment rights.
I would suggest a simple amendment to the Constitution limiting all of the rights guaranteed in the Bill of Rights and the 14th Amendment except for procedural due process to natural persons--i.e. human beings.
23
Good article and good comments.
One area not specifically touched is that consolidation and mergers mean employees are going to be laid off. Employees are considered 'redundant' and make no mistake, mergers have a calculated headcount reduction to tout the synergy the merger will produce.
As for the employees, the more specialized the industries, the less chances the newly unemployed will find jobs requiring the same skills and with the same pay scale.
Being unemployed, making less money, having your skills underutilized, etc, creates anxiety in the person, their family and their community. This drama has been replayed all across America. And we wonder why populism is winning.
I've said this before, a society, local, state, or national, cannot depend on long term social stability when their tax base depends on the modern corporation. The only concern of the corporation is profit.
38
The Citizens United ruling has enabled a level of corporate and billionaire political giving never seen before. One political party is totally enthralled to their mega-donors, and the other is forced by economics and politics to turn to mega-donors. No wonder so many Americans do not vote, or vote for a demagogue, or vote for a third party.
The fate of our democracy is in our hands. We only have six years to save it.
10
Both of our major political parties have sold out to monopoly power. Reagan stopped enforcing anti-trust laws the day he took office and Democrats as well as Republicans have followed Reagan's lead.
It is easier to feel in control if there are fewer players. It is easier to gather large no-fuss campaign contributions if the economy is controlled by fewer larger corporations. That's really what economy of size means in political terms.
Obama's antitrust enforcement picked up slightly during his last two years in office. That's it. If we want an economy that really supports the middle class and upward economic mobility, we need strong antitrust laws that are vigorously enforced. We need strong unions. We need a country in which we do not have trillion dollar corporations. We need a country in which the rich do not control the funding of our elections.
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Trump voters are NOT reacting to economic woes. That's a myth. If they were, Trump would be public enemy #1 and his chances of election, zero.
They are responding enthusiastically to the 5- point Republican platform:
Hatred of non-whites.
Hatred of science and reason.
Hatred of the natural world.
Obsession with guns.
Religious psychosis.
28
These are the disguise to manipulate the populous to support of a corporate agenda of private power for the benefit of those who wish to be above the law.
4
@bob miller Agree 100%.
3
The way you do it is by licensing, not merging. If large institution "A" wants to merge with institution "B" the government (SEC is involved now so that's not a stretch), would only allow it on a temporary basis to make sure monopolistic side effects aren't too egregious. I write not 'too' egregious because there will definitely be monopolistic side effects. Monopolistic side effects are the driving force for the merger in the first place. If after say five years the SEC finds problems, then institution "A" must alleviate them, divest, or start over with a new license. A fine of 25% of ongoing gross revenues would be the penalty. Merging under these restrictions would prove financially prohibitive. Merges would diminish. Competition would prevail. Institution "A" loses, everyone else wins.
3
@Frederick
Nice in theory. But what’s to prevent the “temporary monopolies” from banding together - financially and politically - to put in place a new leadership that would over-rule your idea???
@Frederick We could have this in three months if Mitch, Mitch’s hall boys, and Ted could legislate that fines go to the GOP. The Greedy Old Party has wages to pay. Someone the president trusts would explain baffling legislation to the president and to his supporters with no comprehension of plain English, let alone legislation. To be fair, Republicans never understood Obama Care even when it was Romney Care. The people of Massachusetts understood. Those about to lose it understood. Mitch discounted them all. Mitch always discounts political wisdom not under his GOP thumb. Bafflement magnetized Trump to the GOP and has not gone far except to Trump’s traveling flying circuses.
So far, Trump has unrecoverably traumatized the nation. The GOP will forever blame Democrats for GOP accomplishments long after Trump flies. Blame, not government, is GOP forte.
2
Concentration of power is the natural end state of a system left to its devices. Success breeds success, and the successful put laws in place to solidify their position. At some point, the king declares that he is king because God wants him to be king.
The game of Monopoly was invented to teach people about this phenomenon. Once you own more assets than your opponents, you slowly force them into bankruptcy.
From an engineering point of view, the entire enterprise is a huge machine which is being designed by the powerful. Yet due to their manipulation of the rhetoric, any attempt to change their design will be stigmatized as social engineering.
At some point, the people must either claw things back and break up the monopolies, or succumb to the inevitable and admit that the king really does own everything in sight. The oligarchs know this, and will try to justify or hide their activities until it is too late. Using their control of the rhetoric, they will make it seem like it is the natural and proper order of things. Well so is living in a cave and hunting mammoths, but we got over that twenty thousand years ago.
Are we there yet? Can you see it coming?
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@mlbex
Let's not just call them monopolies, let's call them global conglomerates.
Here are a few ideas for how all the Davids can break up conglomerate monopoly power Goliaths:
1)Break them up into the smallest, SINGLE purpose companies (i.e. a Tv company should not be in the business of producing pharmaceuticals or have subsidiaries making F-15 fighter planes, etc)
2) There is no "democracy" without economic democracy. Transform each corporate charter into COOPERATIVE structure: the business would essentially be ONLY run BY & FOR the people actually working in it. They would reap the profits of their labor--not the financial, non-working, aristocrats siphoning the profits into their Wall street casino portfolios. Google: Mondragon--the most successful example of this business structure (founded in the 1950's!). Yes, it is possible to have a good quality of life as a worker when the system is balanced and just.
This would also restore true competition to an economic system, reestablishing a true "free market"---not the bogus globalist one that we've been indoctrinated with for the last 40 years.
3) Encourage the creation of small businesses within a local ecosystem. This would also restore a sense of community and sow the seeds for a healthy quality of life. It would also restore governing power at the local level
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@nicole H: Sounds good to me. Which party do I support to make that happen? Sign me up.
4
Superb column.
Spotlights very clearly and effectively our second-worst problem, second only to climate change, which threatens survival of our civilization and species.
And to deal with climate change, we have to deal with the problem this column addresses.
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America, more than most nations, is a country of teams. We love our sports so much that we've modeled our politics after it.
When people go to McDonald's, or order from Amazon, it's more than just a consumer decision, it's a badge, a kind of allegiance.
And, we love a winner. People continue to believe that Jeff Bezos got to be the richest person in the solar system because he 'saves them time and money'. Yet more people than ever have no time and no money. It mind boggling! And as Mr. Wu persuasively shows, it's dangerous.
13
This is a very good piece, but money still rules the world and always has. We are seeing once again after a generation or two that people have forgotten the first hand lessons that their forebears understood after living through economic disaster and war. Our checks and balances are slowly being eroded by greed while the population is conveniently sidetracked on social issues and infighting. Everything is great until it isn't.
29
There are other areas, besides anti-trust laws, that affect the level of competition. These areas are very different today than they were in 1950. This means we can think about competition differently, but it also introduces new risks to the degree of competition. I will mention two of them.
International trade provides competition for domestic firms, forcing them to extract lower profits from American consumers and, to a lesser degree, pay enough that Americans in the industry will not go to other areas to work. On balance, this is ultimately not great for many American workers, but an absence of the extra competition might also not be great for most American workers, and would likely be far worse for consumers.
Retreating from trade, especially trade with other democracies, is a risk on many fronts.
Improved logistics also creates greater competition. If one "goes to the store" via the internet, a far smaller number of firms are necessary to create robust competition. One of the most concerning features of a "carbon tax" is the possible effect on domestic competition by limiting the movement of goods and workers. There are better ways to protect the environment.
Preserving robust competition in as many industries as possible is of paramount importance. The world of today is not the same as the world of 1950, and how we think about preserving competition throughout the economy likely needs to be updated.
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Part II
We must force the corporations to behave as good American citizens through comprehensive federal and state legislation. Since our federal government as presently constituted has been allowing the creation of mega-companies through mergers, we must force these new entities to behave as miniature political subdivisions with a charter charged with not merely increasing profits for the benefit of shareholders but advancing the interests of all other stakeholders the companies affect. We must force the corporations to pay living wages to their workers. We must force them to share corporate governance with workers to rein in the selfish impulses of corporate executives. We must force them to pay a steep price for shipping American jobs overseas to secure cheap labor. We must force them to help the local governments to preserve the communities surrounding their manufacturing plants and stores by contributing to the economic security of community members and complying with environmental regulations. If government takes these steps, Corporate America’s lurch toward bigness will actually turn into a net positive.
4
A frightening, but realistic portrayal of our current economic situation.
3
I would like to point out that unbridled capitalism is in the DNA of global warming, our existential crisis.
Why do we not have renewable energy as our primary source of electricity?
Why is clean convenient hydrogen power for transportation not practical because we "lack infrastructure"?
It would be far cheaper to give every American solar or hydrogen power sources for their homes and small businesses compared to the massive cost of elevating cities and armoring ports in a ruined world.
We have a government corrupted by campaign finance.
What will be our response?
It could be our Darwinian test.
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I'm trying to figure out what sort of distorted thinking leads to the conclusion that capitalism is the DNA of global warming. Nineteenth and twentieth century technology along with human nature (reluctance to sacrifice in the near term for gains in the long term, confirmation bias, not wanting to be the first one to give something up and possibly being played for a sucker) are responsible for global warming. Last time I checked, China wasn't a capitalist economy.
1
Part I
Salvation for our economy and ultimately our democracy lies in one of our political parties taking up the cause of the demos, the people, in rescuing our democracy from capture by Corporate America. While this awesome task should naturally fall to the Democratic Party, the inconvenient truth is that both of America’s major political parties, as well as our branches of government and to a large extent our fourth estate, the press, have already been captured by Corporate America. This is one of the primary reasons why the Democratic Party establishment has failed to tightly embrace the economic populist movement spearheaded by Vermont Senator Bernie Sanders. Hung up on the “socialist” tag and compromised by self-interest, the Democratic establishment has allowed the corporate elites and their supporters in the Republican Party to align this inequitable, pro-shareholder, anti-stakeholder capitalist economy with so much patriotic symbolism that it is difficult for any politician to challenge the economic status quo without appearing unacceptably radical. The Democrats must accept the challenge of saving America from the corporations because the Republicans cannot do so and the measures required to accomplish this task are in our Democratic DNA.
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I would also argue that being massive your staving off extinction. Small nimble laser focused companies are hammering the mega size firms. In this new economy the only constant is the rate of change and the rate of change is increasing everyday. Small nimble and fast growing firms are marketing major impacts. If you look at the legacy Telecom markets AVAYA field Chapter 11 because firms like Ring Central and 8x8 and others created the cloud base version and AVAYA did move fast enough. This is happening in so many industries. I agree with this article but what I would think about is how much times have change. Today it’s never been easier and cheaper to start a firm of disruption. To build it quickly and go after the mega firms. The acceptance of buying from firms you have never heard of and even relatively small is increasing as well. I would almost argue that a rebellion against the incumbent is happening at the bigs and really bigs are coming together for survival. I would say this article does bring up the fact the middle class is in need of a voice and organization that doesn’t exist today.
1
Someone in the Democratic Party needs to step forward and say that the battle is no longer between Capitalism and Socialism or any other economic system. The battle is in fact between Capitalism and Democracy. Walmart and Amazon lessen our Democracy, Comast and AT&T lessen our Democracy, Exxon Mobil lessens our Democracy. The question is, will anyone truly do this, considering the cost associated with running for office?
Bernie nibbled around the edges but didn't bring it home. It's not rich vs poor(everyone wants the ability to be rich) it large corporate vs Mom and Pop retail. Our society, Our Humanity is better with smaller producers and smaller retailers.
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This is an exceptional article—important not only because it calls attention to an under-appreciated problem, but also because it helps makes sense of the global swing toward right-wing authoritarianism.
I've begun to think that there are three phenomena that are driving Westerners to feel a lack of control over their lives and making them more susceptible to seeking a "saviour" in a strongman:
First, more than ever, people in the West are dependant on a steady and substantial cash income to survive. Particularly in the US, where the safety net is so weak, the need for a steady, well-paying job is critical.
Second, at the very time that a steady, substantial income has become so essential, incomes have become ever more tenuous. Increasingly, our employers are large, distantly controlled corporations (often Wu's monopolies). At any time a group of individuals in a far-off boardroom whom we have never met and who have never met us may make a decision that eradicates our job and leaves us financially devastated. We are almost completely dependant on an income over which we have almost no control.
Finally, the other support systems—family, local communities—that in the past could have helped us if our income dried up have disintegrated. Children and parents live far from each other. Many of us don't know our neighbours. Community is fleeting. We are increasingly isolated.
Dependent, isolated, and at the mercy of distant powers. No wonder there is so much fear.
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@617to416
This is a very astute comment, thank you.
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Yes, Mr. Wu, as your article says, "the threat to democracy posed by monopoly and excessive corporate concentration — what the Supreme Court justice Louis Brandeis called the “curse of bigness.” We must not forget the economic origins of fascism, lest we risk repeating the most calamitous error of the 20th century."
That is exactly what has happened on a global scale today. Corruption investigations are taking place around the world because the International Mafia went "mainstream" and took over stock markets around the world - their favorite craps tables.
The International Mafia has taken over communications of all kinds and using them to undermine governments around the world.
Meantime, most corporate pension plans were scrapped and employees with little experience were "allowed" to put their retirement funds into 401Ks - on the craps tables - instead. There was a sham "warning" that their money was not protected by OUR government but, hey, markets kept going up and up until they crashed in 2008 and many people lost one-half their retirement income and one-half the values of their homes. The International Mafia made out like the bandits they are because OUR loss is always their gain.
Unless average people want to lose it all again they will get their retirement money into safe IRA CDs in their local banks and/or reliable credit unions or safe U.S. Treasury funds with T. Rowe Price or another reputable firm.
WE THE PEOPLE must starve/stop them NOW.
19
There is an article in today's NY Times that the IRS has increased the amount workers can put into their 401K. More money for the International Mafia to steal.
Don't do it. Get it all out.
1
@njglea They increase it every year determined by average wages, etc. Since the average wage went up, so did this. Seems better to have the choice than not.
Actually, for years, it was not a set amount but a percentage of your pay. It was much more limited back then. I wish it had been the set amount all along...
2
@njglea
US Treasuries are certainly safe but unless you have a TON of money they return so little it will be hard to keep yourself fed. I don't consider Buffet or Bogle "Mafia" so that's where I'd go.
1
The rich want to become richer, or at least staying rich. They think that they have to control the so-called democratic governments. And they are right. How to stop them?
3
@Roland Berger
The not-rich vastly outnumber them. No amount of "security" will protect them, and they know it. They work the puppet-strings, hoping that nothing will set off the not-rich in large numbers, but they are not smart or lucky enough to keep that going forever. Eventually, the not-rich, by virtue of our numbers, will temporarily prevail, but it will be ugly and sad. In addition, the Earth itself is beginning to exact its revenge for their mistreatment, and the rich will not escape the coming cataclysm. Given many chances over the last 150 years to do the right things, the rich have always opted for the expedient, as long as it continued to enrich them. There will be a price to pay.
This is one of the best articles the NYTimes has published recently. We have multiple laws that prohibit combines, cartels, and trusts. Each was vigorously enforced for a few years (or decades) after passage. But due to judicial and political hostility, all were allowed to languish when the forces that brought about their passage changed their focus or were defeated at the polls.
This is a very common occurence with legislation. In the National Labor Relations Act, there is a statement of policy that encourages collective bargaining. In fact, most of the worker focused laws that are still on the books have been rendered spineless because of Republican antipathy.
The United States would be a much less unequal society if the laws already on the books were enforced.
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@vineyridge
An excellent comment on an outstanding article. What makes the situation worse is that the decline in unionization is virtually world-wide. The understandable but profoundly mistaken equation of Fascism with the murderous anti-Semitic maneuvers of the German variety--the reduction of Nazism to the Holocaust--obscures this dimension of reality.
11
Many are starting to connect the dots, finally. And essays such as this one help us to do so. Robert Kuttner, in his excellent book, "Can Democracy Survive Global Capitalism?" lays it all out parallel to the points made here. The fact is, global capitalism has essentially captured "democratic" governments across the globe. The case can be made that the invasion of Iraq, which set in motion the dislocations resulting in terrorism, mass immigration into Europe, increased frictions in the most unstable region of the world, etc., was demanded by capitalists. Likewise, the failure to quickly and adequately address climate change, evidence of which is being revealed in the suits against the likes of Exxon Mobil. And the masses suffer and have suffered under this regime for decades, resulting as we now see in the rise of demagogues in Europe and the US, and in fact across the planet. Is it too late to save ourselves? It would appear that it is, if only because we now have the technological capability to end life on this planet, but not the intelligence to use it instead to save it.
17
Mr. Wu's spot on perspective also reminds us of the dire need for campaign finance reform as at least one corrective to the pernicious influence of big money--oligarchic and/or corporate--on our politics.
I have written many times before that the single biggest legislative reform this country could make would be a banning of corporate/dark money support of campaigns and a very low limit (low three figures) on individual private donations to candidates. Election campaigns should be almost entirely (or entirely) publicly funded, with very strict laws about equivalent media access, as is the case in more sane nations (which also has the wonderful effect of shortening interminable election cycles).
If we could get that money out of the process, elected representatives might actually be able to spend time debating and legislating, rather than fundraising, and might actually be able to vote the interests of their constituents for a change.
Now, I don't know if this would be sufficient to stem the oligarchic fascist tide--perhaps not. But it would be a very important first step in an attempt to recreate a power balance, along with a renewed and strengthened role for unions, enforcement of antitrust regulations, re-establishment of the Fairness Doctrine, and the like. And all three of those would probably only be realizable if our campaign funding was so altered.
67
@Glenn Ribotsky This is the simple and only solution to halting this dangerous spiral in its tracks, or at least slowing it down considerably and changing the direction of this wave. Get money out of politics. Publicly financed elections ONLY with a clear time limit of a couple of months for campaigning, and clear and strict criminal punishment for any transgressors.
17
@Glenn Ribotsky
I’ve written about this as well. But these reforms cannot be legislative— easily reversed at the next reversal of power in Congress. They have to be constitutional.
This might not be as hard as many think. If each reform was structured as a single item, starting with a declaration that bans corporate donations and declares corporations NOT to be citizens, I think most Americans of both parties would support it.
(As an aside,why does no one ever remark that Citizens United directly contradicts “one man, one vote?” It means a stockholder gets more votes than a non stock-holding American!)
But if constitutional amendments were offered in discrete packages, I think most of us would support them. Then all we,d need to do is hold our politicians’ feet to the fire, and keep voting the naysayers out till we elect ones who’ll support each amendment. Would take years, but would save democracy.
11
@Glenn Ribotsky
What we have here is a CAMPAIGN -Industrial-complex.
We are in campaign mode ALL THE TIME...and that means lots of $$$ for the media, the lobbyists, the oligarchs, the think tanks, the polling businesses, etc.
Recall that the CEO of CBS gloatingly reported HUGE profits as a result of the billion dollar 2016 election cycle...& Trump was their golden goose.
Campaigning replaces governing and the american people become insignificant in the process. It is all in service to the "illusion" of democracy, call it grand guignol theater, perpetually putting Americans on that yellow brick road! That's entertainment, folks.
As with all empires, bread & circuses are the essential control mechanism.
11
Tim Wu has written the best description of why the word "fascism" keeps cropping up.
Fascism requires both the money men and authoritarians to be in lock step. And our corporations are global, not national entities, with fingers in every pie in many nations.
It used to be illegal to charge different prices for the same product to different retailers, and different customers. Yet that is the basis of our healthcare system and pharmaceutical distribution.
Predatory pricing for the purpose of expanding business and wiping out competition was illegal, but is also the basis of Amazon's expansion.
IBM was constrained by consent decree from bundling software; Microsoft expanded its monopoly doing exactly that.
We walked away from viewing consolidation as destabilizing, and embraced it, largely because the consolidators can buy a lot of politicians. And the result? Global sourcing has lowered prices, but lowered wages as well. Profiteering has raised the cost of healthcare to unaffordable levels, and products with price inelastic demand curves - cancer treatment, drugs that cure Hep C, emergency treatment for anaphylaxis and overdoes - have been allowed to rise to extortionate levels. And, of course, the movement to privatize public works - prisons, water supplies, infrastructure, military, traffic enforcement - has shifted power away from government and into private hands.
Corporatism is the underlying base that funds fascism, in a mutually beneficial manner.
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@Cathy "Predatory pricing for the purpose of expanding business and wiping out competition was illegal, but is also the basis of Amazon's expansion."
Hmm. Predatory *pricing* was the basis of Amazon's expansion? IMHExperience, I use Amazon with minimum regard to price because of the delivery to my doorstep--I'm 82 and use a walker. Similarly, catalogue/mail-order L.L. Bean covers me from top to toe except for the underpants which come from Amazon along with my Crocs, and the Lanz flannel nightgowns which come from the Vermont Country Store. Now that I can only read in large type on a huge Apple screen, even my books come from Amazon. It is an entire mystery to me why Eaton's and Sear's catalogues failed to go smoothly on line and disallow Amazon. If any vendor makes shopping easier than Amazon, I'm happy to transfer my custom!
8
The reason most Americans don’t care about new large mergers , is there is always one large company who has already taken advantage us through their size, think Comcast , Sysco, Verizon, to control pricing and margins. So when we here about a T-Mobile Sprint Merger it appears to us a “white knight” that will have the strength to fight the encumbent oligopolies and give us better pricing, service etc.
1
It will be a lot harder to break up Google or Facebook than the regional Bell and the geographical Standard Oil of the 1900s.
5
@pierre gendron So what? We can do hard things.
2
My reading of history is that the US of the 19th and 20th centuries tolerated (to a certain degree) companies that dominated within an industry, but not across multiple industries. It will be interesting to see if and when action is taken to reign in Amazon's growing ubiquity.
+1 on others' posts highlighting corporate "citizenship" and weakened labor unions as reasons for how we got back here. History is repeating itself.
13
Excellent, thoughtful writing. I'm reminded of similar arguments in Theodore Roszak's book 'The Making of a Counter Culture'. My own generation decried this 'bigness' starting in the 60s.
15
This is an extremely important point. One of the fundamental components of fascism is the merging of the corporation and the state. This merger has long been a staple of Republican politics.
The big corporations already own Congress. The Supreme Court has given them civil rights with Citizens United. The SP500 gets increasingly bigger while small shops disappear left and right.
Then, Republicans pass massive, irresponsible tax cuts that give corporations even more wealth and power and our deficits pile up because of it. They return the favor with big donations to politicians.
We are truly seeing the line separating corporations and the state being steadily erased by Republicans. Now add in the racism, the white nationalism, all topped with a big dose of fear and hate, and we have the makings of a truly fascist shift in Republican politics. Even scarier, is they now have their racist demagog dictator wannabe at the top. All the while, the Republicans turn a blind eye to his horrible behavior because they are making too much money. Sound familiar?
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@Bruce Rozenblit
This cannot only be attributed to republicans. Dems take the money too.
6
@Bruce Rozenblit
Wake up! Bill Clinton paved the way for the media consolidation we have now, 90% of ALL media in America is owned by 6 corporations due to the 1996 Telecommunications Act. The higher profile elected democrats have been in lock step with this agenda of consolidation ever since Clinton took control of the party.
23
@Bruce Rozenblit-- Citizens United!
17
Very important analysis; but as others have commented, the author's use of "we" to refer to us all as having some culpability in this may be a bit of hyperbole.
Between being granted constitutional rights of a living human being being, and gaining "free speech rights" under the recent Citizens United decision, the concentration of corporate power can be traced to legislative decisions. The "we" in these decisions are not of, by, and for the people, but the "we" is a powerful few.
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And it's bad economics, too. The essence of a market system is competition. Markets aren't really functioning unless they (like evolution) create variation and eliminate the less fit options.
Our current system isn't rigged to optimize our productive capacity; it' rigged to create rents.
70
This is a stirring call to action, not what one normally expects from the g detailed grind of antitrust work.
It also helps ground the sense of helplessness many feel, as the major powers that control our lives are not in our government, elected, but in conglomerates and massive corporations. However, we can push elected officials to do our bidding, refuse the big money supplied by different industries, or get out of office.
However, the control of media is so comprehensive that I fear the anger will continually be directed at the wrong targets, while those who have the most power sit back and let the common man struggle over the bits and pieces left over.
18
@cheryl
The control of media in just a very few entities is a big reason why the issue of business consolidation does not get more coverage and analysis; if those big media entities did so they'd be shooting their own selves in the foot.
11
@cherylthe biggest enemies of the market economy are the people running it.
2
This is the major effect of globalism i.e. to compete globally you continuously must add scale. China well understand this and restricts access to it's markets with non-tariff regulations while the rest of the world blithely turns it's head the other way so their companies can get some access. Google is a good current example...they cannot add scale in China using their USA platform. Japan understood this in the 60's to 80's in automobiles and consumer electronics. Look at GM and Ford today versus them!
Choose either globalism or smaller companies (with it's attendant barriers to outside goods and services) and appropriate antitrust laws for either regime.
7
A major factor that you omitted is the demise of independent labor unions. We once had three major players- labor unions to work on behalf of the welfare of its members, corporations to conduct business and the Federal Government to act as an arbitrator protecting the public good. Reagan argued that the government is the enemy and reduce taxes. The Supreme Court gave corporations unlimited power to influence our elections. Union membership has declined. Trump has almost returned us to a new Gilded Age with his appointments to the Cabinet and Federal offices. He has taken away regulations which give corporations more power. We no longer have a progressive tax system. Instead we have a tax system that benefits the wealthy and the corporations.
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@JAB
Unions have been greatly reduced even in RR construction in New York , as featured in NYT's article.
https://www.nytimes.com/2018/02/14/nyregion/railway-workers-lawsuit-discrimination.html
It all fits into 'Trump world' by reducing and eliminating unions that not only require a current wage level to counter inflation , but enforce modern work rules protecting health and safety of members and ensure high levels of skill among membership.
His documented history with non union labor , keeps workers fighting eachother and allowing owners like himself to avoid paying accepted union benefits.
He brought back the 1930's work place.
49
The character Arthur Jensen, to Howard Beale, in 1976's classic movie 'Network': "There is no America. There is no democracy. There is only IBM and ITT and AT&T and DuPont, Dow, Union Carbide, and Exxon."
Things haven't changed in over 40 years.
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@John Dyer
The only change is that we would now add Facebook to Jensen’s list, yielding the military-industrial-Facebook complex. Thanks for mentioning Network, the major film essential to an understanding of the present debacle.
29
@John Dyer
The change is Citizens United which gave corporations unlimited power.
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Excellent article. I will take small exception to the point that "We have chosen to weaken the laws...." Specifically, I am not sure when the "we" popped into the process. Some people definitely did make that choice, but neither I nor the vast majority of Americans were a party to it. Rather, the decision flowed from power "bigness" in government where our "elected" elites in partnership with their economic elites made the decision. As a matter of fact we can watch it continue to play out via via the Dodd-Frank repeal effort.
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@PJM
Agreed that we the people didn't "make that choice" but we the people certainly support these moves to bigness with our consumer choices. We "Amazon", we "Walmart", we shop for the savings of a buck or two on phone and internet despite knowing we are supporting consolidation everywhere in our lives. It would take drastic action on the part of we the people - local purchases, general strikes, boycotts - to influence the decision makers but it can be done. So long as we the people buy into the decision makers choices through our consumer actions, we are fully complicit.
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This is a correct summary - and is actually right out of "a Road to Serfdom". That being that a concentration of political power (in the form of too big government) and a concentration of economic power (in the form of too big corporations and/or oligarchy) leads to collectivism and totalitarianism. Which in turn leads to reduced personal freedoms and liberties.
We are well on this Road given our Military Industrial Complex, Health Care Industrial Complex, Education Industrial Complex, and now our Media Industrial Complex.
Will probably take a Libertarian Teddy Roosevelt to bust it all up. Or perhaps being Serfs is not so bad. We will see.
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@Peter W Hartranft
Pres. Eisenhower , one of our most honored generals, did advise us to be wary of the military industrial compact. We did not listen , so hence the war in Vietnam and all the others that followed. Too many American veterans died and were wounded so these oligarchs could feather their own nests. It's time to stop the mega merchants to stop running and ruining our democracy . One by one they are taking away our civil rights and now the war against the press and reporters to stop their right to investigate the politics of today.
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@Peter W Hartranft
If only Hayek had taken his own advice. He had no difficulty supporting Pinochet - support which included a green light to torture. Hayek wrote numerous times that totalitarian government may be necessary at times when democracy (ie what he considered rejection of appropriate corporate power) no longer worked.
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@Peter W Hartranft
Teddy Roosevelt was no Libertarian. He was a Progressive who wanted to strengthen the Executive branch and, for awhile, even supported the recall of SCOTUS decisions by voters. You can have Hayek--but not Roosevelt.
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The "people" are often seduced with the idea that "what's good for the company is good for America", or, "We want the country to be run like a business", or "We want a President who acts like a CEO." The reality is that "Business" has only one real goal, and that is accumulation of shareholder wealth... not the good of the people, not a safe environment, not workers rights, not even Democracy. These are the purview of civic minded leaders who "govern for the people" and implement laws and regulations to harness rampant capitalism. The "Anti-regulation craze of the GOP is sorely misplaced.
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@Steve Burton: Great point. It's likely Mr. Wu used the word "WE" is because like most of us he is laboring under he assumption that America is still a participatory democracy. Where are the bold leaders when we need them?
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@Richard Winkler-------------------"Where are the bold leaders when we need them?" Well, since you ask, Bernie and Elizabeth W. are right there, waiting.
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The author is largely correct, but it is blood that greases the wheels of history and those wheels are, after 73 years, starting to move again. The path to fascism and conflict has been taken for manifold reasons, and as the memories of war fade a new generation will, by accident or design, trigger the next conflagration.
It is inevitable. Future governments will be under enormous pressure from climate change, mass migration, starvation and economic chaos. Add to that all the factors the author mentioned, plus religious conflict as well as all pre-existing adversarial relationships, and the roadmap to disaster looks pretty clear.
Now while I personally believe Calvin Coolidge was correct when he observed that if you see ten troubles coming down the road toward you that nine of them will derail before reaching you, all it will take is that one in this case.
A dark age is coming.
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...and this "bigness" has been helped along by both parties, so it will be HUGE challenge to break it up.
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it needs to be emphasized that 'bigness' is a result of crony-capitalism and NOT free-market capitalism. just as the robber barons of yesteryear operated in cahoots with the government to establish their monopolistic positions (this is pointed out by 'left-wing' historians such as Gabriel Kolko). and finally, recognize the the biggest monopolist of all is the government itself which gives itself the power to write and enforce laws. the free-market operating without govern,ent intervention is the ultimate and best creator of both economic and social diversity.
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@Richard Gaylord: "the free-market operating without govern,ent intervention is the ultimate and best creator of both economic and social diversity." Completely wrong. The endpoint of unrestricted capitalism is rule by an increasingly concentrated group of oligarchs heading up large corporations, who break the law with impunity because it gives them greater profits. The role of government, at least in a democratic society, is to set limits on the otherwise overwhelming power of money, and to represent concerns of citizens that are not (or should not be) connected with making a profit — like clean air and water, provision of health care, maintenance of infrastructure, preservation of free speech, and administration of justice.
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@Richard Gaylord
Ah, one of the ubiquitous “no-true-Scotsman” defenses of far right libertarianism.
Hayek wrote about the dangers of BOTH economic concentration AND political concentration, but his followers only remember the 2nd part.
However, Hayek himself, in practice, was perfectly happy with the 2nd part, for example, his encouragement of “temporary” totalitarianism (and excuse of torture) in Pinochet’s Chile.
Yogi Berra had Hayek’s number: “In theory, there’s no difference between theory and practice, but in practice, there is.”
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The Great Recession is only the most recent counter-example to this Neo-liberal argument. Read Robert Kuttner's Everything for Sale.
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Thank you! Your perspective is rarely voiced . Enforcement of antitrust rules has collapsed since the advent of the Reagan era and the ascendance of laissez faire economics. These trends continued unabated through the 90s and even gained steam in the Clinton era and certainly during the Bush years. There was something of a pause during the Obama era but its hard to imagine a Republican administration that would have any interest in preventing any merger no matter how anti-competitive. Increased industrial concentration has no doubt contributed to the phenomena off runaway increases in income inequality, stagnant productivity growth and arguably to corruption in politics.
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While the monopolies and cartels have changed, as reflected in the technology advances that have disrupted those industries of the '50s and '60s, let us not forget the cartels that are having significant detrimental impact on the future of our country and the world, the petroleum industry. They have fought any attempt to regulate greenhouse gas emissions, and almost all have no idea how to energy companies, but just oil companies. Some mouth a good game with respect to climate change, but they are reactive by nature, and will only change with strong regulation. The impacts of climate change have so many diverse and adverse impacts on the world, that this big industry is potential an existential threat.
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My guess is it is to late for this to change even should the people of this country not like it we are global, any pressure to bust this up would only mean they would move there headquarters to some friendly location for the short term and wait it out until they can get there people in to change it. Just look at tax evasion money in off shore accounts now that they are in first thing change the tax laws cut taxes then bring it back in and monopolize more. One needs to look no further than our new Supreme court total large corporation friendly.
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The article is off base. What happened in the 1930's was much more complicated and was the result of many influences including the gutting of Germany at the end of WWI.
Monopolies and Cartels are dangerous to the health of society. Today's most dangerous are not the same one's of yesteryear Think what Google, Twitter and Facebook are doing to USA free speech. They are closing off one spectrum of the political debate and favoring their choice only. They are willing to work with governments they like, China, to limit citizens ability to freedom of thought. In order for society to grow, learn and adjust, all voices need to be heard - no matter how angry or lopsided they are.
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@jim: Good point about today's oligopolistic social media giants' ham-handed censorship of politically incorrect opinions both here and in China. That contributes to a common belief that the liberal democratic order is unresponsive to the concerns of many ordinary citizens. In the US, they are resorting to a crude authoritarian leader like Donald Trump.
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@jim - remember that corporations are "people" now and can jump into partisan politics on either side expressing whatever political opinions they wish. Google et. al. are not "closing off" free speech, they are simply taking sides - that's the same right that you have. Professor Wu's point is that it's the size of the companies that allows them to dominate the conversation and everything else.
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Thank you, Mr. Wu. This is one of the most interesting and important OpEd pieces I've read lately.
I admit to being frightened by the many signs of the U.S. and E.U. moving towards the very horrific conditions that brought the world to war in the late 1930s and first half of the '40s.
The Golden Rule - Do unto others as you would have them do unto you.
Love your neighbors. And buy local!
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@Cindy
Buy local starts in the macro, your neighborhood, then your town, then your county, state, nation. Every dollar spent locally takes away from the walmart. affect. Granted there are areas where the only option left is the hungry juggernaut Walmart and now Walmart is abandoning communities that don`t live up to their profitability spread sheet, so yes, buy local while you can, before the only way we get our food is when it drops from the sky via Amazon.
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Monopolies and oligopolies are much harder to achieve in goods than services. Goods are created in a global economy while services tend to be more domestic. Health and telecom providers are among the best examples of domestic service oligopolies, where Americans pay much more than people in other countries. But there are effective regulatory solutions, such as existing price controls by Medicare on fees allowed by procedure, introduced by Reagan.
For goods like pharmaceuticals, we are simply the victims of massive lobbying which fights against the use of government leverage as the largest Pharma buyer, in price negotiations. Candidates willing to forego Pharma campaign contributions are rare today in both parties. So this would have to change. And then there is dark money.
It seems unlikely that leadership will emerge from a highly compromised Congress on this. The Trump Administration has proposed a trial program, ironically under the enabling laws of the Affordable Care Act, but only for a narrow group of Part B hospital infused drugs. So I am not holding my breath for a big change in direction, other than up, as in ever higher prices.
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The author's analogy between monopoly and totalitarism of a century ago and nowadays is failing.
The run for monopoly- building was very high during 80s, and again after the big depression ( with some arising conglomerate in between ), under president Obama, who had access to almost all the big companies' CEOs of East Coast ( the more prone to use their billions to acquire smaller company, see Facebook, Google, Yahoo, Apple and so on ), who were and are his friends ( to the point he is working with Netflix, a "bigness" streaming industry, right now ).
I doubt anyone would call out mr. Obama for his dismissing actions toward the mounting monopoly. His saying was "more to the people's hopes" mirroring and promoting that of a famous social media company. There was no upheaval, no protest, no disconcerning op-ed on the nytimes ( not even for the amazing hegemony reached by Conde Nest company in publishing sector ).
To link that massive concentration of companies to some actual authoritarisms is misleading, blatantly untimed and not even a correlated observation.
Hungary, Poland are both within the EU which is reining in their nationalism, Brasil's noteworthy merger of its beverage "bigness" AmBev happened before Bolsonaro election, and in the USA Trump has antagonized probably every single CEO.
Finally, the middle class had its chance, twice, to put its political weight on such economics policies, in 2012 and 2016 by voting.
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@Alex p: So perhaps you're correct about Obama. Does it matter? There really is no question that establishment Democrats, especially Bill Clinton, have contributed to this disaster. The question for all of us (not just so-called liberals) is: Do we allow this concentration of corporate power to continue or will we find a strong moral leader to bring it to the attention of the citizenry and do something. This is a non-partisan issue.
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@Richard Winkler - Clinton, B, was the best (R)epublican president in my lifetime.
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There'll never be another Theodore Roosevelt who will stand up to big consolidation. In a dystopian future, the world will be at the mercy of not big businesses, but global businesses.
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I beg to differ, Zu367. Senator Elizabeth Warren is doing an outstanding job of taking on the International Mafia Robber Barons as are billionaires like Tom Steyer.
All WE THE PEOPLE have to do is put them in power and NOW is the time.
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