The internet, radio, TV - these are public utilities. The public has a right to demand that monopoly companies not only pay to use these utilities, but they behave fairly towards the public. In an era where we are looking for funding for our infrastructure, trying to beat back big problems like global warming, and poisoned by divisive and biased cable TV "opinion" segments, it's time to make these companies pay for their access and present a fair picture of the facts.
5
Big is bad.
Couple questions spring to mind: First, all well and good that a President would move against the "trusts," but, as Trump has learned the hard way, the bully pulpit is an overrated Presidential power. So the issue will be--how to get an elite governing class moving against its own interests? Don't kid yourself; when a big company is threatened, it will fight like a cornered rat. It can buy Washington DC, and it will, if it hasn't got it locked up already.
Second, unraveling the super-concentration of market-power will take years (see: Microsoft, AT&T...they're still in business and bigger than ever after huge, endless lawsuits. Even the grand-daddy of all busted trusts, Standard Oil, is back bigger than ever. Exxon, anyone?)
Meanwhile, the Senate has been busy-busy loading the federal judiciary with fully-vetted Federalist Society clones; think they'll hand down business-unfriendly decisions?
The problem with Sen. Warren's pitchis that her proposed solution is, paradoxically, just as big (therefore unwieldy, loaded with unforeseen consequences) as the businesses she seeks to spank. It probably won't get many votes from overheated Democratic primary voters, but the real task will be to start an asymmetric attack on these bloated enterprises--find pockets of weakness, attack, change course, attack, keep turning the screws. Think: Viet Cong, 1969...
3
Break them up! That includes entertainment, news and media conglonerates.
3
Agree that antitrust, aka market power, should be an important issue in our governance strategies.
I have a simple idea to offer: a business cannot buy a competing business. Period.
Combined with prices "telling the truth" about social and environmental negative externalities/impacts of the lifecycle of products, and radical transparency, and incentives for worker (non-managerial) ownership of corporations, we could progress towards a sustainable capitalism.
Please remember all this discussion might be for naught since it most likely will be decided by the courts, like so many issues. Which is one of the reasons why who appoints the judges is so important.
People’s peaceful “Political Revolution Against Empire”.
Bernie will link the concepts of 1776 to 2020.
1
I would like to see anti-trust oversight return to where it were before Reagan began privatizing and deregulating e erything in sight. His retrograde, competition-strangling strategies sent consumer prices soaring as part of a supposed "free market" strategy that was anything but, a bill of goods that included such discredited policies as trickle-down economics and the relaxing of scrutiny on mergers. Deregulation got even worse under Clinton, giving birth to a government-encouraged "creative accounting" economy (think Enron, Worldcom) in which speculative nano-trading substituted for the providing of actual goods and services. Under Bush II, that big Ponzi scheme (rooted not in the market for actual housing but in the selling and reselling of debt) brought down our economy, and the developed world's with it. The eight years leading up to Trump were spent digging us out of that sinkhole.
Corporations and conglomerates are relatively recent inventions. Corporate tax breaks were intended to encourage private development of public infrastructure (like railroads) and other projects that, in the government's view, served the greater public interest.
In today's Gilded Age, Americans pay more for less in all manner of markets, from health care to technology. Consumers are coughing up outrageous premiums to finance bloated executive salaries. The only people who benefit from mega-corporations and monopolies are those at the top.
3
Antitrust measures are necessary.
But the services provided to the public by Facebook & Google, ostensibly & in reality free for most people, are immense. I don't use Facebook, but 2+billions regularly use it, and enjoy it, which can't be discounted.
Perhaps, govts. around the world ought to spend money on behalf of their citizenry, and employ a small army of geeks to monitor the misuse of Facebook and promptly curb such misuses.
The same can apply to Google also. I use google around 20 times a day. The benefit I get out of it is priceless. I am willing to pay for google services, if I can afford, several $hundred a month. Most people can't afford it. If it's required, I would somehow manage to pay. I would add, until Google went public & began to make tons of money, I thought the federal govt should financially support Google, like supporting PBS & NPR.
We shall not dwell only on the negative sides of Facebook & Google, and see them as enemies of humanity.
Facebook & Google aren't like GM, Standard Oil, et al., which colluded & destroyed clean efficient public transit system in smaller towns & most cities across America, starting in 1930s. Now Manhattan is well-serviced by mass transit.
Imagine, such services were available in all cities & towns across the country and that there existed a good network linking most communities, what a blessing it would have been!
The principal culprit GM, having been the world's largest corporation for decades went bankrupt, no less.
1
Having read this article and your piece on the oppression of supermajorities, I feel like you've read my mind or at least listened in on my dinnertime rants. Great work.
I think a focus on anti-trust matters and breaking up huge tech companies is unlikely galvanize the Democratic base.
As a lifelong Democrat I am truly afraid that the extreme left wing of the Democratic Party is pushing us into another 4 years of Trump.
Look at all the reasons Bernie Sanders, Ocasio-Cortez and their merry band of socialist Congresspersons (and quite a few announced Democratic Presidential candidates) are giving the electorate to vote for Trump in 2020: free Medicare for all, free college for all, confiscatory taxes, open borders, late-term abortions, anti-Semitism, a Green New Deal, reparations, the list goes on and on.
The ultra-left Democrats (socialists) seem to think that those in fly-over land (and quite on few on the elite coasts) are dumb as a stump, and won't realize that these pie-in-the-sky opium dreams are fiscally and politically impossible.
Isn't it time we should all admit that "progressive" really means "socialist?" And, as Margaret Thatcher so aptly put it, "The problem with socialism is that sooner or later you run out of other people's money."
Multi-millionaire Bernie Sanders has made an expedient pledge to run as a Democrat, thus almost masking his true socialist identity and intentions. The old-guard Democratic leaders (the really old ones, you know who I mean) seem totally flummoxed by the likes of Ocasio-Cortez.
I sincerely hope the moderates can take back of our party's platform and return the Presidency to the Democrats.
If all you have is a hammer, every problem gets treated like a nail
Yes, the big tech companies have enormous impact on our lives, but it is not at all obvious that they are monopolies as a matter of law, or that the traditional methods of dealing with monopolies - divestiture, breaking up into smaller units, fines - would be at all practical or have any positive effect.
To cite one of Ms. Warren's examples: Apple both creates its own products and sells them in its own retail stores. Aha, monopolistic practice! Not so fast. Apple is not the exclusive retailer for any of its products, and sells only a small percentage of its popular products - iPhones and iPads - in its own stores. What the stores do for Apple is provide a desirable retail outlet for its Mac computers, which have a less than 7% market share and would otherwise be relegated to dim corners of big box stores.
In what way is Google a monopoly? It is certainly not the only search engine available, or the only search engine offered by a large tech company, e.g., Microsoft's Bing. Google is the most popular search engine only because it produces the best results for its billions of users. If a significantly better search engine appeared tomorrow and Google couldn't match its results in a few months, Google would fade away. Ask the makers of Yahoo search and Alta Vista.
1
NYT: Thank you for giving us more insight into the positions of presidential candidates, as opposed to just horse races and sensationalism as in 2016. But please don't limit the information only to candidates who are Senators. Even if in an accompanying story, we need to know where the other candidates stand on these issues as well, else you bias the field.
1
The central issue of the 2020 campaign must be Trump's unworthiness and treachery as the cheating occupant of the oval office. Anything else is distraction.
1
What a shame we can't meld Bernie, Liz, Joe and Kamala.
1
Anti-trust enforcement is even more broken under the Trump administration. It has become a tool to reward cronies while punish political enemies. Sometimes it is just crass old quid pro quo. Right now (finally,) there is a lot of inquiry in Congress about T-Mobile management's staying at Trump hotels while paying what appears to be above-market rates for a similar hotel room.
1
Yes! It should be THE issue!
2
Antitrust: an important issue.
However, it's just one of many "important" issues that dominate the national conversation in that frothy drama the media serves us each day.
Meanwhile, the real issue is the domination of politics by MONEY.
And to deal with that we have to make two fundamental changes: 1) end all private and corporate contributions to federal election campaigns, and fund those campaigns with public money (overturning Citizens United is not enough); and 2) replace the federal income tax system with a simple, transparent flat tax on consumption, by which we would eliminate lobbying and graft in Congress over creation and/or revision of income tax law.
Campaign contributions and tax manipulation are the two silent vampires draining the blood and power out of the concept of "one-man-one-vote" in the United States. Until rank-and-file voters regain some of that power, Congress and the 1% will parade the "froth" in front of us while they control the outcomes of issues behind closed doors.
1
Free markets can be destroyed by capitalism. This is a central reason we need government; to regulate capitalism and nand not let monopolies and oligopolies take control.
‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices.’ (Adam Smith, The Wealth of Nations, 1776).
What does the American auto industry, the health care industry, wall street firms and the banking industry and now high tech all have in common; other than they were all on the brink of failure?
These are industries where the production side of the industry is no longer a free market with many producers competing head-to head to earn the business of consumers, or customers, of the industry. Instead each of these industries are controlled by a relatively small number of very large corporations that have transformed these markets into oligopolies. .... http://lstrn.us/1Yds8eo
2
It's no coincidence that the last time America called for antitrust laws was the period of the Robber Baron Era, and that we are experiencing a 21st century reprise of that era. Too much wealth and power was concentrated in too few hands then, as it is now. Then it gave rise to anti-capitalist movements like communism and the Worker's Party. Teddy Roosevelt's trust busting actually did capitalists a huge favor by taking much of the steam out of the widespread anger of the working class and poor that might've led to an American Bolshevism.
But Americans aren't inclined towards communism, they believe in the theory of capitalism of allowing people to reap what their labor and ingenuity produces. However, they also believe in fairness, and of not being taken advantage of, and that's exactly what's been happening ever since Reaganism was established. Demonizing government, the only entity big enough to counterbalance the power of great wealth, enabled the New Robber Baron Era to be resurrected, and with it the renewed assault on the working and middle class and poor. It is time once again to "break up the Trusts!", and to re-establish "capitalism with a conscience", a system that works for everyone, not just the 1% and Corporate America. If we don't, the biggest losers will be the Robber Barons themselves, as happens when the masses are suppressed and taken advantage of for too long.
There can be an American Spring too.
2
the problem is not an US issue, is a global issue. we have multinational global corporations with tremendous power and influence. by break up the largest US tech companies, all we are doing is creating space for foreign tech companies to take their place, esp the up and coming chinese global tech companies that are fiercely investing in AI, blockchain, etc technologies of the future. Unless the world nations agree on breaking up all large tech companies of the world (the chinese govt is doing the opposite) I would fear a chinese global tech company much more than a google, apple, msft, amazon.
1
Gigantic companies have never been very good at developing fundamental tech, at least not since the 70s. Add this to the reinforcement of Marxism-Leninism and state control of companies and credit by Xi Jinping, and I think you'll see the rate of Chinese progress decline, absent any gains from espionage.
Although the monopoly question is certainly serious, anyone who thinks monopolies should be "the central issue" of the 2020 election is just plum expletively laden out of his mind.
This is "my turf" parochialism at its very worst. Monopoly experts think monopolies are the biggest problems. Medical people think medicine is. Climatologists think climatology and climate change is. Unemployed people think jobs are. Homeless people think homelessness is. Consumerists think some aspect of consumerism or consumer protection is. Fundamentalists think atheism is. Farmers think it's urbanites. Trumpsters think it's ... well, who knows what those people think, if "think" is used informally and colloquially.
The "central issue" couldn't possibly, in a thousand years, be more obvious. Come on, Tim.
The democratic process may need to decide what we mean by monopoly - i.e. how do we decide when a company has become too big (or a company would become too big after a merger) and warrants a break up or blocking of a proposed merger.
Perhaps consumer welfare is not the only appropriate metric of market concentration.
But we need to decide on the appropriate metrics and then apply them evenly and objectively to all companies in a technocratic way when enforcing the policies. We should not have separate policies for different industries.
2
Washington needs to look at two more big corporations in two other industries that have a stranglehold on wage control: Wal-Mart in the retail industry and McDonald's in fast food. Wages do not move in either of these industries, at least in Michigan, until Wal-Mart or McDonald's increase THEIR wages. They control the wages because they employee the highest number of employees in their respective industries. In fact, Wal-Mart is the 2nd highest employer in the country, the Fed Gov being the first.
Why is a large corporation like Wal-Mart allowed to control wages? Because our Congress is WEAK and GREEDY for donation money they need to keep their job! Break up Wal-Mart. Pass a law that REQUIRES all large corporations to employ X amount of full-time workers, pay them a living wage according to the area the store is located in, AND offer them affordable benefits. Wal-Mart (i.e. the Dalton family REFUSES to pay a living age or offer full-time work to most of their workers. Instead, THEIR employees are forced to go to the government for welfare benefits to cover their basic needs. The Waltons are disgustingly rich. The can afford to PAY their workers. They CHOOSE to force their employees to get help from the government.
As corporations have become more powerful, they have taken more and more away from US. It is DISGUSTING. 75% of Americans are struggling to survive now. What more do they want? What more is there to take from us? When will they have ENOUGH??
5
It's obvious by now, except to those who do not want to see, the political and financial portions of our system have passed into the hands of the wealthy. Since 1970 wages in the US have stagnated while the income of the top 1% has gone up 250 %. Labor unions have been deliberately destroyed.
If a candidate fails to address those facts, what world is he living in, and what changes can he be expected to make?
4
Anti-trust is only part of the problem with corporate power.
The larger issue is the fact that corporations have, through a long series of Supreme Court decisions, acquired civil rights such as free speech and religious practice. They use these acquired rights to lobby -- many would say purchase -- politicians for favorable treatment. One such treatment is anti-trust immunity. Others include spending unlimited money on elections.
I have no problems with companies getting big by being the best at what they do, as long as they comply with anti-trust laws. I have severe problems with companies corrupting our political system.
Corporations should have certain commercial rights - contracts, access to the courts for disputes, and so on. But not civil rights. That's going to require a constitutional amendment to prevent the Supreme Court from granting them.
8
I agree with you, but first things first. We absolutely must undo the crazy Citizens United decision by the out of touch Supreme Court. This monstrous decision must be pulled out by its roots. We can focus on other matters after that, but that decision must be eradicated first!
The "Chicago school", Friedman, Posner et al, led the way with full blown attacks in the 60s and 70s on antitrust doctrines then in place. And it is undeniable that many of those doctrines were nonsensical, parroted by judges who felts constrained, in large part, by the fact that the doctrines were deemed to be "per se" violations as to which economic impact evidence was said to be irrelevant.
The demise of per se violations was obviously a much-needed reform. But the tilt in the other direction has been massive and ill-advised: evidence of grotesque anti-competitive conduct (Microsoft tying arrangements in the 1980s-1990s; Google blatant price discrimination to advertisers; Facebook - don't even get me started) goes unchallenged, and hence unpunished. Even Microsoft got a free pass with Dick Cheney's post-conviction gift in the form of a tap-on-the-wrist fine.
The proffered excuse is that all markets are now "global" so grotesque misconduct in the U.S. market enables our tech behemoths to gain world - wide market share. Maybe so, but to what benefit if all the jobs are overseas and all the profits are kept overseas and none of these mega=companies pays any taxes?
Thank God for the EU, which at least blasts them with multi-billion dollar fines occasionally, tho like any other restraint the behemoths fight it for years and ultimately settle for piddling reforms after the the cancerous technology has invaded new organs where the old conduct is outdated.
2
A quick look at the dividing line most important to this "monopoly" question and how to deal with it. All Republicans are taking money from business. A great many Democrats are taking money from business. The line between those taking money from businesses and those who are not is the defining attribute, not political affiliation. Therefore, since that line actually falls across the Democratic Party I would propose that line become the demarcation line within the Democratic Party going forward. Any Democrat taking money from business is not going to be supporting any changes to the status quo of supply line streamlining and stifling of competition. They simply cannot bite the hand that feeds them. This dichotomy is most dangerous in that climate change is coming. Capitalism is not the way to address climate change. We must attempt to save this planet for all of us not just the rich. Monopolies are a result of unfettered capitalism historically as we can see right now in our rather ripe state of only barely Democratic Oligarchy. Breaking these up could have been done with existing law under Obama but very pointedly was not. Any platform from the Democrats should define this line I described in the form of a plan to either remove Citizens United or render it moot with strong legislation. Establishing this litmus test for the Democratic Party will serve to unite the constituents by economics and blunt the use of "identity" to divide. The money is the difference on the left.
3
I agree that monopoly power should be a central campaign issue, the but even above that should be policies that address income and wealth disparity (what many people call "inequality"), heath care costs, college debt, early childhood care and parental leave. Not to mention climate change and America's heavily bloated military budget. The people want policies that will help free them from the tyranny of health care and college costs, and flat wages.
2
I think that the challenge is understanding three intracting dichotomies. One is the blurry boundary between innovation and monopolization. Another is how the value of both of those are shared with workers vs higher end owner employers and third is how that positions us against world competition. I think solving those will be extremely difficult to do correctly and sustainably..
Today's world requires that we do't encourage monopolization, worker hardships, and foreign superiority respectively. I think is a great issue for DemocratSSSS, not one Democrat to take the lead. There are many tax laws that are harmful and if we focus on those rather than the hype about "soak the rich" we can demonstrate thoughtfulness rather than knee jerk, simplistic, uninformed responses.
In today's and tomorrow's world we face rapid change, decreased prices from competitive economies and in a democracy we can't afford to swing the pendulum right and left every two years to get polarized things done while the world moves ahead.
Long lasting, widely supported tax reform is the best way to address these changes that we don't anticipate. Our tax laws should not punish work or innovation, should not encourage finding loophole, should transfer some of the costs of globalization to companies that benefit and/or cut jobs, not allow housing costs to soar to eat up income and provide the illusion of saving AND missing from GOP proposals, help trim the deficit with growth in economy. Dems will win.
@Wayne
e. Corporate rates go back up to previous level with drop to ½ way between that and prevailing int’l rate including VAT over 5 yrs.
i. Drop to 3% above that rate now if interest deductions are not taken otherwise phased out over 5 yrs
ii. Drop to =rate or a little above or below if median and below employees own 10% of shares and enough shares to own shares worth at least 1 yrs salary by 5 yrs the cost of those shares deductible and not taxed
f. Income tax rates drops about ½ except at highest incomes
2. Lower interest rates- very high based upon foreign competition and spreads between consumer borrowing and consumer interest rates
a. No tax on interest phased in.
b. No deductibility of interest phased in. Mortgages can be provided by government to drop to 2% for 7 yrs assumable. Banks could take over loans only if they offer to everybody with existing mortgages. Higher income people would pay their same payment but more would go to equity to help fund. Also give every adult 25 and up $10000 credit over 2 yrs to use toward equity, home purchase with 20% down, starting business, or getting adult education.
c. FDIC insurance to belong to the depositor up to $100K, not to the bank unless they offer accounts for only treasury deposits.
d. Banks must report their balance statement based upon ability to collect.
3. This way corporations would at least share their benefits and tax breaks would go more to companies that break up.
4. I think many of these things were proposed by conservatives but without the safeguards. Definitely not an antibusiness stance. Democrats could wipe up
@Wayne
Some things to consider.
The low tax rate and nothing for nothing by Democrats.
1. Lower all tax rates except Federal income tax on those over $1 m or somewhere in that range
a. Payroll tax drops to 2-3% but on all income and for employers
b. Sales tax on all purchases(including service and retail) with exemption for employers for the salaries or median employee salary x # employees and for individuals for the median personal income subsidized at that rate for purchase of locally produced food.
c. Wealth tax of 1% on all assets of corporation yearly again above the median salary x 4 x # employees. On individuals above the median US hoe price. That tax would go all or in part to local communities provided they abide by GAAT and declare their unfunded liabilities.
d. CGT would start at regular income tax and drop every year up to ?5 yrs to zero to compensate and to encourage long term investment.
i. Exception is high shareholding officers leaving would get withheld at 50% dropping 10% per year repaid based upon the then value of shares down ultimately to zero after 5 yrs or 0
Each of the five examples of dominant tech companies cited by the author; Facebook, Google, Amazon, Apple and Microsoft, are US companies. What happens to US competitiveness if these companies are broken up?
Robert Reich's book "Saving Capitalism (For the Many, Not the Few)" has an excellent chapter on the terrible outcomes from monopoly power.
4
Instead of “lock her up” our chant should be “break them up”.
No single company should have more than a 30% market share, and no two companies should have more than 50%.
4
The highest priority is the break up of the GOP. Unlikely, I know. But necessary.
The GOP is the face of American INEQUALITY.
The U.S. is the most unequal of advanced democracies.
Gop economics has created thousands of billionaires and millions of homeless.
BUT, yes, inequality is not the only nor the greatest problem.
e.g. I just tried to google "How many homeless in U.S.? I got a dozen bogus responses lying that they will answer my question. "Please click on me!"
None of our problems will be adequately address by Republicans.
4
Power in large corporations isn't the only thing that needs to be checked. The growth of the power of the presidency itself also needs to be reigned in.
Since FDR and probably even more so since the 60s, the power exerted by the president has exceeded that of what was intended by the framers of the Constitution. The balance of power between the three branches needs to be restored. The president's job is to PRESIDE over the nation. That why he was given the title, PRESIDEnt. The office of the president needs to be put back in it's box, and the nation itself needs to stop focusing so obsessively on the one individual who occupies the office.
I'm not holding my breath, but I'm looking for the candidate, from either party or from the outside, who states that he/she will work with Congress to put in place legislation that limits and alters some, of the power that more recent presidents have abused.
5
Mr. Wu although I agree with your conclusions I feel that anti-trust is preceded needs to be accomplished in conjunction with major campaign finance reform. It is hard to imagine effective anti-trust legislation and enforcement without first addressing the abuses of current campaign financing and the Citizens United decision.
6
With each accumulating revelation of where Joe Biden has stood on important issues, here antitrust policy, he sounds more and more like an establishment Republican, well out of the thinking of the majority of present day Democrats and Independents. His time to successfully compete in presidential politics has come and gone. He has had a largely distinguished public career, which he deserves to be very proud of. He is not, however, electorally viable in 2020 to be the Democratic presidential nominee.
4
While monopolies are a huge problem, THE central problem facing us all is climate change. That must be the focus of the campaigns. The candidates must make it clear we have a closing window to act. The alternative is chaos.
3
I agree by about the proliferation of monopolies, and how they are harmful to consumers in general. But I have several reservations about this article.
I use Facebook, and if it were not ubiquitous, I would have trouble accessing the community of friends I have. I value being able to keep up with the lives of friends and family, who are scattered far and wide, and the ability to share what’s happening in my corner of the world, beyond an annual Christmas letter.
The issue, IMO, is in regulation. I use FB under protest because of their amassing personal data. I don’t use their apps because that allows FB to access my entire contact list. Instead, I use a browser on my phone.
Perhaps the answer is to treat certain areas of industry as public utilities and regulate them accordingly. I knew at the time of the break up of Ma Bell, despite claims to the opposite, that the price of communications would rise. Of course, that is exactly what happened. We still have monopolies, but now they simply are privately owned.
2
This was the issue between Wilson and Roosevelt in 1912: break up the monopolies or regulate them? Wilson won but effectively they went with the Roosevelt path of regulation. However, regulations are only as good as the elected government's will to enforce them and we all know how that has worked out under GOP administrations.
4
These tech giants are platforms, and it is useful to have a seamlessly integrated platform, like the national highway system. But the way the tech giants use their platforms is more like a highway system that tells you where you can go and hides other exits and gives some people short cuts while forcing others to take the long way around.
There has to be a way of preserving the platform while getting rid of the shenanigans.
Also: income inequality. None of these technologies have contributed more to society than say Einstein or Salk in the 20th century. So why are they making so much more money than those men ever did?
3
We have been bombarded for decades about the dangers of "Big Government" - it's about time the spotlight was turned on the dangers of Big Business, and its co-conspirator Big Money.
5
@Larry Roth
Yep, hasn't it been said that government is the shadow cast on society by big business?
1
This is an important issue. But isn't the most important problem climate change?
3
Here’s a softball, in the form of an anecdote. My mobile-phone plan in the US—from one of the “discount” carriers that piggybacks on top of Verizon’s network (fun fact: No matter which of the many dozens of providers one uses, they all are forced to use one of the Big 4 carriers’ network), costs $60/month for unlimited talk/text and a modest data plan.
In France, my mobile service is 9.95 Euros (about $12) a month for unlimited talk/text and a huge data plan—40 GB instead of 3 GB in the US.
The miraculous thing to note is that these companies proliferate in Europe, and somehow they manage to make a profit. What does that tell you about the Big 4 in the US?
68
@David Walker
Why it tells me is that public discontent is much more easily managed from 1000 miles distant from the seat of power than from the farm outside of Paris.
Mr Wu. These companies are the most successful enterprises in modern US history. Do ya think that some small town apps maybe called FriendShare, GrammyLink, Hi!SchoolKonnekt would have the same effectiveness of linking 2 billion people as Facebook? And Amazon is just the driving force of e-shopping. Do you want to bust up WalMart?
I DO NOT want my Apple, Mac, and App Store separated! They are so great because they are integrated. And how would you bust up Microsoft without creating a bunch of small operating systems that no tech support would understand?
15
The Microsoft question is simple and illuminates the others.
Microsoft makes an operating system, software development tools, applications, and services. It has stifled innovation and quashed competition in each of those areas, except services.
There isn’t room here in the comments of a general-interest newspaper to describe the web of interaction between the OS and applications, and the tools used to develop them. Suffice it to say Microsoft Office has been the gold standard for office applications for over a decade. There used to be other word processors and spreadsheets. Word and Excel dominate because they have inside help: information about upcoming OS features and early support for those features from the tools.
Customers watched that play out time and again, and ultimately voted with their feet. IBM and Borland, to name only two, left the market after repeatedly being duped and stymied by the Microsoft hegemon.
If you think that’s worked out well for consumers, you haven’t used an Apple computer.
Break Microsoft into 4 companies along those lines. Then the OS and the tool vendors can no longer be subsidized by application sales. Information on OS features must be public for the others to survive, with the consequence that competitors will have the same information, and thus opportunity to compete.
It was all obvious 20 years ago. Yet one more failure of the Bush maladministration.
25
@Machiavelli
I think you are misunderstanding the anti-trust actions that would occur. The actions would not be horizontal as you described but would be vertical. So Microsoft's consumer business would perhaps be separated from its back office set of products. Or perhaps the gaming business unit would be forced to leave. For Apple, I assume the biggest concern are vertical business units that produce anti-competitive synergies, such as Apple's new streaming service. It does not have anything to do with their core products but when integrated with them it will be harder for competitors.
Antitrust is not just about fostering a competitive environment for the benefit of consumers, it is also about protecting the public from the sheer mass of large companies. Amazon is the perfect example of that. They hold entire cities and communities hostage with their demands because they are so big.
10
@James K. Look You nailed it James. The Microsoft OS was the classic monopoly, and Microsoft's exploitation of it was the textbook example of abuse of monopoly power. I fault to some degree MS's competitors who absorbed the abuses when some of them, at least, had the resources to finance a lawsuit. I truly believe they could have obtained TROs in short notice given the overwhelming evidence of abuse. But they feared, possibly correctly, that getting on the wrong side of Microsoft was simply too risky. All hail the benevolent do-gooder Bill Gates
1
Look, the proof is in: Capital always wins over Labor. The primary job of our experiment in government is to make sure the whole pie doesn't end up in the hands of the few. So far, we are failing in this regard. The rich and the powerful have refined their sales pitches to the masses, who now think the corporations have earned their lofty positions.
43
@Bill Barbour
I rather think that the corporates have refined the uses of media to target exactly what behavior they want, sort of like the drone targeting of a family opposed to the current power occupant.
The real problem with the giant corporations is that they are now transnational and beyond the control of national governments. I don’t know if anyone has any idea of how to address this problem.
25
@JamesEric
Exactly. Breaking up Amazon would give the Chinese companies Alibaba and JD insane advantages outside the US.
Good intentions will often pave a suboptimal route.
3
@JamesEric
Take the right to form corporations away from states and reserve it to the Federal Government or make the tax policy such that none will choose to be state incorporated.
When that is accomplished, the Federal Government can crack the whip. There was a time when corporations could not exist longer than the natural lifespan of a human. We might want to revisit that.
By limiting the lifespan of any corporation, we can stir the pot and provoke fresh enterprise instead of fossilizing old companies.
2
@JamesEric
Proper international Trade Tariff policies and math formulas can address the problem you raise.
3
Antitrust should have never left American law nor politics.
Antitrust is meant to protect competition. Not competitors.
Antitrust is meant to protect consumers and innovation. Not shareholders and stagnation.
The era of breaking up ITT and ATT was the zenith of the antitrust that began with breaking up Standard Oil's monopoly of oil refining capacity.
Monopoly and price fixing are inherently anti- competition. The Sherman Acts focus on that aspect of business along with the complementary and corresponding Clayton which deals broadly with fair competition.The Antitrust division of the Justice Department along with the Federal Trade Commission have withered and died.
The root cause of the emasculation of antitrust law was a shift in prevailing American economics. Economics is not a science. There are too many variables and unknowns to craft the double-blind experimental controlled tests that provide predictable and repeatable results that is the essence of science.
Economics is gender, color aka race ,ethnicity, national origin, faith, politics, education and history plus arithmetic. The Chicago School of Economics proposed lassiez faire capitalism as the essence of economic efficiency and democracy. Neither size nor deficits nor debt matter in their telling.
Defining markets and competitors is when and where antitrust cases are won or lost. The likes of Amazon,Facebook and Google have cleverly and cynically defined themselves out of any antitrust scrutiny.
42
@Blackmamba
Don't forget the Microsoft antitrust case. They were ordered to split their OS and software divisions. On appeal, they won, but worked out a settlement. They're also a shadow of what they were.
@Blackmamba Hopefully, antitrust regulators will see the forest and not be blinded by the trees.
1
I would put antitrust on the list of top issue priorities for the 2020 campaign following climate change which is an existential threat and must be addressed immediately. The biggest tech companies should all be broken up, with Facebook being first on the list followed closely by Google (Alphabet). It would help if Bernie Sanders pivoted a bit from Wall Street and looked at what is happening on the West Coast. His views have hardly changed over 40 years and people seem to admire that but maybe it is time for an update. A little less taking on Wall Street and a little more taking on Silicon Valley might not get him too many additional votes but it would reflect the reality of today rather than that of the 1980s.
1
I agree completely. The political difficulty will come from the fact that over the last few decades politicians (led by Republicans, but with Democratic acquiescence) have abandoned the political language that discusses the capitalist economy in a coherent way. Instead we have the nonsensical "free market" vs. big government dichotomy, and we are told to ask whether or not to regulate, instead of how, and in whose interest, to regulate.
When Reagan said "government is the problem," he set out not to shrink government, but to turn it over to financial & corporate interests. What he meant, in other words, was that "democracy is the problem." Much of the population has so internalized this point of view that they see conflicts of interest and government inaction as positive things. Some even look to a leader whose chief qualification is a lifetime of corruption and cheating to "drain the swamp." There will be a steep learning curve if Democrats are to succeed in this debate, and they will be outspent at every step by those whose wealth depends on confusing the issue.
140
Is the GOP the party of Lincoln or Reagan? It can't be both. The former spoke at Gettysburg that ours is a government of, by, and for the people, i.e. government and the people are one and the same. The latter claimed government is the problem, i.e. government is "them." Who are "they," who are "we," and for whom does government exist?
23
@Martin The big issue is that we seem to have a consensus that we have a free market in most industries. We do not really have that.
The Republicans are refusing to say that the free market is broken and needs fixing. Many Democrats (at least the progressive wing) are saying "down with the market" all together, as if that has been the problem.
Capitalism remains the best way to produce wealth - but capitalism has been weakened by a government that refuses to enforce competition.
2
We might be too late, except in a few cases.
Once you kill regional shopping, Amazon stays powerful. One you move all pharmaceuticals to singe sourcing, you have little power left to use competition to control cost. Once you have gobbled up and destroyed local banks and neighborhood relationships, it is hard to get them back.
Enforcing the laws already in place - imagine Big Pharma having to follow pricing law like Robinson-Patman - would be a great start.
But a lot of damage is done. Amazon used predatory pricing to fund the takeover of huge markets, then used that power to expand. Microsoft killed competition in most software by bundling it into the operating system. You can't undo those types of monopolies.
But yes, we need at the minimum to start enforcing the laws we already have in place.
75
@Cathy Yes is difficult to undo these types of monopolies, but you can regulate them and tax away their monopoly rents.
17
@Cathy
Robinson- Patman was passed to protect small retailers not the consumer. It essentially was price fixing, trying to set a minimum retail price to be charged. It disallowed price discrimination in the supply chain( excluding consumers).
3
@Cathy
When we actually enforced antitrust laws Standard Oil was broken up into four separate companies. I have long thought that Microsoft should also be broken up into 4 or 5 separate companies that all start out with the same patents and intellectual property and see if we can finally get decent operating systems through competition, since Microsoft on its own doesn't need to do this with its existing monopoly .
10
Traditional anti-trust focussed on firms using market power to raise prices, thus harming consumers. That is still relevant in some cases -- notably, pharmaceuticals. It is not the right metric of damage for mega-corporations such as Walmart, or Amazon, or Facebook, or Google. There, the impact of market power on wages (the distribution of income) and democracy are the main concerns. The problem isn't just that anti-trust is enforced by technical experts, but that the technical experts (and the law) are using the wrong metrics for the contemporary situation.
49
@Rachel exactly what I came here to say. To add, Sens. Warren and especially Sanders are dinosaurs, who apparently can only conceive of corporate power in early 20th century terms. This is unhelpful.
Amazon, for example, simply is not worse for consumers than the brick and mortar retailers it has helped to cannibalize. It is better, and that is why it has succeeded along with its efficiency in reducing costs. It is, however, big enough to hurt the labor market, and to throw its weight around in getting tax and regulatory advantages vs other companies.
Furthermore, globalization means any overly blunt solution that tries to limit their power by means of American laws will run into the same problem cities and states have. Don't want our trillion dollar company creating jobs and tax revenue? No problem, Vancouver is a short drive from Seattle, and Canada is still business-friendly.
We are going to need more creativity in our policy proposals than "BREAK UP THE BIG COMPANIES." maybe Warren is capable of evolving to such a point. Sanders has been singing the same song since the invention of songs.
3
@Alex
With Amazon, and Walmart before it, efficiencies may lower costs but in the pursuit of profits they also lower wages. And those brick and mortar stores provided an income in more diverse ways and places, including paying local taxes and many times supporting local causes.
9
@Alex
Another part of the argument that Warren has made is that The platforms of Amazon, FB & Google are informational which is not a problem in itself. However, they use that wealth of information (businesses/consumers to favor the sale of their ‘own’ products/services development and sales and those of others by special arrangements to enrich themselves due to there exclusive insider knowledge of information. In other words, being an info platform is okay but using that platform to also sell is a monopoly that blocks fair market competition.
3
Seems like a lot of people need a refresher in Economics 101.
When Walmart is the only employer in town, wages stagnate. When there are 20 employers in town, they all compete to get the best employees, driving wages up.
Take any industry you like- the fewer players, the more wage stagnation. Wage stagnation is an anti-trust issue.
The obvious problems of monopolies for consumers even get a pass.
Don’t like the cable company saying “Please choose a four hour window where our techs can stop by, from 8 am until 4 pm, Monday to Friday.” That’s a barely regulated monopoly, right there.
Why do Americans pay higher prices for slower broadband than most other advanced economies? I dunno.
Seriously people, crack open an economics textbook. Market capitalism REQUIRES competition to work well.
Though I wonder if those savvy tech companies just paid a lot of folks to leave all these pro-big corporation comments.
5
Nope, we haven't had market capitalism for years. Ok, decades. We have predatory capitalism. We got ourselves an oligarchy. No democracy, since that ain't working either (especially with McConnell saying "I take to the floor what I want to take to the floor" - I guess Kentucky runs the country now?). With Trump and McConnell at the helm it's become an authoritarian kleptocracy.
Monopolistic Power is like a cancer. It never stops growing or spreading to other parts of the social/economic body. It's present level is close to a stage 4. Fighting this cannot be done by removal, it must be done by control. If we can control the genes in our body then we can control the power of Monopolies. Controlling capitalism and keeping it from reaching a level where it has monopolistic power over our government and society has been recognized since our countrys founding. Adam Smith recognized this as well as Lincoln and both Roosevelts. Teddy recognized the greatness of industry but also saw a limit to their privilege. It is this limit to this privilege we must regain. Free trade is not nor should be free Reign. Only real people should have a say in America not Corporations.
2
Its more than just wealth. Its surveillance.
3
Want to see the science fiction future of unregulated, monopoly capitol ?
Blade Runner 2049.
Enough...
This is the power-baiting analogue of race-baiting...
Looking around at the worst and most predatory examples of monopoly power in the US today – unfailingly of two types:
1. Government entity, like HUD or Medicaid – both designed to pour unaccountable money into bottomless troughs, while claiming shortage
2. Entity relying on the unlimited force of government regulation, to the point of abuse...Both the patent and copyright (and others - e.g. the airport gate-assignment) systems have been absolutely gamed, to enable wares that were meant to have a definite but limited term of protection...So – when a foreign nation, or domestic startup, plays fast and loose with either of these – it’s not so much that it’s legitimized, as that it’s karmically balanced
At one point, consumer camera and electronics producers tried to establish a tiered global-pricing ecosystem...What quickly ensued was a global-scale grey market...No one even trying to pretend that a high-end SLR camera made for Greenland wouldn’t be safe to use in the US...
Yet – as we chitchat – game is being played once more... “National Security” being cited as reason to not buy certain smartphones...Well, if anything to this – what about Volvos stuffed with at least as much high-tech as any phone...
Every time in DC – more and more on the road...
Though not one has yet taken over the controls and ditched into the Potomac...
1
Senator Elizabeth Warren is the FIRST and only, heretofore, to raise the need to apply US Anti Trust Laws to Big Tech. Her courage to do so exemplifies her determination to build a level playing field for ALL Americans. Coincidentally, the elite college pay-for-admission scheme highlights Senator Warren’s point: the wealthy enjoy an open entree to the best America offers, while poorer Americans are SHUT OUT. Thank you Tim Wu!!!!! Senator Warren’s goal is supported by her experience and deep knowledge of the law; she has plans IN WRITING to obtain a level playing field for low incomes, women, all ethniticies. Warren is way more than just a talking head.
2
Elizabeth Warren is growing on me. She seems less canned and less phony now... looser and more authentic. I like her energy, humor, and candor. And her ideas for reforming the corruption and leveling the playing field.
4
Yeah! Sure! The low information voting public, which is better informed on what the Kardashians are doing than what's going on in D.C., and believed that Trump would do everything he promised in the campaign he would do, is suddenly interested in anti-trust policy
There is only one issue that matters and it ain't monopolies. Homo Sapiens is committing communal suicide. We're making our only home unlivable for us as fast as we can.
It's not only the Climate Change that we endlessly bicker over. Every aspect of our environment is screaming in pain as we unnecessarily befoul our air, water and soil through our greed and myopia.
"The problem is, you think you have time." Gautama Buddha
Overturn Citizens United!
2
It is once again time to deal with the 'malefactors of great wealth.' The GOP seems to have forgotten that Teddy Roosevelt was a trust buster. Have we forgotten also that Adam Smith remarked that the first subject of conversation when business men assemble is restraint of trade -- more precisely, how to make it happen for their benefit.
Antitrust analysis has for some time thought that concentration and forcing small companies out of business by outsourcing production to China was the way to benefit consumers. After an opiod epidemic in the Middle West brought on by lack of good maufacturing jobs, that doesn't seem so clear. Turns out consumers without jobs get depressed -- who' a thunk it.
The problem seems to be that the digital space is part public utility and part private enterprise where the really big dollars have their source in the information trails we users generate. We users are the product; we users also have come to rely on the standardization of software and platforms that both impels and follows from increasing dominance of a small number of profit-making providers. What trade-offs of platform incompatibility are we willing to tolerate to be relieved of our private information being the profit-center that undergirds these companies' dominance?
Yes, if the Feds can't engage in Anti-Trust actions we can leave it up to the climate changes... that will likely force them to modify their behavior...or break them into pieces, literally. Maybe you could combine trust busting and climate and come up with a single issue for 2020?
1
One inherent flaw in market system is that the while the system provides maximum benefits for society when there is a strong competitive environment, the maximum benefit for the firm is derived where there is no competition, at the expense of society.
The anti-trust laws of the late 19th century and early 20th century were based on the concept that the market system is good for society but competition must be maintained to get the best results for society.
Over the quarter century, these protections of the competitive market system have been eroded away. Nearly all anti-competitive mergers and acquisitions have been allowed.
3
In general, anti-trus is about helping consumers. If a company gets to be big because it provides something people really want and it does that in a cost-effective way, should it then be broken up? Rather, it is monopolies that control their market dominance to raise prices and hurt consumers that should be broken up.
There's no evidence that these companies are making things more expensive for consumers, In fact, quite the opposite. Hurrah! So, there's no real reason to break them up.
Mr Wu cites factors such as fake news as a reason to break them up. But, it's unclear how breaking up the companies would affect that very much. Mr Wu is simply using anti-trust law to further his political agenda. He should be ashamed of himself.
3
Amy, anti-trust is about market power and what happens when an entity so dominates a market that real competition is no longer possible. It’s not only about costs to consumers. I encourage you to research monopsony and it’s effect on wages, as well as some of the more historic approaches to monopoly power and anti-trust enforcement.
I can assure you that Mr. Wu’s “political agenda” has a lot of economic theory and historical precedent behind it.
3
Fannie Mae and Freddie Mac in government receivership has ~95% control of the mortgage market. Originations, pricing and servicing...or lack there of has been in government control before and after the financial crisis. Before they look to clean up others they should maybe look in their own back yard. But now that they transfer “profit”, tax 10 basis points for roads and ignore proper capitalization requirements, Maxine Waters may never get to it.
1
Controversial take: these large companies pay their workers better, including much better benefits, invest huge sums in R&D and capital projects, and provide highly useful services for free. Maybe we should be talking about how we can create more companies like this, not fewer.
1
I believe there’s a difference between breaking up google and Amazon, actually I believe there’s a case for nationalizing google, water and electric companies as integral parts of our infrastructure, essential utilities, particularly in light of the fact that things like dams were built with public money. Amazon is a whole different story, it should never have been able to systematically drive one area of retail after another by selling things below cost with the implicit approval of shareholders who apparently seeing the “big picture” were happy to go along with a scheme of losing money for years until their competitors were out of business aided often by the, political gimme of “no sales tax provision in many states” supposedly to get internet sales off the ground in its infancy. There should be a law against this, I don’t know if you call it monopolistic or something much more sinister, but to me when companies, like all the “ disruptive “, ones set out to destroy other business by loading up on capital at the public trough and then “ burning” through that money until your competition is eliminated is not beneficial to anyone in the long run except financiers, lawyers and early investors, ultimately the public pays one way or the other whether through the loss of millions of good jobs, small businesses, the backbone of our middle class, or the tax revenue no longer collected as behemoths such as Amazon are able to extricate tax concessions or seek out tax havens.
5
We have a lot of critical issues to address, and antitrust is surely one. but there's only one existential issue facing our world: climate change. Whoever has the best plan for that will garner my vote.
1
Bigger is not better! Small start ups capture the imagination for their innovation and are immediately swallowed up by larger businesses who have so much excess cash.Gone is the innovation, gone are the incentives for workers and gone are workers who are redundant.Instead of double the research the budget it is halved. all cash has to flow to the bottom line and to the top line which pays the exorbitant salaries which are demanded by the titans of industry.Monopoly power should be central to the campaign-it will be opposed mightily by big corporations who generously fund the campaigns of the candidates.
3
"We hold these truths to be self-evident; that all men [read: and women] are created equal"
The central issue of the 2020 elections is whether a majority of Americans still believe those words, penned by Jefferson 243 years ago, or conversely, if a majority now believe that only the wealthy and powerful few are endowed with inalienable rights to life, liberty and the pursuit of happiness. But, yes, if we seek to return America to a course where equality before the law and equality of opportunity are real and not merely a cruel taunt, reinvigorating anti-trust is an essential component because scale, especially in a big-data, algorithm driven, networked economy, inherently endows its possessors with unfair market power. Reforming capitalism so that works for all Americans, not just all white Americans as it did for the middle part of the twentieth century, but all Americans, is a tried and proven path to reforming democracy in America that promotes life, liberty and the pursuit of happiness of the both the many and the few.
Free market competition is stifled by monopolistic practices and overly-generous patent protections. Big businesses, even innovative ones like Microsoft and Amazon, can suppress free enterprise and innovation.
Wouldn’t we be better off with a dozen competing Microsofts and a dozen competing Amazons, rather than one each?
Anti-trust laws are an ineffective, lawyer-pandering attempt to reduce trade constraints by allowing the government to “break up” or suppress the formation of big businesses. A far better approach would be to outlaw the 10-12 most onerous monopolistic practices, such as buying off and buying up competition, bundling products and services, dumping products, and false product differentiation. Then, Bill Gates would break up Microsoft, if needed, and Jeff Bezos would break up Amazon, if needed.
Get the idea? The free market can be protected by outlawing monopolistic practices directly rather than letting the government break up offending businesses.
4
If we want to limit the impact of Facebook, Amazon, and Google’s business models, try regulation what these companies do with our private data, and make everything about us, including our internet behavior, private by default.
3
Monopoly power is just one aspect of the issue confronting the American masses: Will they vote for a candidate, like Trump or Biden, who will continue being the agent of the rich against the rest of us, or will they actually take power into their own hands for a change by actually electing a tribune of the people named Bernie Sanders, who will finally put the common good above what's best for the rich, at the expense of the masses.
1
You might have added to this list the increasing “monopoly” power of the chief executive of this country, and our congress’s failure to do their duty checking it. Concentrated power is indeed among the key issues of our time, but I have little faith in our citizens’ willingness to hold those in power to account.
2
Surely both advocates for breakups and executives of these corporations recall the outcome of the breakup of Standard Oil. Rockefeller became wealthier than ever. This would likely lead to a massive windfall for shareholders.
I'm not sure anti-trust is *the* central issue. However, it is nice to see candidates discussing something tangibly important. We need to do something about tech. I appreciate the summary of the varying Democratic positions at present.
I would add at least one separate prong to the discussion though. Is anti-trust law *the* most important lens through which we should view our tech behemoths? Where does anti-trust law intersect with things like national security and cyber warfare? Is a distributed tech infrastructure possibly safer than an aggregated one? Or does scale provide some benefit we don't fully recognize?
Tech companies will obviously argue scale is safe and they should only share information with the government when they want help from the government. These are blatantly bias and self-serving positions. However, the question is worth asking. Do we want our technology to look more like the internet or more like U.S. Steel? What is the optimal mix between the two?
Not sure that Apple belongs on a list of monopolists with Facebook, Google, Amazon, and Microsoft. Apple loyalists such as myself have always comprised a very small minority of the computer-owning population, and even at the moments of the company’s greatest market share—iPod, iPad, iPhone—plenty of other competitors’ products were readily available.
1
@Old Soul Apple is almost a religion, and its followers seem blind to any reality.
Tech companies are transforming trans-national companies & economies. I think the evolving changes at the NY-Times are making the Times more dynamic & impacting. They also contribute to the British debate to stay or leave the EU and to the NY-Times potential forum/impact on this debate.
Mid 20th century anti-monopoly & natural monopoly theory needs to be updated. For example, Silicon Valley is not a utility or a railroad. However, aspects of Silicon could be - examples include needed investments in 5G transmission lines and data warehousing. Natural monopolies & oligopolies exist for more reasons than cronyism. Maybe some natural monopolies that serve as backbones and highways for the Commons are somehow owned by the Commons; not unlike our road system for automobiles.
1
When technological innovation is combined with monopoly power, consumers lose twice. The coming 5G wireless revolution will potentially dethrone Comcast for internet service, but only to replace it with AT&T. No plucky start-ups need to apply.
Breaking up all the giants protects the market forces that will benefit all of us.
1
Just to educate Ms. Warren: A monopoly refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller.
She thinks Apple is a monopoly? WHY because they make a great product? We who buy Apple know that tech assistance is a FREE phone call away. Our hard drives don’t crash. They are a bit more expensive, but once you buy a product of theirs, that’s it. No charge for upgrades like Microsoft. Speaking of Microsoft, they had been the only game in town, and then Apple showed up. See above definition.
The same with Amazon , they filled a niche. Yes, they have knocked out most book stores, but I read books on my Kindle, so a bookstore won’t help me.
If she’s going to go after BIG companies, what about Walmart? They don’t pay their employees a living wage. Do they still have to get food stamps, Medicaid? I will not patronize a Walmart.
We in NYC won’t allow them to build a store here because of their "business"practices.
And then there are the drug companies, don’t get me started.
1
@Diane Berger Your beliefs about Apple are completely outdated, by maybe 20 or 25 years, a myth created by Apple. I have used Apple and Microsoft extensively over the past 30 years. I used to think that Apple (or, when I started, MacIntosh) was superior, until I was in a work environment that was primarily PC. I quickly learned that MS software worked as well, if not better, then any Apple OS I used, and in fact, had advantages that far surpassed Apple.
The same goes for the superiority of android phones. Even 10 years ago, my old HTC droid incredible phone had features that iPhones do not yet have.
None of my devices ever crash.
1
Today only Boeing and Airbus manufacture commercial aircraft, for the global market. At one point, in the US Lockheed and McDonnell Douglas were also competitors, in addition to others around the globe.
The lead story in the NYT today is about how Boeing's CEO has successfully lobbied Trump to not ground the 737 Max 8 fleet in the US, the last country to allow them to fly.
One doesn't have to look very far to see the potential harms and risks stemming from the concentration of corporate power. It's time to start seriously talking about anti-trust issues again.
18
The issue of monopoly corporate power is second only to climate change as a crucial issue in the 2020 election.
17
I caught a tv news interview with Elizabeth Warren. Her explanation for the need to break up high tech companies and prohibiting their ability to monopolistically control consumer markets and business competition was clear and studding. Had no idea of how devastating Amazon, FB and Google etc. are to our ‘public’ economy I.e. capitalism and socialism are not mutually exclusive but must co-exist to maximize public potentials.
She is ahead in expressing critical thinking and originality compared to other presidential candidates like Bernie was before.
If she gets publicity, can raise money and has the opportunity to explain her views? She will be most formidable. However, sound bite type delivery is not her forte and I wonder if potential audiences will dismiss her as to wonkish and thereby unappreciate her capabilities to bring real needed changes.
And that most public media prefers quick gloss and glitter does not bode well for her or a thinking public!
19
this is Warren's issue that she can run to the left of Bernie. As Amazon showed when decreasing its employees hours after increasing the minimum wage, if you let employers determine the implementation of any minimum wage, they will implement it in a manner that does not hurt their shareholders and make workers work harder less often so they can point to the fact that the market does not work with minimum wage, because in fact, they are the market--and can control the market implications and implementations.
Warren talking about nationalization of Big Tech and specifically about turning Tech into public utilities gets more to the root of the problem than forcing them to implement minimum wages that they can use loopholes to avoid and put the burden on the working poor. She should also talk about government subsidies for a massive Reeducation Industry that would have the potential to guarantee perfect employment and become perhaps our largest industry.
I think she also has an unbelievably strong pitch she can make to 'Bernie Bros', so long as she gets some early male advocates making the pitch on her behalf. Warren has added much needed energy to the race, and if she continues making bold policy proposals on Bernie's left, I think she has a really good chance at winning the nomination. She can still be a capitalist and run to Bernie's left. There is plenty of room, and so many great proposals in that area. That's where the energy is at.
2
Beyond the usual suspects are many companies in many industries that have left Americans effectively with no competitive market.
Notice how rarely you see a cable company build a system in the area another serves- Comcast, Charter, Sudden Link, etc generally do not overlap and have created swaths of our country where one - and only one - is available for cable TV or broadband internet. The same is true of AT&T and Verizon- rarely does U-Verse (broadband) or AT&T Fiber overlap FIOS. This may not be a cartel, but the end result is the same- little to no competitive market for wired broadband to much of the United States.
The one thing they usually agree on is keeping municipal utilities from offering broadband- even in communities that they have chosen to pass by. This should not be, but states like Tennessee have passed laws prohibiting public utilities from extending broadband outside their original service area. This is not the proper role of government and such laws should be illegal if they are not already.
8
The monopoly power that should be broken up is the monopoly power of the federal government. Nowhere in our economy is there more consolidation of power over such vast resources, with such waste and corruption.
@Bill
Monopoly power of a ‘partisan’ Federal or State government should be broken up and replaced by democracy. Maybe unionism could rise again here and go international. Although we may have different social attitudes, we’re all human at our base.
1
@Bill
Yes, we need more efficient private businesses like the Trump organization, and gun manufacturers. I've no doubt you hope for a permanent government shutdown. We've no need for Social Security payments, the EPA, the CDC, the FDIC, Air Traffic Controllers, National Parks, or for federal disaster assistance after tornadoes, floods, hurricanes and earthquakes. Let the locals affected handle it through "faith based initiatives." Perhaps we can close down the Executive Branch, and shut Trump's Twitter account.
Restoring some semblance of faith in our government should be the defining issue of 2020. Joe Biden should run but pledge to serve only one term. During his term, he should continue on the course that Obama began but wasn’t able to complete because of Tea Party chicanery. Most importantly, he should make a point of trying to understand bridge partisan differences wherever possible. For example, yes to hi tech border security, no to cages and family separations. Etc...
Once Biden steps down in 2024, the two sides will have a blueprint from which to contend with their differences.
Everything that is worth having is worth regulating. We regulate our own body functions, blood pressure, insulin, cholesterol, and so on. Any competitive game you enjoy has rules and regulations, traffic is regulated, the water flow in the kitchen sink is regulated, ... You get the point.
But, when it comes to the most vital parts of society, the markets, TV and radio broadcasts, banking, etc. are free from regulation on the false premise that regulation stifles competition and innovation. Hogwash! I remember the days before my retirement from teaching college saying in the class "legal and regulatory environment is pro-consumer and pro-competition." Alas, in the last 10-15 years of my 40+ year career, all those regulations that tried to protect the idea of competition and the consumer were done with. Gone! What we have left are the memories of the banking collapse, the break up of AT&T, and other landmark events. Each "child" of AT&T is a successful large company in its own right today. Regulation did not kill but revitalized them.
For a system, any system proper functioning requires rules and regulations. Our markets and economic system are among them. We should welcome regulation not fear it for they are already taking advantage of the masses.
32
Agreed, and about time!
So who is 2020's Woodrow Wilson? I bet none of the current front runners, but a relatively unkown outsider. And it may take a Republican split like in 2012, to deny Trump all but his base.
4
@me don’t you mean President Teddy Roosevelt ?
I wager Walmart has destroyed more jobs and businesses across America than Amazon and nobody is saying break them up. Its all cheap political theater.
Politicians are just about the least qualified when it comes to determining who the winners and losers are in our economy but one thing is for sure it is the citizenry who will lose.
The cornerstone of anti-trust law was the breakup of the Standard Oil Company which defies economic theory. AT&T, broken up and has reconstituted itself as a behemoth once again. Sears, Motorola the list goes on. If it was up to regulators we would still be using typewriters and music would be on wax cylinders.
Capitalism may not be the best system but its better than everything else at delivering what consumers want when they want it.
1
@AusTex It's pretty clear that leaving it all up to the consumer is the road to destruction of our environment. We just don't know when to stop until it is at our own doorstep and then it is too late!
@AusTexm Capitalism is best at delivering monopolies. Just look at how successful it has been at destroying small businesses that get in the way. And, how it recovered after Sherman Anti-Trust and America’s Slave economy. Is capitalism too big to fail? Yes, unless it submits to tough regulation which will force it to share the wealth.
First, there is a typo in the last line of the column. the word "do" has been left out.
Next, this is not news, but the NYT writing about this problem is news. Merger and Acquisitions has been the wave since the break up of AT&T years ago. The government and AT&T went at it in court for years with the court deciding to "break up" AT&T and create the "Baby Bells." Since then they have re-merged with other telephone and information services recreating the mega-corporations that are in some instances bigger than what was broken up. Unrestricted Capitalism naturally results eventually in one company, whatever the industry, controlling (owning) that field. They destroy or purchase their competition, all to the detriment of the public. Even Adam Smith foresaw this result and called for restricting (regulating) companies in order to prevent this outcome and the abuse of power that results.
Do I think the current trend of M&A will stop? No? Why?
Once again, this a result of the failure of the educational systems throughout the USA. As this article points out, these issues are over 100 years old, but the public is ignorant to them and journalists are now trying to educate them in a 1000 word column. I think not.
At least the NYT is writing about this issue, while the rest of media (mostly owned by media conglomerates - aka mega corporations that are the result of M&A's since the "Baby Bell" breakups) are not and will not. I wonder why?
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Any kid who’s ever played Monopoly will tell you that whoever is the Bank will always win if they cheat. (Which they always will.)
I’d like to think that important issues like this will play a roll in upcoming elections. But I’ve got a feeling 2020 will be all about Race Race Race and Gender Gender Gender...
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the tech giants, Google, Amazon, FACEBOOK surveil and monetize your data. This is about much more than or something different from antitrust. It's about tech using us instead of the other way around. This is a threat to our privacy, democracy and mental health. The Europeans are already reigning in the Zucker fiends . See how they do it and why and wake up USA.
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I hope history will look at the 2020s as “the second Progressive era”. Bring on the muckraker journalists!
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This is a complicated subject that deserves thoughtful consideration and attention. There is an upside to monopolies which is that in the case of the original assemblage of several small telephone companies into one, Federally regulated monopoly called AT&T in the early part of the 20th century, America gained a unified and standardized telephone system that eventually connected the entire country. In the case of Microsoft's dominance of desktop PCs used in business, another standard was created that unified data communications within the business world and beyond. Now, AT&T and Verizon have adversarial, acrimonious relations with their unions, CWA and IBEW, which they claim hinders their ability to remain competitive. When MCI and "the need for innovation" resulted in the breakup of AT&T, the result was chaos among the remaining Regional Bell Operating Companies, which has now led us back to Verizon, AT&T and the leading cable companies. Congress protected Amazon from state sales tax collections and distributions for years to help them grow. We need to be much more strategic in our policies and decisions regarding which companies get the benefit of government protection, and how we are going to implement those protections for the benefit of the Middle Class. Our democracy will not survive if we do not find a better balance between corporate interests and the interests of ordinary working class citizens.
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Bell-Laboratories was a powerhouse of innovation. It suffered a slow death when AT&T was anti-trusted and we don’t seem to have a low cost phone service as a result.
The list of tech companies today to be anti-ed are the foundation of the information revolution. Two of them, Apple and Microsoft, are competitors.
Their pervasive power changed our society, but change has been norm since the fifteenth century. The effect on small and local businesses is not all negative. One example is used books; the remaining second-hand book stores make most of their sales through the internet which adds potential to even the most obscure texts.
There is much debate as to why we have ten years of steady economic growth; perhaps internet commerce has helped - in which case, do we really want to bite the brands that feed us.
@Gerard Doesn't it depend more on the quality of the leaders of a company? You just can't shut your eyes tight and say, 'anything goes . . .' Some can be trusted to do the right thing for the country, and then, there's those others . . .
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It’s not clear Bell Labs suffered at the hands of the Sherman Act. Long before AT&T was broken up, leading edge semiconductor work had moved from Murray Hill to Palo Alto.
Nor is it obvious we should trust monopoly profits to fund research. Perhaps the most important work to come out of Bell Labs was Unix, which AT&T copyrighted and patented. So monopoly profits begat ... new monopoly profits.
The internet, we should note, was created on a different model: research funded by the public, the product of which is in the public domain.
On the evidence, which of those two would you say was the more successful?
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@James K. Look
I suppose I was thinking of the transistor - there are a lot of those around now. I think you could find problems researchers have in attracting public funds.
Is there not a tech story that Mr. Wu will try to get the tech industry killed?.
Sure let's divide Google so that your searches do not work as well as they do today, or perhaps the new "Search Inc." needs to charge for them because they cannot be individually supported without the ad revenue. Maybe the same for Chromebooks now a free OS will change into a fee based OS.
Breaking up large tech companies offers a large amount of unintended consequences to happen. Regulate if necessary but be careful of breakups. This is not the oil company barons where dividing an oil company can be done without much fear.
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@Charleston Yank
I use Duck Duck Go. My searches work just fine.
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@Charleston Yank This is about curbing tech's abuses, not breaking them up.
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Standard Oil was broken up.
The oil industry survived.
Legend has it John D. Rockefeller was playing golf with Woodrow Wilson when news of the breakup decision was announced. He advised the president to buy Standard Oil stock because, he said, the parts would be more valuable than the whole.
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When the notion of competition is scattered to to the prevailing winds, antitrust is inevitable. For too long, our business environment has enabled dominant companies to gobble up the competition. Take for example the recent merger of AT&T and Time Warner that was approved just a couple of days ago. As a result, wages are depressed, inequality flourishes, and everything is worse for everyone except the almighty corporation.
I not only support Elizabeth Warren to break up Apple, Google, Facebook, and Amazon, but I support laws that prohibit the top 5 companies from merging with anyone.
If there is less than 10 companies in any given industry segment, that segment needs to be broken up.
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Personally, I sincerely hope you are right about antitrust's reemergence. I suspect, however, that Trump has moved a third rail into the center of 2020--Medicare, Medicaid and Social Security.
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Standard Oil Co. - the 'high tech' of it's day - was broken up under the Sherman Anti-Trust Act established in 1890. There's nothing 'revolutionary' or 'radical' - about enforcing that Act. More generally, many (most?) of society's ills are from lack of enforcement of existing laws and regulations rather than the need for new regulations.
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@Unconvinced
Monopolies and existing laws are like mice and traps, mice are constantly out smarting the traps and so we are always in need of a better mouse trap.
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I agree that this needs to be one of the central issues of this campaign. Creating an even playing field is something that will resonate with voters, especially with the focus on justice and fairness issues. I wish that more of the party hopefuls were talking more about anti-trust - especially moderates who hope to set themselves apart from the far left.
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So, since we've forgotten our history we are doomed to repeat it. Sounds right.
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And if it's making a return, then the question is, where did it go? It was ignored by the people whose job it is to uphold and enforce.
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@Joe
Ignored? No bought and sold, a common commodity in monopolistic capitalism is people. The selling of one's soul is a hot commodity.
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The increased focus on antitrust is appropriate. Looking first at "monopoly rents", the biggest costs to consumers lie in the health care field. Next look at the impacts of executive compensation and excess concentration through mergers and acquisitions. We've been asleep at the switch far too long.
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Consolidation = collectivization. It accrues power in the hands of fewer people, and allows for the privatization of profits and socialization of losses. If you fear socialism, you should support anti-trust enforcement.
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Professor Wu rightly makes frequent use of the word "power" in his excellent opinion piece. Monopoly power has also been used to gain outsized political power in our weakened democracy. Returning that power to people is another, non-economic, reason to bust up the monopolies. We live in a world that is largely the creation of the wealthy corporate elite - "corporations are people too"? Until power is taken from them, not much is going to change in this country for the better.
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Equally important questions of concentration, market power and market failure exist in the health care and health insurance sectors which account for about 20% of GDP. This is one reason consideration government regulation of prices beyond government sponsored programs is no longer a fringe posiiton.
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But the rest of the system is rigged so that size equals power and competitiveness. That also needs to be compensated for. It's like handicapping people in a sport. Who wins will just be the one that gets handicapped the least. The system is weighted to advantage size. For example, if you are big you can sell at a loss to drive out a competitor, or stay in court longer than a union. When American companies are all broken up but foreign companies aren't, doesn't that put American companies at a disadvantage?
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@Robert David South For one thing, there's the matter of fines. I was reading in the Guardian about small farmers being driven out of business by factory farms that shrugged off fines for all kinds of abuses. When a business is fined, it should be proportional to it's size, not an absolute amount that may be a fortune to a small business but pocket change to a big one.
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@Robert David South
There are rules almost everywhere. I believe the Euro rules are even stricter. And this is why we have international trade rules. Unfortunately the rules protecting Americans are so lax as to be worthless.
It is all that and, more. Yes, great size and power can be linked to many symptoms that affect most people, not only economically but as you pointed out, "the demise of the middle class..."
More is related to the "monopoly mentality" that has taken over from the top down. The president wants the monopoly of power and because he thinks he can obtain it, he pursues it instead of doing his job; celebrities and the very rich feel they have the monopoly of having all above the rules, so we have the college admissions crimes; big corporations, lobbyists and campaign big donors know the can govern without being elected, so we have the Boing 737 Max 8 model still flying in the US.
Is not only the antitrust laws, but it is also the monopoly mentality of the powerful.
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All you need to do is have a look at Kamala Harris' donor list. Nearly all of her top donors have trust issues. Mergers and acquisitions either completed or pending, anti-trust litigation issues, and she even has an M&A law fim in her top donors, who specializes in medical and pharmaceuticals.
Unfortunately, Democratic voters are most likely too myopic to care. She ticks the right identity boxes, and the party leaders know she won't trouble their big donors.
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@rtj
Politico has a couple of pieces out this morning on campaign financing. Seems that even Warren and Sanders took a lot of big tech money, and even those candidates who eschew PAC and lobbyist money aren't above grovelling for big donor money. There's probably no hope for us.
@rtj
Taking money from employees is a lot different from taking money from the corporation. There is more to this story than Politico's story.
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@george
True. As far as small individual donors go. But large donors and bundling are another thing too.
Yay! A lovely essay. I have wondered where many of the things in my life have disappeared to (like taking off one's hat when one goes indoors, and truck farming - which was a big thing in the '50s - and control of monopolies. And what about taking the flag down and in when it's inclement weather or even sunset? Google and Facebook and Twitter and AT&T and the 2 party system and Verizon, etc., have gotten WAY too big and it's past time to split them up (in some cases again, and more than Harold Green did...). Monopolies are an example of greed.
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