President Biden signed an executive order on Friday aimed at curbing corporate dominance, strengthening business competition and giving consumers and workers more choice and power. The order includes 72 initiatives with a wide variety of topics: net neutrality and cheaper hearing aids, a closer scrutiny of Big Techs, and a crackdown on high fees charged by ocean shippers.
The president called his order a return to the “antitrust traditions” of the Roosevelt presidencies at the turn of the last century. This may have surprised some listeners, as the order offers no immediate call to disband Facebook or Amazon – none of the breach of trust that is the idea of the antitrust signing.
But Mr Biden’s executive order does something even more important than breaching trust. This takes the United States back to the great anti-monopoly tradition that has animated social and economic reforms almost since the founding of the nation. This tradition is less concerned with technocratic questions such as whether corporate concentrations of power will lead to lower consumer prices and more with broader social and political concerns about the destructive effects that large corporations can have on society. our nation.
In 1773, when American patriots poured British East India Company tea into Boston Harbor, they were protesting not only against an unfair tax, but also against the British crown granting a monopoly to a favorite. from the courtyard. This sentiment flourished in the 19th century, when Americans of all stripes saw concentrations of economic power corrupt both democracy and the free market. Abolitionists were inspired by the anti-monopoly philosophy when they denounced slave power, and Andrew Jackson sought to dismantle America’s Second Bank because it supported the privileges of an Eastern business and financial elite.
Threats to democracy have become even more pressing with the rise of giant corporations, often referred to as trusts. When Congress passed the Sherman Antitrust Act in 1890, its author, Senator John Sherman of Ohio, said, “If we don’t support a king as political power, we should not support a king in political power. production, transport and sale of one of the necessities of life. Forty-five years later, President Franklin Roosevelt echoed this sentiment when he denounced the “economic royalists” who had “created a new despotism”. He saw concentrated industrial and financial power as an “industrial dictatorship” that threatened democracy.
Standard Oil and other trusts have become targets of antitrust lawsuits not only because they have crushed their competitors and raised consumer prices, but also because they have corrupted politics and exploited their employees. Dividing these giant corporations into smaller units might help, but few reformers believed that the government’s antitrust initiatives offered the primary solution to the power imbalance increasingly prevalent in modern capitalism. What was needed was more government regulation and strong unions.
In the progressive era, courts have ruled that a wide variety of businesses and industries “affected by the public interest” can be subject to the type of government regulation – covering prices, products and even standards. work – which in recent years has been largely restricted to power and transportation companies. Two decades later, the New Dealers sought to challenge monopoly power not only by renewing antitrust litigation but also by encouraging the development of unionism in order to create industrial democracy within the company itself.
This anti-monopoly tradition faded after World War II, collapsing into an arid discourse that asked only one question: Would preventing a merger or the dissolution of a company lower consumer prices? Conservative law professor Robert Bork and a generation of like-minded lawyers and economists convinced the Reagan administration, as well as the courts, that antitrust laws were blocking the creation of efficient and consumer-friendly business forms. . Even liberals like Lester Thurow and Robert Reich considered antitrust irrelevant if American companies were to compete abroad. In 1992, for the first time in a century, no antitrust element appeared on the Democratic Party’s platform.
Mr Biden has now correctly stated that this 40-year “experiment” has failed. “Capitalism without competition is not capitalism”, he proclaimed when signing the decree. “It’s exploitation.”
Perhaps the most progressive part of the executive decree is its denunciation of how big companies are cutting wages. They do this both by monopolizing their labor market – think of the wage pressures exerted by Walmart in a small town – and by forcing millions of their employees to sign non-compete agreements that prevent them from taking better jobs. in the same profession or industry. .
The president and his antitrust cabinet have turned an important aspect of traditional business competition upside down. For too long, those who advocate greater competition between firms have offered employers a mandate to cut wages and benefits, as well as to outsource services and production. But Mr. Biden envisions a world in which companies compete for workers. “If your employer wants to keep you, they should make your stay worth it,” Biden said Friday. “It’s the kind of competition that leads to better wages and greater dignity at work.
The nation’s anti-monopoly tradition resurfaces.