In the 1980s, under the Reagan administration’s lax enforcement of antitrust laws, corporate mergers in the U.S. began to jump. Since then, the market power of America’s biggest corporations has only continued to increase, with this result: A tiny number of companies dominate slews of major industries—from pharmaceuticals and retailers to hospitals and meat processors to defense contractors and social media, to many, many others. This issue was thrown into stark relief during the pandemic when behemoths such as Amazon, Google, Facebook, and Walmart saw their market values skyrocket while smaller companies all over the country went bankrupt.
Zephyr Teachout contends that monopoly is the forgotten issue of our time.
Monopoly, argues the law professor and former New York congressional and gubernatorial candidate, is a key driver of modern society’s biggest problems, such as low wages, income inequality, financial speculation, restrictions to worker freedom, declining entrepreneurship, and racism.
With her new book, Break Em’ Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money, Teachout seeks to make anti-monopoly a top issue for progressives again. I recently spoke to her by phone about how the Left has missed the monopoly problem, why her book is more about power than economics, and why we need to strive for a “fuck off” economy.
In your introduction, you write that humans have a drive for power that must be checked or tyranny will result. Why did you start like this?
So many questions about politics, power and the economy are really questions about human nature. When we treat Jeff Bezos or Mark Zuckerberg as only about the bottom line, we’re misunderstanding motivations. It’s much more than greed. As I write in the book, these are “William the Conqueror” types. They’re out to accumulate power. We need to confront that if we’re going to deal with those pathologies.
You’ve called monopolies “private systems of government.” What did you mean by that?
Certain companies basically regulate us in totally unaccountable ways. So they’re acting like governments in the scope of their power. When Zuckerberg makes privacy decisions, we treat it like a governmental action and the impact is as great or greater than a federal law. But our response is to petition Facebook instead of saying, “Let’s change privacy law altogether for this essential infrastructure.” We need to acknowledge their power and then say this is not a legitimate form of government.
“Our 40-year merger wave has led to the decimation of Black businesses.”
Republicans tout increased competition as the key to a well-functioning market. Why would the age of mega-mergers, which restrict competition, begin under Reagan?
The ideology that Reagan, William Baxter, and Edwin Meese ushered in says that mergers are good if they benefit consumer welfare. That basically means lower prices. But a major purpose of anti-monopoly law is to constrain tyrannical private power, and they basically stripped that out. Monopolization used to be thought of as a form of theft, like highway robbery. But since the ’80s we’ve moved away from thinking about it like that.
It’s interesting that changing antitrust policies was tied to their mass incarceration and anti-civil rights agenda. Why? Perhaps they wanted a white-controlled, top down society with more mergers. Maybe it was more of a bargain in that they were able to sell the corporate agenda to working class whites who were hungry for dog-whistle politics. It’s a question that needs more exploration.
How does monopoly power drive racism?
A lot of monopoly power is white power. Look at the Fortune 500: the farther up you go, the whiter the club becomes. The impact of mergers has been to erase a lot of Black economic power by wiping out Black-owned newspapers, funeral homes, and insurance companies. That matters in elections and it matters in protests. It was essential that the civil rights movement had Black businesses supporting it. There’s more to study in this area, but when you see that our 40-year merger wave has led to the decimation of Black businesses, that’s not irrelevant to contemporary politics.
You spend a lot of time discussing surveillance and argue that we should ban “surveillance capitalism.” Why?
So much of modern life involves centralized power surveilling us. It changes our relationship to each other, to power, and increases paranoia. But we discuss surveillance like it’s a passive fact of technology instead of understanding that we can change it. We should not allow a surveillance-based funding model for any platform that’s infrastructure-like. Amazon, Facebook, and Google are essential communications infrastructure, and it’s crazy to fund infrastructure with targeted ads. The incentives are not to provide a neutral platform, not to provide good information, but to push what’s inflammatory without regard to truth. We have better ways to fund infrastructure. I prefer a fee-for-service model but the state could pay for it.
“Fear is a fact of life for so many small businesses right now.”
The plight of chicken farmers is an important thread in your book. You argue that “chickenization” is spreading as a new model of centralized control.
The system that Tyson, Perdue, and others innovated looks like farmers competing in a decentralized market but it is, in fact, completely controlled by distributors. Tyson contracts with chicken farmers and the only way they can get their goods to market is if they follow the dictates of Tyson: Use the advisers recommended by Tyson, the feed Tyson gives them, the eggs Tyson gives them, and they’re forced to sign arbitration agreements that mandate any conflicts stay out of court. They’re also prohibited from talking to other farmers about this. So instead of a competitive market, you have one where Tyson is the puppeteer. Tyson could say “This week let’s give some farmers worse feed and see what happens.”
You say that experimentation is a common feature of “chickenization.”
We’re in a system that encourages the abuse of power to maximize profit. One of the goals of centralized control is to instill fear. Fear is a fact of life for so many small businesses right now. Whether you’re talking about franchisees who run their own McDonald’s, or restaurant owners getting sucked into the platform control of Seamless and Uber. Experimentation is part of that control. We know that Uber experiments on drivers. Pearson experimented on students by adding different psychological messaging to some versions of its tests. Facebook constantly experiments to see how our moods affect behavior.
You mention Perdue. Sonny Perdue is the current secretary of agriculture. Is this not a blatant case of the foxes guarding the henhouse? The GOP has a long history, going back at least as far as Earl Butz under Nixon, of appointing agriculture secretaries who are mouthpieces for agribusiness.
Yes, this is wrong and important. In theory, there are two ways that monopolies are taking over government: directly, by regulating and controlling us; and indirectly, by buying politicians. Sonny Perdue is an example of how these bleed into each other. He is part of a growing social, political, and economic club that rules us in different ways. We sometimes call the lower level version of this club the “revolving door,” but revolving door is too benign a description: it’s an elite power club, whose members are ideologically committed to their own superiority and their right to use their power to extract power from the rest of us. As you point out, this is, in a sense, nothing new. But what is new is that 40 years into this system, the combination of forms of power has worn people down, and gradually replaced the planks of the good ship democracy—some of which are always rotten—with the new corporate ship.
You describe Uber’s entry into New York as blatant predatory behavior that used to be illegal. How did they get away with it?
Because of the glamor that surrounds tech and the language of disruption. A lot of disruption is just law breaking. But we’ve allowed Big Tech to get away with it by adding glamor. A friend of mine, Tom Streeter, wrote about how one of the great cons in modern American history was when the language of the ’60s got embedded in techno-utopianism. This hippie, we’re-all-connected language allows these rapacious companies to cloak what they basically are: the mafia coming to town, breaking the laws, and then changing the laws.
You argue that the Left has failed to understand the magnitude of the concentration problem. Why have they missed it?
The Left has focused on other things, like after-the-fact taxation. I agree we should have wealth taxes and the rich should pay their share, but that’s not ambitious enough. We should not accept that these companies make money by effectively stealing from workers and producers. Also, the Left has bought into a consumer model. In the book I talk about the danger of seeing our central role as consumers as opposed to citizens. Instead of organizing boycotts, we should talk about certain corporations as illegitimate.
You say your goal is to reach a “moral economy.” What does that look like?
For starters, markets without profit maximization being their driving ideology. I’m also talking about financialization, which is the power behind monopolies. Warren Buffet was once asked what’s the best business to invest in and he said “monopolies!” So embracing markets that allow businesses to pay their workers decently instead of markets that drive towards sucking every penny out of workers and giving them to shareholders. People should have autonomy in their work lives. For many that will still mean working for someone else, but you have autonomy if you know you can get another job.
You call that the “Fuck off economy.”
Exactly. You’re like, “OK, I’m choosing this job. It kind of sucks but if I wanted to, I could say ‘fuck off.’” That changes every interaction with your boss. Business owners should also have autonomy. I know a lot of small business owners and some want to maximize profit but some don’t. A moral economy is one where they can say, “I want to make enough profit where I can take a few weeks vacation and treat my workers well. But I don’t want to feel like I’ve succeeded only when I’ve squeezed everybody that I’m engaged with to the maximum degree.” Which is what our current system pushes them to do.