I've been studying these issues since the late 1970s.
Having investigated antitrust violations as a young Senate aide, journalist and paralegal, I commend Prof. Wu.
Listen to this wise man. Prof. Wu speaks truth to power -- he speaks the truth about criminal antirust lawbreakers.
Ignore the soulless screwy scholar-squirrels like the late Milton Handler, Milton Friedman and Robert Bork. Greedy businessmen have proved that these three cartelists did not know any more about monopoly law and economics than a hog.
Economic concentration is as clear and present danger to the American way of life.
From The New York Times:
A Look at Competition in Business Urges Us to Think Small
Alessandra Montalto/The New York Times
These are fraught times, and while you may be scared, Tim Wu suggests that you may not be scared enough. Like Michael Lewis’s “The Fifth Risk,” a recent book that shows how something most people don’t spend a lot of time thinking about — government bureaucracy — is consequential (and potentially terrifying), Wu’s “The Curse of Bigness: Antitrust in the New Gilded Age” is a surprisingly rousing treatment of another presumably boring subject: mergers and acquisitions.
Wu, a professor at Columbia Law School and a contributing opinion writer for The New York Times, argues that the M&A arcana that lawyers and economists haggle over have effects that spill far beyond their rarefied areas of expertise. “Extreme economic concentration yields gross inequality and material suffering, feeding an appetite for nationalistic and extremist leadership,” he writes, by way of introduction and warning. “The road to fascism and dictatorship is paved with failures of economic policy to serve the needs of the general public.”
Unlike Wu’s previous books, “The Master Switch” (2010) and “The Attention Merchants” (2016), “The Curse of Bigness” is skinny, more of a dip with a snorkel than a deep dive. But the pithiness of this new volume is ideally suited to its subject. Wu doesn’t want to get into all the intricacies of antitrust law; if anything, an enormous book on the problem of enormity would only fool us into believing that the subject is more impenetrable than it really is — and stoke the confusion and apathy that have allowed decades of corporate consolidation to flourish in the first place.
Wu’s point is simple. Giant corporations, seeking to protect their advantage, try to turn their outsize economic power into political power. So to break their grip on American democracy, the government needs to break them up in turn. That this proposal might sound outrageously radical to certain ears is, Wu says, just one sign of how unprepared we are for our current moment. To show how busting up big businesses into smaller parts was once a veritable American tradition, he charts how antitrust law emerged in response to the grotesque inequality of the 19th-century Gilded Age.
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When the Sherman Antitrust Act was signed into law in 1890, it had unanimous support in the House, though the language it deployed was both sweeping and severe, stating bluntly that “every person who shall monopolize, or attempt to monopolize” any area of business “shall be deemed guilty of a felony.”
Enforcing the law turned out to be another matter. A decade later, J .P. Morgan — “history’s greatest monopolizer,” as Wu calls him — created the behemoth U. S. Steel by merging hundreds of smaller firms, even buying out his fellow tycoon Andrew Carnegie in 1901 for an exorbitant sum ($480 million back then) that would make Carnegie the richest man in the world.
Tim WuMiranda Sita
Wu is an able guide through the history — from Theodore Roosevelt’s campaign against “bad trusts” all the way to the expansive bloat of AT&T and Microsoft’s competition-crushing ambitions of more recent memory — but it’s on the level of ideas that his book comes into its own. Similar to the tech moguls of today, the monopolists of a century ago “liked to portray themselves as part of a progressive movement, striving toward a better age,” Wu writes, even if the endgame they were pursuing — essentially “pure economic autocracy” — was a direct rebuke to the foundational values of the republic.
But then competition can feel menacing — a grueling free-for-all that anyone with grand ambitions in business would prefer to do without. The venture capitalist Peter Thiel said as much in the pages of The Wall Street Journal in 2014, in an article with the piquant title “Competition Is for Losers.” “Capitalism and competition are opposites,” Thiel declared. “Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits.”
No doubt the most die-hard Marxist would agree — as would Thiel’s fellow disrupters in Silicon Valley, though they tend to play down the allure of profit-making while talking a lot about how much value and “connection” they bring to the public.
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Wu, who advised the Federal Trade Commission on competition issues during the Obama administration, doesn’t buy all the piety; nor should he or anyone have to, he says. Trying to distinguish between gigantic corporations that bring value to consumers from gigantic corporations that don’t is ultimately a mug’s game. Competition is a process, and the process should be protected; to fixate too much on the other stuff is to expect the legal system to make distinctions it isn’t equipped to make — pushing up the standard of proof and allowing enforcement to go slack.
But we’ve been conditioned to think that the only goal of antitrust law is to protect consumer welfare; as long as a business like, say, Amazon delivers lower prices on doodads for your home and diapers for your kid, it isn’t supposed to pose a monopoly threat, even as it gobbles up its competitors. This idea was once “considered absurd and even insane,” Wu writes. But its fiercest advocate, the rejected Supreme Court nominee Robert Bork, knew how to make it seductive to legal minds, offering a simple theory that allowed judges to make decisions with apparent precision and rigor. Explaining the theory’s journey from heresy to orthodoxy, Wu is gently scathing: “Bork’s antitrust economics are easy.”
Against Bork’s strictly minimalist idea, Wu advances another, more complex one, which was proposed in the early 20th century by the lawyer and eventual Supreme Court Justice Louis Brandeis. Worrying about the tendency of giant corporations to “exterminate” the competition in their inexorable march toward domination, Brandeis believed that the economy, and the businesses that are part of it, needed to operate at a human scale.
“What Brandeis really cared about was the economic conditions under which life is lived,” Wu writes, “and the effects of the economy on one’s character and on the nation’s soul.” It’s a big idea for a little book, but Wu knows how to keep everything concise and contained. “The Curse of Bigness” moves nimbly through the thicket, embracing the boons of being small.
Follow Jennifer Szalai on Twitter: @jenszalai.
The Curse of Bigness: Antitrust in the New Gilded Age
By Tim Wu
154 pages. Columbia Global Reports. $14.99.
By Tim Wu
154 pages. Columbia Global Reports. $14.99.
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