Meet the New Trustbusters

These 2020 Democratic contenders want to take on modern monopolies. Will voters get behind them?

This much can be said for Democrats heading into 2020: if their candidate manages to defeat Donald Trump, the new president will enter the White House having promised the boldest domestic policy agenda in more than a generation. At least six presidential hopefuls are all in on single-payer; an overlapping set of six cosponsored the Green New Deal legislation; and three have even said they support reparations for slavery.

But while these proposals may help curry favor with the left, they don’t squarely address what was arguably Hillary Clinton’s biggest substantive weakness in 2016: the inability to offer a compelling alternative to Trump’s hateful and mendacious argument about the origins of American middle-class decline. The party is still haunted by the memory of a candidate who didn’t have a way to explain the broad sense that economic opportunity for average people has been shrinking for decades, nor a realistic plan for what to do about it. In that vacuum, Trump’s crude xenophobia spread easily.

That’s not to say, however, that the present Democratic field is bereft of such an idea. It turns out that three of the leading presidential hopefuls—Elizabeth Warren, Cory Booker, and Amy Klobuchar—already have their arms around a concept that both makes sense of voters’ economic frustrations and provides a blueprint for a future administration to start reversing the rising tide of inequality: fighting corporate monopoly.

It’s a concept that might sound (other than to faithful readers of this magazine) like a relic from a bygone era; in 1912, Woodrow Wilson and Theodore Roosevelt competed over who would most aggressively confront the oligarchs of the era. But what’s old is new again. We are living in a moment in which ownership of the American economy, along with the global economy, is more highly concentrated than at any time since the original Gilded Age. Four airlines control our skies, one of three national chains probably owns your corner pharmacy, and one tech giant accounts for half of all e-commerce and a third of all cloud storage. This is more or less the direct result of the abandonment of antitrust enforcement beginning in the 1970s and the resulting four decades of ever-increasing mergers and acquisitions. 

It stands to reason that the concentration of corporate power would go hand in hand with the concentration of wealth. And indeed, economists have recently connected the dots between the rise of new monopolies and the staggering rise in inequality over the same time period. With less competition, monopoly firms can charge higher prices and funnel the money back to their own shareholders and executives, rather than giving workers a raise or investing in innovation. Fewer companies also means that workers are at the mercy of fewer employers, headquartered in fewer cities. All in all, the clustering of corporate power goes a long way to explaining the clustering of wealth and opportunity among the top 1 percent. 

The anti-monopoly issue offers a way to unite the warring tribes of socialist and liberal, leftist and centrist. You don’t have to be antibusiness to be anti-monopolist.

Two thousand twenty is unlikely to be a replay of 1912, but there are indications that at least some presidential contenders will make the anti-monopoly issue a featured part of their campaigns. Warren has already changed the race by proposing to break up Amazon, Apple, Facebook, and Google. As the first big candidate to offer a substantive—and splashy—economic plan, Warren thrust monopolies into the conversation early, all but assuring that antitrust will be a topic in the Democratic primary debates. 

If the issue continues to gain traction, it could offer a way to unite the warring tribes of socialist and liberal, leftist and centrist. You don’t have to be antibusiness to be anti-monopolist. The Green New Deal has a provision that calls for “ensuring a commercial environment where every businessperson is free from unfair competition and domination by domestic or international monopolies.” Alexandria Ocasio-Cortez has tweeted about the threat that tech monopolies like Google and Facebook pose to journalism. Even Bernie Sanders has lately gotten on board. In March, he unveiled his plan for rural America during his first campaign rally in Iowa. One of his main proposals was to enforce antitrust laws against consolidated corporate agribusiness. 

The forces of monopoly have been kicking the American people’s asses for four decades. If any of the would-be trustbusters earns the nomination, 2020 could be the year when the Democratic Party finally starts to fight back. 

The first major Democrat to jump into the 2020 race was also the first to talk publicly about the threat of modern monopolies. A former Harvard Law professor, Elizabeth Warren cut her progressive teeth thinking of ways to limit the power of corporations and financial institutions to hurt the little guy—most notably, coming up with the idea for the Consumer Financial Protection Bureau in 2007. Warren’s interest in the structural causes of unfair economic outcomes—an interest that, in its wonkish intensity, distinguishes her from most of her Senate colleagues—eventually brought her to the demise of antitrust enforcement and the increase in corporate concentration. 

In early 2016, Warren’s team reached out to a Yale Law student named Lina Khan, who was already making a name for herself in academic circles by questioning the founding assumptions of modern antitrust law, which is based on a quasi-religious faith that mergers lead to efficiencies that lead to lower prices and thus must never be questioned. That led to a dinner meeting in Washington, D.C., between Warren, Khan, and Khan’s former boss, Barry Lynn, the head of Open Markets, an anti-monopoly organization then based at New America. (Today it’s an independent think tank called the Open Markets Institute.) In June 2016, Warren came to New America to give a speech on the issue, becoming the first national elected official to address the monopoly problem in generations. Widespread consolidation, Warren declared, was “hiding in plain sight all across the American economy.”

In March, Elizabeth Warren held a campaign event at the site of Amazon’s aborted New York campus, where she rolled out a regulatory plan to break up tech giants like Amazon, Apple, Facebook, and Google.

Warren has since remained the most consistent national voice speaking out about the effects of monopoly power—including the way it distorts democracy—and the government’s failure to restrain it. She was as harsh on Barack Obama as on George W. Bush; while Bush set the record for the fewest antitrust cases brought to trial by any president in American history, Obama wasn’t far behind. Indeed, when congressional Democrats unveiled their Better Deal platform in 2017, with Warren standing beside Chuck Schumer and Nancy Pelosi, it included rare implicit rebuke. “In recent years,” the document said, “antitrust regulators have been unable or unwilling to pursue complaints about anti-competitive conduct.” 

In the Senate, Warren scored a modest achievement by shepherding a bill through Congress that made hearing aids available over the counter. The previous FDA regulations were helping to artificially inflate the price of hearing aids, which typically cost thousands of dollars—fattening the profit margin of the highly concentrated hearing aid industry. The measure, which passed by a vote of 94–1, could help new, smaller competitors break into the sector and offer lower-priced alternatives.

Warren’s greatest contribution so far to the anti-monopoly cause is her role in bringing it from the periphery of American politics to something approaching the mainstream. In her official announcement on February 9, she pledged to “break up monopolies when they choke off competition.” And in March, she held a campaign event in Long Island City—the site of Amazon’s aborted New York campus—where she rolled out her regulatory plan to break up big tech. If taking on tech monopolies remains part of her stump speech, it will elevate the issue even more. 

Cory Booker grew up in northern New Jersey, the most densely populated slice of the most densely populated state in the country. Before becoming a U.S. senator, he served as the mayor of Newark, the state’s biggest city. So it makes sense that his entry point into anti-monopoly politics would be . . . farming? 

Joe Maxwell, the former lieutenant governor of Missouri, now directs the Organization for Competitive Markets, a nonprofit that advocates against Big Ag. He approached Booker in early 2018. While it’s better known for its boardwalks, beaches, and spray tans, South Jersey is an important producer of fruit. Maxwell believed he could get Booker, a member of the Senate antitrust subcommittee, to understand that agribusiness mergers threatened farmers in his home state and around the country. 

In July 2018, Maxwell took Booker on a tour through the rural Midwest, meeting with the president of the Illinois Farmers Union, a cattle rancher in Missouri, and residents of rural, farming-dependent communities. It seems to have done the trick. One month later, Booker introduced legislation in the Senate to place an eighteen-month moratorium on mergers between large agribusiness, food and beverage manufacturers, and grocery retailers. 

Shortly after, in October 2018, Booker gave a speech at Open Markets—a seeming rite of passage for the new crop of aspiring trustbusters—laying out what he’d learned about the rampant monopolization of American food production. “Today just a small number of giant companies control every single link of the American food chain,” he said. “The farmer’s share of every retail dollar has plummeted . . . and small family farmers are being driven to bankruptcy.” (Sanders made many of the same points in his speech to Iowa farmers last March.)

If Booker’s listening tour helped him understand the plight of America’s small farmers, he also had a more personal connection to the monopoly issue. As he was working with staff on the draft of the speech, an aide gave him a 2017 Washington Monthly story titled “The Decline of Black Businesses,” which detailed the way the conglomerate Service Corporation International was eating up small family-owned black funeral homes. The National Funeral Directors and Morticians Association, which represents black funeral directors, had seen its membership decrease by 40 percent since 1997. That was a revelation to Booker, whose father grew up in Jim Crow–era North Carolina. “When he didn’t have any family to take care of him, he was taken in and raised by another family,” Booker said in his Open Markets speech. “Who was the family? They were running a successful black funeral home.”

The upshot was clear: Thanks to the demise of independent black-owned businesses, Booker’s father, had he been growing up in today’s America, might have had nowhere to turn. Booker’s candidacy could test the extent to which the anti-monopoly argument can resonate with constituencies that, on the surface, have little in common, from African Americans in big cities to rural farmers. 

If Warren has done the most to talk the talk, Amy Klobuchar has a claim to walking the walk. In September 2017, the Minnesota senator and ranking Democratic member of the Senate antitrust subcommittee introduced two of the most significant antitrust bills in decades. (Cory Booker was a cosponsor, as was fellow 2020 hopeful Kirsten Gillibrand.) One would give the federal monopoly-fighting agencies greater leverage to block anticompetitive mergers under existing law. The other would amend the main federal antitrust law to prohibit mergers that created “monopsonies,” or market situations in which there is only one buyer. Other provisions in the bills would require companies that enter a settlement agreement with the Federal Trade Commission to make the details of that agreement public and would create a size threshold that determined when an acquisition would hurt competition. 

According to Michael Kades, the director of markets and competition policy at the Washington Center for Equitable Growth, Klobuchar learned from her perch as the Democrats’ ranking member on the Senate’s antitrust subcommittee that more needed to be done to thwart the surge in industry consolidation. Kades, who served as an expert for the panel’s Democrats starting in 2015, worked on the bills for Klobuchar. 

Eventually, Klobuchar started toying with ways to make her antitrust agenda appeal to younger voters. In a March 2017 speech at the Center for American Progress, Klobuchar found a relatable example of the way in which competition spurs innovation: beer. “For years, there were a few dominant breweries, and they all sold similar mass market beer,” she explained. But the craft beer explosion has forced brewers to compete by producing more variety and higher-quality beer. “Our goal is to make antitrust cool again,” she told the crowd. At an event this past March, she returned to the theme. The problem of monopoly power, she said, “has to become part of the political dialogue. I’m hoping it will in this 2020 election.” 

It’s early. The jury is still very much out on whether antitrust will remain front and center throughout the campaign. But Klobuchar, like Warren and Booker, has made it clear that if she ends up in the White House, corporate monopolies will have something to worry about. 

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Eric Cortellessa

Eric Cortellessa is the digital editor of the Washington Monthly.