For more than half a century, no politician of note has run on the issue of fighting corporate monopolies. Indeed, the very term “corporate monopoly” would have sounded almost as archaic as “free silver” coming out of the mouth of any political candidate until very recently. But that has begun to change, as the damage that industry consolidation is doing to the overall economy and the lives and livelihoods of individual Americans has become more and more apparent.
In 2014, two law professors little known to the general public, Zephyr Teachout and Tim Wu, ran a quixotic primary challenge to New York’s powerful governor, Andrew Cuomo, and his hand-picked candidate for lieutenant governor, Kathy Hochul, in part by stressing anti-monopoly policies. Despite little money and overwhelming odds, Teachout and Wu surprisingly garnered more than a third of the vote. Then last summer, Massachusetts Senator Elizabeth Warren gave a high-profile address on the dangers of industry consolidation that we at the Washington Monthly predicted (perhaps with more hope than prescience) could “change the course of the presidential contest.” It didn’t, but in the final weeks of the campaign Hillary Clinton did give a speech that included similar arguments, as did Donald Trump.
The anti-monopoly idea is now getting its most serious political road test yet by Tom Perriello, who is running for governor of Virginia. (He faces Lieutenant Governor Ralph Northam in a June 13 Democratic primary.) A former diplomat and think tank scholar who hails from central Virginia, Perriello represented the state’s GOP-leaning Fifth District in the U.S. House of Representatives from 2009 to 2011. During his one term in Congress, he sponsored the Health Insurance Industry Fair Competition Act, which would have eliminated an anti-trust exemption that industry has enjoyed since 1945. He lost reelection after voting for Obamacare. Perriello recently spoke to Washington Monthly web editor Martin Longman. Here is an edited version of that interview.
WM: When you were in Congress, why was eliminating the health insurance industry’s antitrust exemption such a priority for you?
TP: Antitrust protections for the insurance companies had been intentionally provided as a temporary stopgap and no longer have much of a justification. This was about getting back to what had been a core American principle for a long time—competition. To me, removing antitrust protection was something that actually could appeal across the aisle even at a very divided time, which you saw with the success of the act [it passed 406–19]. And then it was stripped out in the Senate, because that’s where there is the greatest convergence of concentrated and consolidated economic power.
WM: So, do you see the antitrust issue as one that both Democrats and Republicans can rally around?
TP: One of the problems we have in American politics is we are so divided on partisan lines that we accept this false binary that the only divide in American politics is Republican versus Democrat. But when it comes to corporate accountability or the idea of challenging monopoly or consolidation of power, there are deeply progressive strands across the political spectrum, and we saw that in that case. And, frankly, there are deeply pro-consolidation strands in both political parties. That was certainly one of those issues that reflected a sentiment in my district, where frankly you could even get Tea Partiers and the Obama coalition to be on board.
WM: You’ve been campaigning on this anti-monopoly theme all over the state, from the D.C. suburbs of northern Virginia to small Appalachian towns in southwestern Virginia. Are these really issues that voters are already thinking about and asking questions about?
TP: I actually think in many ways the challenge is people inside the Beltway having too low of an opinion about the sophistication and knowledge of people outside the Beltway. What will often happen to me on a given day is that I will start the day out in a red county, where people are talking to me about consolidation and automation, and then end the day inside the Beltway talking to people who say, “Tom, you sound like a think tank, that kind of thing will never go down with those people out there.” So I think that if we could actually get folks to sit down together, those inside the Beltway could really understand again, this is something voters across the Commonwealth are talking about because they are living the experience.
WM: You mentioned automation. How do you talk to voters about that?
TP: Automation has killed more coal jobs than natural gas has, so it’s not hard to have a conversation in southwestern Virginia about the impacts of automation. Because automation is a factor that, frankly, has hurt the small and medium-sized towns far more than it has the core blue parts of the state. During the Clinton recovery, 70 percent of new businesses were created in small and medium-sized towns and counties. During the recent recovery, it was only 17 percent in medium-sized [towns], zero percent in small towns and counties. So it’s not surprising that those people living in those areas get this and want to talk about it. What’s challenging is trying to talk about it without demagoguing it, because automation, of course, is something that is improving our lives in countless ways, and I think this is a question about whether we can acknowledge the realities of these trends and then figure out where we can push back and where we can’t. Twenty-five years ago, when globalization was the big challenge, the pundits tried to label any critics of the path we were on as “anti-globalization.” And that was a ridiculous label for those of us who were raising questions. Globalization was a reality, not something to be for or against. It was something to understand as a baseline reality and then ask the question, “How do we make sure that this process actually works for people and not just the powerful?” Automation and consolidation are those dynamics on steroids, because they are going to hit far more sectors of the economy, and far more strata socioeconomically.
WM: So should we approach automation and consolidation the same way, or differently?
TP: Consolidation is something we can be more implicitly against. Not in absolute terms, but we don’t have to take it for granted. At the strongest points in America’s economic past, and particularly when the middle class was strongest, we took anti-monopoly seriously. This is a choice. We can choose to essentially allow a smaller and smaller number of companies to control sector after sector, or we can push back. For example, we have had this incredible flourishing of microbreweries across the country. Before, the big brewing companies had 95 percent ownership of the beer market—now it’s 86 percent. So we’re not even talking about destroying these companies;
they are still massively overrepresented. We are just talking about a little bit of space for Main Street to breathe.
WM: How do you envision using the powers of the governor to take on consolidation?
TP: There is certainly room for us to be looking at antitrust enforcement, but I think there are also a number of other areas that are promising. One is challenging the electric utility monopolies to modernize their business model from a command-and-control last-century approach to distributed energy production. Because this is crucial for protecting our environment and climate, but also for giving a lot more space for communities and smaller business to see a bigger part of the energy economy. There is additional room for that in the areas of local food production and consumer production of some goods and services. We were talking to a small welding business that has developed an apprenticeship program for those who served their time in prison and are trying to find a second chance in the economy. People come out of the program with great marketable skills. If local and state contracting included a greater advantage for local production in the bidding process, we would all end up saving a ton of money, because you could greatly expand the amount of trade work to be done locally, and if the job keeps that person from going back to prison at a cost to the taxpayer of nearly $30,000, versus making $30,000-plus a year and paying taxes, that small advantage for locally produced and manufactured goods starts to look like a pretty good investment.
WM: Looking beyond your own race, how would you advise Democrats elsewhere to run and win in communities where they lost so badly in the last election?
TP: We need to stand for an American dream that is redesigned for a very different economy, one that includes the triple threats of globalization, consolidation, and automation. And in order to do that, we’re going to have to make sure that small and local businesses have a shot. We are going to have to make sure that our education and workforce training reflect those realities, which is why we proposed going from a K–12 system to a P–14 system that includes at least two years of debt-free trade school, apprenticeship program, or community college. And we need to recognize that the tax-and-spend Republicanism of the past is not something we can afford, where they raise our taxes and spend it on prisons instead of prevention. We can’t have tax reforms that actually accelerate anti-growth consolidation instead of investing in pro-growth middle-class economics. Ultimately, I think people do feel like both parties have left some regions and sectors behind, and we need to have a pretty smart strategy. We need to show up, listen, and have something to say.