PAUL HENNESSY/AP PHOTO
Amazon’s city-sized warehouses are a symbol of the increasing economic and political power of large corporations.
Liberty From All Masters: The New American Autocracy vs. the Will of the People
By Barry C. Lynn
St. Martin’s Press
Break ’Em Up: Recovering Our Freedom From Big Ag, Big Tech, and Big Money
By Zephyr Teachout
All Points
Though it may be difficult for young readers to believe, there was a time when Americans turned to academics for guidance on great social questions. For most of the 20th century, whole disciplines vied with each other hoping to lay claim to the Great Theorist of the Age. John Kenneth Galbraith and Milton Friedman became household names from the realm of economics, while philosophy departments held up John Rawls and Robert Nozick. Historians Arthur M. Schlesinger Jr. and Richard Hofstadter offered not only accounts of social movements and political figures, but sweeping theories of America, the state, and history itself. Even political science, a field now bedraggled by statistical regressions to nowhere, once grappled with grand ideas, arming democratic theorist Robert Dahl for intellectual combat with radical sociologists Floyd Hunter and C. Wright Mills.
The great intellectual clashes of this era all had to do with power. In 1953, Hunter, a little-known sociologist at the University of North Carolina, published Community Power Structure, a dry book with a dry title that sent shock waves through the academy. Studying the city of Atlanta’s informal policymaking process, Hunter concluded that while the city was officially governed by elected officials, a narrow clique of corporate leaders controlled the agenda. Much of what voters cared about—better housing or a higher minimum wage—never came up. Instead, city government was focused on policies that boosted returns on real estate assets and increased revenues for downtown retailers.
Three years later, Mills reached a similar conclusion in The Power Elite—the rich were running the show. Hunter and Mills were not Marxists in any traditional sense, but their books presented nuanced reformulations of the old Marxist idea that the state was controlled by capitalists who exploited the political apparatus to further their own interests. The reforms of the New Deal era had strained that idea, but Hunter and Mills sought to demonstrate that in the postwar world, American democracy was not so democratic as it seemed.
They were right. But their ideas steadily fell out of favor in the years following Robert Dahl’s 1961 study Who Governs? Dahl concluded that despite a few imperfections, elected leaders really did respond to public concerns. There were special interests, of course, with unjustified levels of influence over the political process, but there were a lot of them, and no particular group controlled the overall agenda. It was elected leaders, surveying this plurality of interests, who exercised real power in the American system, which was, all things considered, a pretty healthy and democratic way of organizing a society.
Dahl was wrong, and subsequent critics—most notably G. William Domhoff—persuasively demonstrated that he had misunderstood his own study. But his ideas were perfectly attuned for a new age of American ideas just over the horizon.
By the 1980s, all this talk of power had been buried by a new faith in the genius of financial markets. Public demand for great questions about the way of things dried up. Everyone already knew the answers. Growth and efficiency were the correct goals and intellectual justifications; their absence the ultimate indictment.
The high era of American political theory came to a close. We had entered the Age of the Economist, but a peculiar sort of economist who explicitly eschewed the significance of social ideas and of power. New Jerusalem would be built from mathematics alone, its temples constructed of algebra. What seemed to the untrained mind like a festering social problem was, to the learned economist, merely a passing flaw soon to be perfected. Everything would work out fine, by definition.
The financial crisis of 2008 demolished this thinking, along with much else. The intellectual contest to define our current era has been live for some time now, and the most politically effective school of thought to emerge so far has been anti-monopolism. In Washington, the fruits of its labors are everywhere, from the Trump administration’s blockbuster antitrust suit against Google to a devastating 16-month Big Tech investigation by House Democrats that concluded Google, Apple, Amazon, and Facebook are actively “undermining both political and economic liberties.” Beyond the Beltway, millions of people who have always hated Facebook can now enjoy a sophisticated canon detailing why, exactly, they should.
Teachout and Lynn show how today’s monopolists often simply bypass official mechanisms of democracy to issue their own edicts about who can conduct what activity on what terms.
TWO NEW ENTRIES in that corpus demand our attention: Liberty From All Masters, authored by anti-monopoly ringleader Barry Lynn, and Break ’Em Up, the latest book from progressive law professor and New York political agitator Zephyr Teachout. Along with recent works from Matt Stoller and Prospect executive editor David Dayen, Lynn and Teachout have reinvigorated the public debate around the relationship between public and private power in America that raged for much of the 20th century.
For Lynn and Teachout, the most pressing evil among us is the tech platforms—Silicon Valley behemoths that do not merely connect individuals or collect data, but order digital life and commerce. The trouble with Facebook, Google, and Amazon is not measured in excessive profits or consumer prices, but in the way they each create independent systems of power insulated from public accountability.
“Monopoly,” Teachout writes, “is a rival form of government burrowing its way into democratic government.” Where Mills and Hunter detailed the way that midcentury corporate elites corralled public officials into doing their bidding, Teachout and Lynn show how today’s monopolists often simply bypass official mechanisms of democracy to issue their own edicts about who can conduct what activity on what terms.
Amazon, for instance, is not merely a portal for customers but a warehouse business, shipping network, payment processing platform, data server operation, and even advertising arena that can require separate terms for each one of these aspects of its operation. The rules it imposes on its third-party sellers—the retailers responsible for most of the actual goods that move through Amazon—frequently change, and sellers must also abide by an extra set of unwritten standards. Without buying advertising space from Amazon or agreeing to use Amazon’s shipping service, for instance, many sellers report that their products are functionally erased from Amazon’s search results. If they complain, Amazon withholds its private infrastructure. When the book publisher Hachette objected to the terms of an Amazon contract, Amazon imposed a two-week shipping delay on the delivery of Hachette’s books to consumers.
Even seasoned Big Tech critics will learn much from the abusive practices detailed in Teachout’s book. In her telling, Big Tech companies are not so much internet businesses as federal regulators and public utilities. As Mark Zuckerberg put it, “In a lot of ways Facebook is more like a government than a traditional company.”
For all the horrors that Lynn and Teachout present, they both resist the nihilistic determinism that other students of power often fall prey to. If the rich control the government, after all, how can the tools of government ever be turned against them? For Lynn and Teachout, the rise of today’s monopolies is not woven into the fabric of capitalism. It is a relatively recent phenomenon, created by specific policies and a particularly lax attitude about antitrust laws. Bringing monopolies to heel is merely a matter of the government and the public waking up to what is happening.
As descriptions of what has gone wrong in the digital economy and a prescription for what ails it, Break ’Em Up and Liberty From All Masters ring true. Both books are punchy and accessible. Lynn writes with the flair of a seasoned business journalist; Teachout with the rhetorical fire of an effective activist.
But Lynn seeks to be more than our guide through the present digital hell; in Liberty From All Masters, he offers an intellectual history of the United States, a comprehensive critique of the Age of the Economist, and a top-to-bottom theory of political economy. These are ambitious projects, and Lynn stumbles on occasion. Important aspects of his historical narrative are wrong. Perhaps more importantly, by claiming to call back an age-old American system of thought, Lynn sells short his own creativity. For better and for worse, Liberty From All Masters is in fact a new intellectual cocktail, mixing left-wing ideas about democratic management with right-wing ideas about the virtues of the market. The political potency of this combination is evident in the anti-monopoly takeover of Washington intellectualism, but its appeal as a fundamental theory of democracy is less apparent.
The Boston Tea Party was not merely a tax revolt, but an attack on the undemocratic power of the East India Company.
Lynn’s story begins with the American Revolution, where he offers a timely and overlooked reminder that the Boston Tea Party was not merely a tax revolt, but an attack on the undemocratic power of the East India Company. He then traces discomfort with concentrations of power, both public and private, that runs through key American political disputes since America’s founding. Franklin Delano Roosevelt, in Lynn’s telling, was not inventing a new system of government, as Ira Katznelson argued in Fear Itself, but refining a set of broadly shared American principles.
The narrative picks up steam in the 1980s with the emergence of neoliberalism as a political force. The “overthrow of America’s system of antimonopoly law,” Lynn writes, was “the single most important act of neoliberal sabotage,” as politicians in both parties fell “under the thrall of radical right-wing and left-wing philosophies.” This bred a cancer on the body politic. “It’s vital to understand that monopoly is not one of many economic problems but rather the political economic problem of our time.”
The connection between the political right and neoliberalism is well understood—Quinn Slobodian, Angus Burgin, and Daniel Stedman Jones have all written thorough, readable accounts of different aspects of the history. Lynn’s claim that the radical left was a key contributor to the development of neoliberalism is innovative, but wrong. The centrist Democratic Party of Bill Clinton and the Democratic Leadership Council was beguiled by neoliberalism—but not the radical left, which organized enormous protests against key neoliberal initiatives such as World Trade Organization treaties and opposed deregulation generally.
Lynn’s Exhibit A is John Kenneth Galbraith, the most influential left-liberal economist at midcentury and a well-documented antitrust skeptic. “Here his hatred was virulent,” Lynn writes, citing Galbraith’s 1973 book Economics and the Public Purpose as a kind of coming-out party for his radical monopoly-friendly views. In Lynn’s telling, Galbraith’s influence extended to Ralph Nader and Robert Reich, infecting the Democratic Party and fueling the Clinton administration’s turn to NAFTA and bank deregulation.
Moreover, what Galbraith wrote in Economics and the Public Purpose is more closely aligned with Lynn’s own views than he acknowledges. “The antitrust laws are now eighty years old,” Galbraith wrote. “Nothing has yet happened to arrest the development and burgeoning power” of big business. “What might be dangerous agitation for effective regulatory action or for public ownership or socialism comes out safely as a demand that the antitrust laws be enforced.”
Antitrust, in other words, was not enough, and led to a dangerous complacency about other potential remedies. When he criticized antitrust laws, Galbraith was attacking a narrow conception of antitrust action—breaking up companies and blocking mergers—in favor of a more comprehensive governing regime that included regulatory action and public ownership. These are remedies that Lynn himself discusses as appropriate political responses to monopoly power.
Nor were Galbraith’s ideas about antitrust new in the 1970s. In American Capitalism (1952) and The New Industrial State (1967), Galbraith assumed that big industrial conglomerates were here to stay, arguing that they might be turned to public purposes with the countervailing powers of trade unions and the democratic state. And perhaps most importantly, by the time neoliberalism achieved its political ascendance, Galbraith’s ideas were out of fashion. His portrait of 20th-century capitalism largely missed the financial reorganizations of the late 1970s and 1980s, and by the Clinton years, top administration economists were not only invoking his archrival Milton Friedman, but openly mocking Galbraith in books and speeches.
The important point is that neoliberalism was not, as Lynn suggests, a triumph of the radical extremes over the reasonable center. It was a thorough right-wing intellectual conquest of both parties.
Monopolists are useful political symbols; the cartoonish behavior of men like Mark Zuckerberg and Jeff Bezos helps crystallize the injustices of an economy system that creates vast inequality.
NEOLIBERALISM BEGAN its takeover of American ideas and politics in the late 1970s. Its evils soon began to exhibit themselves in the form of wage stagnation and surging economic inequality. American households were feeling this sting long before what Lynn calls the first stage of monopolization began in the late 1990s, and far earlier than the Silicon Valley explosion of the 21st century.
Lynn deserves credit for identifying monopoly as a key and particularly dangerous feature of neoliberalism—but it is not the ultimate essence of the beast. If we cannot slay the neoliberal dragon with an arrow to its soft monopoly underbelly, then monopoly is not, in fact, the single political economy problem of our time.
My own view is that neoliberalism is best understood as the financialization of public life, and that financialization breeds, among other things, monopoly. The good news here is that all of Lynn’s anti-monopoly proposals—breakups, regulation, nationalization—are effective tools for fighting financialization. We know this because, as Lynn notes, they were key features of the New Deal, which not only stymied the financialization of the Roaring Twenties, but created the basis for an economy grounded in production rather than speculation.
This is a left-liberal critique. But even lefties and liberals uncomfortable with Lynn’s political hybrid can recognize that it is bearing fruit. Monopolists are indeed powerful barriers to progress in America today, and the anti-monopolists have turned the intellectual tide against them in Washington. This is in no small degree a product of the conservative currents running through the project, particularly Lynn’s faith that markets can work beautifully once we purge them of the monopoly men. Lynn, who heads the Open Markets Institute, has even recruited some conservative allies to his antitrust project, such as Missouri Republican Sen. Josh Hawley.
Consider Lynn’s praise for Friedrich Hayek, the Austrian economist and founder of the Mont Pelerin Society, which coined the term “neoliberal.” Lynn lauds Hayek’s depiction of the price system as an information distribution network that can alert the public to social problems.
“Market prices,” Lynn writes, “allow the public … to take political action, if they think it necessary, to address the reason why a particular good is in short supply or oversupply.” When we see that the price of a particular good remains elevated, we recognize that there is something amiss and begin to investigate. “The public price … plays a major role in making the public the public,” Lynn adds.
This is a deeply conservative conception of the market and indeed the public itself. John Maynard Keynes, for instance, devoted a great deal of time and energy to discrediting the idea that prices convey all meaningful information about public needs and wants. If market prices are largely determined, as Keynes argued, by uncertain views about the future, then they cannot tell us much of anything about what is really happening on the ground—only what people expect to come. Market failures are ubiquitous and not merely a product of bigness, as any student of the environment, labor, or financial crisis can attest.
Monopolists are useful political symbols; the cartoonish behavior of men like Zuckerberg and Jeff Bezos helps crystallize the injustices of an economy system that creates vast inequality. But there are limits to the democratic power of anti-monopolism. People vote on household problems like child care, health care, and unemployment. Convincing them that the market will tend to these needs once the monopolists are tamed seems like a roundabout electoral project at best, with the important exception of farm country, where households are not only workers but producers who bristle daily at the predations of financial and agricultural monopolies.
A political theory that claims John Kenneth Galbraith as a father of neoliberalism and Friedrich Hayek as an antidote needs some work. But you would be hard-pressed to identify a single Capitol Hill staffer who is interested in any of these objections. Even top Democratic policy hands now accept the premise that markets will work just fine if purged of a few imperfections. Much of anti-monopolism’s new appeal among the nation’s power brokers is a result of its concessions to the American right. Lynn’s story about reviving True Capitalism may not hold up, but if it can persuade Washington to rid us of Silicon Valley’s robber barons, few will hold his history against him.
