Political/economy is who gets what, and who pays the price. We forget this adage at our own peril.
The wealthy and the corporations they own have captured our government and are imposing on us the policies that benefit them. Contrary to free market ideologues, markets aren’t organic, they’re created by governments. The important question is how they’re organized and who they benefit.
The US economy is organized under the auspices of neoliberalism, resulting in the unchecked reach of huge multinational corporations into every aspect of our lives. We’ve already discussed how privatization of the commons has helped create this new semi-feudal economy.
Another front in the neoliberal assault on the US economy has been the evisceration of antitrust laws. New Deal reforms brought about antitrust laws to force corporations to act in the public interest. Antitrust laws were a political solution to the corporate monopolies that made life so pernicious for Americans prior to the 1930’s. But, the wealthy hated any sort of check on their power and it was only a matter of time before these laws were subverted.
Matt Stoller, former Senior Policy Advisor to Congressman Alan Grayson, lays out the grisly details.
“In the 1980s, an intellectual revolution took hold. Corporations were no longer private governments. They became property. They weren’t political entities, but economic entities pursuing ‘efficiency’. Corporations exist only for shareholder benefit. This idea was radical. Prior to this, few thought large shareholders were the only stakeholders, or even the most important ones. Eliminating all other interests – workers, managers, customers, communities, national security, small shareholders – was truly radical.”
These were political decisions carried out by neoliberal ideologues and the transformation of American economic life has been truly radical. Maximizing shareholder value and focusing on corporate efficiency led directly to the rampant inequality, layoffs, offshoring, monopolies and oligopolies that are such a part of modern America economic life.
Before the neoliberal intellectual revolution, corporations were forced to compete in a regulated environment where they had to spend money on research and development, rather than just acquire smaller competitors, then lay off their workers.
If all we care about is economic efficiency and shareholder value then monopolies are inevitable because monopolies are efficient and they’re profitable for shareholders. They are not, however, beneficial to we-the-people. Examining the ownership of stock in the US illustrates which class benefits from the ideology of shareholder value.
It’s frustrating that Americans seem to have forgotten economic realities their grandparents understood implicitly. New Deal reforms that included antitrust statutes were achieved only after a ferocious struggle, including labor strife and political tumult. Antitrust efforts were accompanied by labor reforms that allowed workers to organize and bargain collectively, as a way of balancing corporate power.
And yet, here we are, the next Gilded Age hard upon us. Corporations have more rights than we do. You know it and I know it. As Mittens explained to us in that infamous rebuke to a heckler, corporations really are people. Except, they’re extra-special, super-powerful people who can never die. Yeah, except for that, just like you and I.
At one point in American history, corporations were chartered to perform specific tasks. Of course, we’re not going back to that reality, but corporations require regulations, including antitrust laws to protect us from them.
We are bombarded daily with horror stories of government overreach. Despite this non-stop propaganda, its pretty clear that corporations, not government, maintains the whip hand.
But I gotta ask. Is our new economy dominated by powerful corporations really what we want?
If not, then we better get busy. A good place to start is antitrust. Matt Stoller explains that antitrust laws are still there, waiting to be dusted off and deployed.
“Most of the laws that forced this state of affairs are still on the books. The were just reinterpreted by Reagan. Any President can simply go back to the pre-1981 model through executive action. Every merger is still reviewed by DOJ.”