In this third and final part of his three-part series on the resurgence of antimonopoly, Matt Stoller explains how the election of Donald Trump helped bring antimonopoly thinking back to the forefront of the political discourse.

Louis D. Brandeis

In this third and final part of this series, I’m going to discuss the return of monopoly as an increasingly central political question in American and global politics. Why are so many political and business figures suddenly talking about monopoly power, not just in presidential debates, but all over the world?

In Part 1, I discussed the strange utopian vision animating the 1990s and early 2000s. That era was framed by the End of History, with Google as magic, Alan Greenspan as the Oracle, and New York Times columnist Thomas Friedman setting up a sophisticated rule of foreign policy which posited that countries with McDonald’s don’t go to war with one another. Blinded by utopian fervor, policymakers just stopped respecting the importance of making and distributing things. They set many time bombs in that moment without even realizing it (like the merger of Boeing and McDonnell Douglas, which I discuss here).

Yet, by the end of last year, that same Tom Friedman called for the break-up of Facebook and the redefinition of monopoly, as well as a more confrontational approach to China. In other words, the network of hedge fund managers, tech executives, politicians, bankers, and imaginary cab drivers with which Friedman socializes have altered their thinking. Why? What happened?

In Part 2 of this series, I described the crack-up. The war in Iraq generated profound distrust in American institutions, including the media, leading to the first modern social movement for an antimonopoly pricing rule: net neutrality. Then the financial crisis and the response by Bush and Obama crushed the legitimacy of the End of History narrative, sparking the Tea Party, Occupy Wall Street, and Black Lives Matter, as well as driving the Chinese to become far more aggressive in opposing Western liberalism. I also described how a small group at the Open Markets Institute began researching the impact of systemic monopolization that had occurred over the past forty years. But even so, at the end of the Obama era, the explosion of antimonopoly sentiment into the mainstream had not quite happened.

The key to understanding what came next is to get that antimonopolism is not a left-wing or right-wing type of politics—it is business reformism. It’s not some lefty crusade or right-wing attempt to seize power. Perhaps the strongest media voice on behalf of the new antimonopoly movement, for instance, has been The Economist, with the Financial Times, Wall Street Journal, and the New York Times doing substantial amounts of journalism and commentary around concentrated power. But everyone, from Tucker Carlson on Fox News to the left-wing The American Prospect, has become quite assertive on the policy. Many activists today assume they’ve always been stridently opposed to monopoly, which is weird because it’s a pretty new area.

The most important political figures in the return of antimonopoly politics are Elizabeth Warren and Donald Trump. There are many people in Europe, India, and Australia making critical policy choices, but in terms of setting the boundaries of what is possible, it is Warren and Trump who have re-politicized this area.

“The most important political figures in the return of antimonopoly politics are Elizabeth Warren and Donald Trump.”

The 2016 Election and the 2016 Warren Speech

In June 2016, Elizabeth Warren delivered a speech on the death of competition in the American economy. It was the first major talk by a politician on the problem of concentrated power over markets in decades, and Warren named names, including Google and Amazon. She was drawing from her own work during the financial crisis, as well as using a wave of research on consolidation done in the early 2010s, to broaden her critique of financial power. With this speech, Warren began turning antimonopoly policy into a political framework for the Democrats, serving as the first politician to really use this rhetoric.

Much of this research was done by the Open Markets division of New America. By the time of Warren’s speech, these ideas were spreading among Democratic elite policy circles. In 2012, Paul Krugman had given a sign of approval for antimonopoly thinking with a column titled “Robots and Robber Barons,” in which he cited Open Markets on why the recovery was weak and returns seemed to be tilting toward capital.

In 2015-2016, the Obama White House began doing research on concentration. In 2016, the administration issued an executive order mildly encouraging more action to address concentration, and the Clinton campaign put out an antitrust policy. Meanwhile, Bernie Sanders pressed against Too Big to Fail banks, and also ended up coming out against the AT&T-Time Warner merger (as did Clinton’s VP, Tim Kaine). The Center for American Progress, a think tank central to mainstream Democratic policymaking, also pushed out policy around antitrust.

A group of policy activists in 2016 finally reinserted antitrust into the Democratic Party platform, after it had been taken out in 1992. I was part of that group, which included both Sanders and Clinton supporters. We were unable, however, to get anything into the platform about Big Tech. Democrats wanted to address easy consumerism, like airlines and cable, not Big Tech.

Democrats had felt they would simply hand over power to Clinton and have a progressive Silicon Valley-led presidency once again. Here’s then-Google CEO Eric Schmidt, for instance, wearing a Hillary Clinton campaign staff badge at the Democratic convention in 2016.

Donald Trump pushed antimonopoly rhetoric much further than anyone on the Democratic side of the aisle. He was assertive on antimonopoly concepts rhetorically throughout 2016. On the campaign trail, he immediately blasted the AT&T-Time Warner merger upon its announcement, calling the merger a dangerous concentration of power. He clumsily talked about Jeff Bezos’s antitrust liability, and he bashed the utopian free trade rhetoric of the 1990s with the pledge he would pull the US out of the NAFTA-esque Trans-Pacific Partnership (TPP).

Trump’s Win

Trump’s electoral victory—defeating Republican icons like Jeb Bush in the primary and then winning the general election by defeating Hillary Clinton—crushed the self-satisfied image that Democrats had where Google and Facebook were bastions of progressive engineers who could do magic. Trump forced Democrats to realize Google and Facebook were just companies selling marketing services.

The 2016 election was paralleled by fierce intellectual debate. The old antitrust consensus, held by elite lawyers, regulators, bankers, and business leaders, attempted to defend their profession from public attacks from both parties in an American Bar Association Presidential Transition Report in late 2016. Here’s what the ABA antitrust section, run by fancy lawyers and economists, wrote:

“Antitrust figured prominently in the 2016 Election: for the first time in recent memory, both major parties prominently featured their respective viewpoints on competition and consumer protection policy. Campaign commentary included sharp criticism of an alleged absence of vigor and overall ineffectiveness in current patterns of antitrust enforcement, with comments calling for sharp, even radical reorientation of enforcement policy, especially in the review of proposed mergers and treatment of large industrial firms. As will be seen in this Report, the Section does not share these views about the current state of antitrust enforcement policy.”

But former Open Markets fellow Lina Khan, just over a month later, published a ground-breaking Yale Law review article titled “Amazon’s Antitrust Paradox,” which drew widespread attention because of its powerful and systemic dismantling of the past 40 years of law and economics thinking. Khan’s argument shattered the intellectual consensus around antitrust as thoroughly as Trump shattered the political complacency of the Republican and Democratic establishments.

The new political situation in America and the increasingly-obvious intellectual weakness of the American antitrust establishment empowered Europeans to go after Big Tech. Obama had been quite hostile to European antitrust enforcers, criticizing European Competition Commissioner Margrethe Vestager as a protectionist because of her investigations of Google. After Trump’s win, American criticism of the Europeans on this front largely ended, and Vestager went ahead without American interference. She soon fined Google $2.7 billion for anti-competitive behavior in online shopping search engines.

The chaos Trump unleashed in terms of nationalism and soft authoritarianism also empowered the Chinese to become more overt and aggressive about seizing global influence and power. It was no longer just Trump attacking the global order, but the Chinese as well.

“All of a sudden, Big Tech was revealed as just another dangerous and wealthy interest group, no different than Big Tobacco or Big Oil in its perceived political thuggishness.”

Cambridge Analytica

To Democrats, the Cambridge Analytica scandal destroyed the reputation of Silicon Valley as progressive allies. After Trump’s win, Democrats were disappointed in Big Tech for not winning the presidential race. But after Cambridge Analytica, Democrats began to blame Big Tech for throwing the race to Trump. The privacy scandal, whereby Trump allies helped use Facebook’s data against Democrats, showed that these companies might be gay-friendly, but they were not part of the Democratic machine.

More broadly, the failure of Big Tech to bring forth progressive politics, and Obama’s failure to secure a term for his successor, induced soul-searching within the liberal policy world. It is hard to imagine bigger evidence that one’s policy framework was rejected than to watch Donald Trump take the oath of office. Some began asking if their faith in Ivy-credentialed technocracy itself is the problem.

In July, Nancy Pelosi and Chuck Schumer put out a little-noticed plank on antitrust, a part of what they called the “Better Deal.” This plank was a statement that antimonopoly could be important if the Democrats recaptured Congress. Pelosi and Schumer still didn’t put Big Tech in there, but the Better Deal revealed that top Democrats began seeing that market structure was becoming political again.

Google Broadens the Debate With an Attack on a DC Think Tank

In the summer of 2017, Google and New America had the team at their Open Markets division dismissed for praising a European antitrust action against the company. I was involved in this break, and I work at Open Markets, so I’m not the most objective person here. But the story ricocheted all over the insular policy/antitrust world and throughout Europe.

All of a sudden, Big Tech was revealed as just another dangerous and wealthy interest group, no different than Big Tobacco or Big Oil in its perceived political thuggishness. At roughly the same time as this break, the Stigler Center at the University of Chicago hosted a debate among antitrust insiders with the nascent network of antimonopolists who called themselves the New Brandeis Movement, after Supreme Court Justice Louis Brandeis. This debate was the first time that the old model of antitrust and the new thinkers openly and directly clashed.

Warren’s Second Speech: 2017

In December, Elizabeth Warren gave a second speech on the problem of monopoly, this one for the independent Open Markets Institute. This discussion was deeply political, where Warren began framing monopoly power less as economic and more as an acquisition of political power. Here’s a passage:

“To keep us distracted, those in power tell lies built on fear – fear of people who look different than we do or worship differently than we do or come from a different nationality. All the while, those powerful interests have been locking down their control over our economic system…

When those giants kill off competition, prices go up, quality goes down, and jobs are eliminated. But that’s not all. Massive consolidation means the big guys can lock out smaller, newer competitors. It means the big guys can crush innovation. It means the big guys can muzzle ideas they don’t like and voices they don’t like. Studies show that consolidation even contributes to driving down wages and driving up income inequality.

Concentrated market power also translates into concentrated political power – the kind of power that can capture our government. And that’s exactly what’s happening, as President Trump and the Republicans in Congress bow to the power and influence of these industrial giants and financial titans.”

Warren would make concentrated power central to her critique of Trump.

Post-2017: The Explosion

The first year of Trump was pivotal and brought antimonopoly thinking into the mainstream of politics, and there’s too much to trace after 2017. Here’s a bit of a taste.

The cloistered world of the antitrust economics profession came under assault from outsiders, including outsider economists from the world of monetary policy and labor. In America, politicians like Cory Booker, Amy Klobuchar, David Cicilline, Josh Hawley, and Richard Blumenthal began asserting themselves on the problem. Trump’s antitrust chief Makan Delrahim challenged the AT&T-Time Warner merger using a technocratic approach crafted by legendary economist and expert witness Carl Shapiro and lost. The Federal Trade Commission, petrified by public exposure, began losing credibility rapidly (pressed by one of its assertive new commissioners, a former Warren policymaker named Rohit Chopra). Republican and Democratic state attorneys general started to organize to enforce merger and antitrust policy.

The tech platforms are under investigation by Congress and potentially the Federal government, as well as governments all over the world, and activists and business people in New York City blocked Amazon from extracting tax concessions in its HQ2 campaign, even as farmers are beginning to demand action to address concentrated corporate power. Venture capitalists and large corporations like Walmart and Oracle began noting the dangers of Big Tech, and engineers and business leaders in Silicon Valley and in technology are themselves discussing the dangers of concentration. A whole network of thinkers has emerged from the industry, with leaders such as Tristan Harris and Roger McNamee, who are worried about the addiction and social pollution these companies induce.

In Europe, the failures of Vestager are leading to more aggressive attempts to address Big Tech, spearheaded by Germany’s Andreas Mundt and his work on Facebook. Reducing the centralization of power in our cultures is going to flow into the defense world, where increasingly officials see concentrations and bottlenecks as security vulnerabilities. I suspect the climate change debate and concentrated energy systems will be impacted as well.

And, of course, there’s also 2020, where antimonopoly policy is increasingly central, and I suspect that China policy will be central to the general election.

And so, that is how antimonopoly was injected into mainstream discourse. In the 1990s and 2000s, it was the End of History, the notion that globalization and technology have brought forth peace everlasting. The Iraq War and the 2008 financial crisis shattered that consensus, and scholars, activists, and business people began reconsidering the politics of markets. Then Trump’s election revealed that underneath the placidity of the Obama years the world was close to chaos. A few years into the Trump era, despite all the noise, there is increasingly a consensus that concentrated power is inducing many of the problems we are seeing around us.

It’s not going to be easy to decentralize our corporate structures. But now, at least, we know what we have to do to regain our liberties.

Editor’s note: This article first appeared in Big, Matt Stoller’s newsletter on the politics of monopoly. You can subscribe here. Stoller is a fellow at the Open Markets Institute and the author of the upcoming book Goliath: The Hundred Year War Between Monopoly Power and Democracy. You can follow him on twitter @matthewstoller.

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