Monopoly Power is Crushing the Soul of America
If you haven’t noticed, America is a bit on edge today. Kids get shot at when they pull into the wrong driveway. Millions disappear into lives of addiction that often end in overdose. Political violence is slowly becoming mainstreamed. America has always had unhappy, anxious people, but there are a whole lot more today than any other moment in our lifetime.
Over the last year, I’ve tried to lead a discussion about the sources of this widespread disaffection – what I call “the unspooling of America.” It’s a complicated diagnosis. Social norms are changing, causing virtue and character to be supplanted by consumerism and celebrity as primary American values. The pace of technological change is exhausting Americans, and social media is shortening tempers and turning us against each other. Wages don’t keep up with costs, and millions of families are surviving on a shoestring budget, just one missed paycheck away from ruin. Social isolation is growing, with smartphones, remote offices, and longer, more uncertain work schedules contributing to our withdrawal from friends, family, and romantic life.
But there is something else that is driving people mad. It lives a bit under the surface of American life, undetectable to many, with symptoms visible but the source obscured.
What I’m referring to is the massive concentration of economic power that has occurred over the last forty years, especially in the technology, financial, and media industries. There are, of course, practical economic costs of monopoly power. Right now, for instance, the Department of Justice is trying to block the takeover of low-cost Spirit Airlines by JetBlue, which would likely cause many airfares to increase by double digit percentages across the country as a critical budget carrier is erased from the industry. Most Americans are familiar with the economic costs of corporate consolidation. One hundred years of living with and understanding monopoly power has demonstrated how bad anti-competitive markets are for consumers.
But there is another cost of monopoly power – a spiritual price paid by the millions of Americans who have less and less ability to impact the rules and norms that govern their lives. My friend Matt Stoller of the American Economic Liberties Project puts it very simply: “It’s really a question of who governs. Are we governed by democratic institutions? Are we a free people who can govern ourselves? Or are we governed by private monopolists?”
Citizens may be frustrated with the quality of their government, but at least they have agency when it comes to who runs public institutions. They get to vote in and out elected leaders, and with that ability comes a feeling of empowerment and control. But increasingly, elected government isn’t making the decisions most critical to the lives of ordinary Americans. Instead, those decisions are made by monopoly or near-monopoly companies, who have so much power as to be nearly immune from government touch, and so much concentrated market share that consumers have no choice but to abide by their rules.
There are legions of examples. Restaurant owners are hostage to the rules set by a small group of delivery services that are becoming increasingly concentrated. Small businesses cannot make money without online advertising, and those ad prices are set and controlled by companies like Google and Meta. Parents want their kids to have productive social lives, but must deal with the harmful rules of engagement set by giant technology companies like TikTok and Snapchat. Increasingly, the most important economic and social interactions in your life are being dictated by rules set not by elected leaders, but by massively powerful private companies. These monopoly or quasi-monopoly companies become a kind of private government – rule-setting entities with near zero accountability. They have all the power. Citizens have none.
The unspooling of America has been accelerated by the deep metaphysical frustration created by so many people losing agency and power to unaccountable mega-corporations. It may not live in the exterior of daily life (few Americans would probably proactively verbalize their anger at this phenomenon), but it doesn’t take too much questioning to hear from people how soul crushing it is to be so distant from the places where the decisions are made that affect their lives and the lives of their children. The rise of populist candidates who attack a broad range of “elites” is no doubt fueled by this feeling of powerlessness.
But there is good news – government possesses the tools necessary to unwind concentrated economic power. Some of these tools are old-fashioned regulatory power. For instance, why shouldn’t the rules of how our kids exist online be set by elected government instead of profit-obsessed private companies? Congress could, tomorrow, pass legislation to protect kids online and take back this rule-setting function from the wildly irresponsible hands of TikTok and Meta.
Antitrust policy is another important, long dormant tool. Luckily, the Biden Administration has revived this capacity through a newly aggressive Department of Justice and Federal Trade Commission. Suddenly, the big private governments are being held accountable by antitrust regulators, and that’s a great thing.
It’s so important, in my mind, that I decided to kick off a social media live explainer series this week. I started by inviting Bill McGee, an expert on competition in the airline industry at the American Economic Liberties Project, to talk about the DOJ’s effort to stop the JetBlue/Spirit merger. In the next few weeks, I will host experts to talk about the Biden Administration’s work to end anti-competitive practices at Amazon and Google, and the work the FTC is doing to address consolidation in the health care sector.
I care about breaking up monopoly power because it’s good for consumers and workers. Costs are too high and wages are too low for the people I represent in Connecticut, and antitrust policy is an important means to give consumers more power to find lower prices and give workers more power to bargain for higher wages. But I care just as much about the crappy way that a lot of people I represent are feeling today. There are a lot of reasons for America’s spiritual malaise, but this feeling of powerlessness is a big element. And taking power away from private governments and restoring it to consumers and workers, through truly competitive markets, or to citizens, through active government intervention in the economic rule setting, is a way to help replenish the soul of our nation.