If you are old enough to remember a different America, an America of neighborhood shops, of local bakeries, butchers, drugstores (with a soda fountain), shoe stores, bookstores, and dress shops, you may have wondered why most of them have been replaced by national chain stores and anonymous strip malls. Now we see even neighborhood public schools replaced by national charter chains, some even operated by for-profit corporations. Thom Hartmann explains the roots of this change in his new book The Hidden History of Monopolies: How Big Business Destroyed the American Dream. He is releasing the book a chapter at a time on his blog, which should whet our appetite to buy and read the book. This chapter describes the legal ploy that resulted in crushing local enterprise and creating billionaires.
He writes:
Robert Bork was Richard Nixon’s solicitor general and acting attorney general and had a substantial impact on the thinking in the Reagan White House—so much so that Reagan rewarded his years of hard work on behalf of America’s monopolists with a lifetime appointment to the federal bench in the DC Circuit, frequently a launching pad for the Supreme Court.
In the years following Lewis Powell’s 1971 memo, as numerous “conservative” and “free market” think tanks and publications grew in power and funding, Bork’s ideas gained wide circulation in circles of governance, business, and the law.
In 1977, in the case of Continental T.V., Inc. v. GTE Sylvania, the Supreme Court took up Bork’s idea and, for the first time in a big way, embraced the “welfare of the consumer” and “demonstrable economic effect” doctrines that Bork had been promoting for over a decade.
Neither of those phrases exists in any antitrust law, at least in Bork’s context. Nonetheless, the Supreme Court embraced Bork’s notion that the sole metric by which to judge monopolistic behavior should be prices that consumers pay, rather than the ability of businesses to compete or the political power that a corporation may amass.
When Ronald Reagan entered the White House in 1981, bringing with him Bork’s free market philosophy and a crew from the Chicago School, he ordered the Federal Trade Commission to effectively stop enforcing antitrust laws even within the feeble guidelines that the Supreme Court had written into law in GTE Sylvania.
The result was an explosion of mergers-and-acquisitions activity that continues to this day, as industry after industry concentrated down to two, three, four, or five major players who function as cartels. (A brilliant blow-by-blow cataloging of that decade is found in Barry C. Lynn’s book Cornered: The New Monopoly Capitalism and the Economics of Destruction.)
Bork’s reasoning—that antitrust law should defend only the consumer (through low prices), and not workers, society, democracy, or local communities—has become such conventional wisdom that in the 2014 Supreme Court case of FTC v. Actavis, Chief Justice John Roberts wrote a virtual word-for-word parroting of Bork: “The point of antitrust law is to encourage competitive markets to promote consumer welfare.”
Barak Orbach, professor of law at the University of Arizona, is one of a small number of scholars today who are genuine experts in the field of antitrust law. In a 2014 paper published by the American Bar Association, he wondered if Bork knew he was lying when he wrote that the authors of the Sherman Antitrust Act intended to reduce prices to advance “consumer welfare,” instead of protecting the competitiveness of small and local businesses, and the independence of government at all levels.
His conclusion, in “Was the ‘Crisis in Antitrust’ a Trojan Horse?” was that Bork was probably just blinded by ideology and had never bothered to go back and read the Congressional Record, which, he noted, says nothing of the kind.74
While Bork wrote that “the policy the courts were intended [by the Sherman Antitrust Act] to apply is the maximization of wealth or consumer want satisfaction,” Orbach said, “Members of Congress . . . were determined to take action against the trusts to stop wealth transfers from the public.” So much for that: today the Walton (Walmart) family is the richest in America and one of the richest in the world. They’re worth more than $100 billion, having squirreled away more wealth than the bottom 40% of all Americans. And they spend prodigiously on right-wing political causes, from the national to the local.
Amazon’s Jeff Bezos is now wealthier than any Walton; with a registered net worth of $112 billion, he is the richest single person in the world. Bezos is so rich that when he divorced his wife, MacKenzie Bezos, she received 19.7 million shares of Amazon worth $36.8 billion. She instantly became the world’s third-richest woman, and Jeff Bezos remained the world’s wealthiest man.75 While local newspapers are shutting down or being gobbled up all over the country, Bezos personally purchased the 140-year-old Washington Post in 2013 for $250 million. Now Bezos, like the Walton family, can use his sub- stantial wealth to obtain political ends that protect his wealth and allow Amazon to continue to grow.
Supreme Court rules unanimously that states cannot disqualify Trump through the “insurrectionist” clause of the 14th Amendment.
FLERP, does the decision explain which entity can disqualify a candidate who violates Section 2 of 14 amendment? Congress?
I only skimmed it but it looks like there’s a five-vote majority that says Congress and only Congress, and a 4-vote bloc that says the Court didn’t need to and shouldn’t decide that question now.
I liked Marcy Wheeler’s logical take that the Supreme Court is basically inviting Jack Smith to bring federal insurrection charges against Trump. And he should. Even though we can assume that the Supreme Court would find some way to make Trump immune from such charges. I did love the chutzpah of Amy Coney Bryant, perjurer extraordinaire, lecturing only the other female Supreme Court justices about being too strident.
That would not be smart.
The latest Supreme Court pronouncement that basically the rule of law should be a popularity contest probably signals what is coming next with immunity. The Supreme Court will do everything to prevent Trump from being tried. A late decision that doesn’t give presidents full immunity (during Biden’s term) but leaves that open to change if Trump is elected will likely come whenever it is too late to try Trump. Delay, delay, rush rush when necessary for right wing rule.
I don’t know about that.
Thanks for this excerpt from Hartmann’s first chapter. I can’t tell you how gratifying it feels to see, in print from a source I respect, solid confirmation of my strictly layman’s sense of what was happening in the Reagan years. I was an average and less than enthusiastic student of national history, and– before the Reagan years– somewhat negligent in following current events. But the dereg/ mergers & acquisitions that started in ’79 were worrisome, and went on steroids in the ’80s. And I knew for sure somebody was putting the kabosh on enforcing antitrust law. The ’80s were a 180 from the ’70s in this regard. Looking forward to chapter 2 excerpt.
Thanks, Ginny. Another terrific book is “The Smartest Guys in the Room,” by Bethany McLean about the Enron debacle.
Thanks, Diane – Ordered!
The Bork concept of antitrust law being primarily used to protect consumers is firmly grounded in precedent and in economic logic. Walmart and Amazon didn’t become powerful retailers because of a nefarious conspiracy by political operatives or legal ideologues. They achieved their market position because they gave consumers what those consumers wanted: lower prices, and in the case of Amazon, also the convenience of not having to shop in person. These big retailers are far more efficiently operated than mom-and-pop stores, which is why almost all people patronize the big guys.
No doubt many small store owners and commercial property owners have been driven out of business by the consolidation of retailing into huge enterprises; the same dynamic has occurred with many family farms. That’s the process of creative destruction that in the long run results in greater wealth for the country. At the same time, capitalism often has rough edges that need to be smoothed off by an effective safety net provided by government.
Rhetorically, is the George Mason University (Koch) Global Anti-Trust Institute funded by Google, Amazon and Meta?
Jack Safely– That’s a historically narrow viewpoint that leaves out bona fide [not Bork-style] antitrust suits underway since before these ideas captivated SCOTUS– and doesn’t consider burgeoning ’80s global trade, which made it possible for consumers to buy cheaper goods in exchange for their own jobs [how about that for a “demonstrable economic effect?].
I mean really, Jack. Just can’t leave unanswered the claim that the “creative destruction” of “small store owners” [let’s not forget the big store owners also destroyed, not to mention US med-sized mfrs] and family farms results in “greater wealth for the country.” Only a dunderhead could fail to notice that the greater wealth goes straight to the ever-larger topmost echelon, to the detriment of middle & lower-middle classes making up the large majority of our population. About the only hail-Mary they’ve got capturing a tiny slice of that pie is 401(k)s, which don’t measure up to the pensions middle & lower middles once got– & too few of them have 401(k)s anyway.
Like so many economic analyses that this blog’s readers attempt to make, yours is just surface deep. Consumers have gained major financial benefits from the consolidation of retailing and farming into more efficient enterprises. There is still plenty of competition in retailing among numerous large players, just not that many small retailers any more. Consumers buy where they get the best combination of lower prices and convenience. Your analysis is just sentimentality, not informed reasoning.
Jack,
There is a reason for anti-trust law. It’s to protect competition. It’s a shame it was never used to limit the expansion of Walmart. That chain has hollowed out Main streets across the nation. Instead of mom-and-pop stores that bolster the local economy, mom and pop are part-time workers at Walmart. The stores on Main Street are shuttered. And if Walmart doesn’t make enough profit, it will close down and leave a huge empty hangar and a dying town.
Diane, there’s a phrase courts use to express this: antitrust law protects “competition, not competitors.” And the way competition is measured is generally through consumer prices. The health or existence of mom and pop stores is immaterial except insofar as it impacts consumer prices. This is how courts have interpreted the Sherman Act.
FLERP,
That’s a sad interpretation of “competition,” seeing how Walmart drives all small competitors out of business by selling cheap Chinese schlock. When they don’t make enough profit, they simply close and repeat the process elsewhere. Then consumers are left with no choices.
Jack
I don’t know how far your network reach is. If it extends to the University of Arkansas, heads up, somebody out there must be embarrassed for them.
One of them wrote a hot mess that, The Hill, a right wing publication posted today. It’s dogma jelly attempting to be nailed to a wall. True to form, the aim is to disparage public schools. Instead, the readers get a muddled morass, typical and good for a laugh.
What earthly reason was there for the U of A shtick about public K-12 providing bad education to get mashed together with grievance about those from the expensive, legacy admission, ivy leagues?
Is it past time that the Walmart heirs join with Hillsdale and Robert P George’s James Madison programs and make the U of A a right wing, religious college?
If you like interesting reading, check out the story about Paul McGowan, former CFO of Wyoming Catholic College. He gave the largest donation in the College’s history and, gave money to the College’s executive Vice President. McGowan who donned a cowboy hat when he arrived in Wyoming and called himself the, “Catholic Cowboy,” was sentenced to more than 5 years in jail in 2022. The people who gave McGowan the money that WCC got, went to court to get it back. I wonder where the subsequent case stands, the lenders/investors allege that WCC and the VP are, wrongly, keeping some of the money that hasn’t been returned.
The Koch network likes a lack of accountability in tax-funded private schools? The McGowan fraud involved Covid funds- oh, the irony. McGowan claimed in getting the 2 PPP loans (administered by the Wyoming Business Council) that the school had 187 employees. The college only enrolled about 200 students at the time.
The former president of WCC (he left before the hiring of McGowan) is currently, President of the Heritage Foundation.
Linda,
I’m sure you know that the University of Arkansas “Department of Education Reform” is wholly owned by the Waltons.
Good morning Diane–your headline reads “Bock” Rather than “Bork.”
Thank you, Mark! I fixed the spelling error in the headline. I saw that headline many times and didn’t see it. Thank you!
Well, I’m not, as I’ve said before, particularly comfortable editing you. But I figured you’d want to fix that.
And while I have you here, so to speak, thanks for your voice of reason in this crazy and dangerous time.
I love good editors! We are all better for their eagle eyes.
Good. I’ll feel a bit more comfortable with this, then.
Mark, please correct me when you see an error. Typo or more often, autocorrect.
Will do Diane. And thanks.
Biden is the first president in forty years that has made any attempt to enforce antitrust regulations. He appointed Lina Khan, a fearless defender of fair competition, to lead the FTC. She is only person in recent history that is truly looking out for consumers, and she is not afraid to go after the wealthy abusers. https://www.politico.com/news/magazine/2023/11/06/law-students-antitrust-lina-khan-00124240
Agree, RT! 👍
Agree Biden has generally been good on antitrust. Problem is the courts, which is all that matters when it gets down to litigation. Federal courts (thanks in part to Republican Presidents filling judge seats) have been increasingly hostile toward plaintiffs in antitrust suits over the last couple decades, especially in New York, where all the big financial conspiracy cases are filed. And while Biden’s DOJ has been good about going after employers who use “no poach” conspiracies to suppress wages, courts keep dismissing the cases they bring (and not just conservative judges).
After the revelations concerning bolts missing and doors falling off passenger jets in midair, it has been revealed that only two companies build passenger jets today: Airbus and Boeing. McDonnell-Douglas, a previous merger, decided it would be more profitable to dominate the military industrial complex. If Corporate America really believed in capitalism, it would understand that competition not only results in low prices for consumers, but more economic security and better products. If it has been established that anti-trust law is dependent on consumer prices, why hasn’t the DOJ gone after the poultry industry or other food providers who have basically decimated small farms and producers? It is not only the quality of consumer goods, but the quality of our lives that is now threatened.
“So what are you going to do? You would not want to change Capitalism would you?” Was what Stephanie Ruhhle and her 2 Wall ST talking heads had to say about this. “Greedflation’ is the new inflation as corporate profits balloon”https://thehill.com/business/economy/4057722-greedflation-is-the-new-inflation-as-corporate-profits-balloon-report/Pretty much we do it all the time. You bet I do!
Bork attended a private school that today costs $68,000 a year. He then went to the free market University of Chicago. In 1982, he married a Catholic activist (former nun). In 2003, at the age of 76, he converted to Catholicism. He opposed the Civil Rights Act of 1964.
As recently as 6 years ago, his widow was honored by Christendom College for her work against abortion and her work with the Thomas More Society, EPPC, Catholic Campaign in America, and Susan B Anthony Fund.
Robert Bork Jr. heads the Anti-Trust Education Project which received funding from Amazon in 2020 and 2021. The advisory board of the Project includes Joshua Wright, Exec. Director of George Mason University Global Anti-Trust Institute, Alden Abbot, a research fellow at GMU and Judge Douglas Ginsberg, a law professor at GMU. GMU is a public university inextricably linked to Koch. (Tech Transparency Project, 8-31-2023)
Mary Ellen Bork, the 2nd wife of Robert Bork met with William Bennett, Bishop Rene Gracida and Hugh Carey, former governor of N.Y. to advance an initiative that would bring “a politically powerful and distinctly Catholic voice to the US political scene.” The founding, in 1989, of the Catholic Campaign for America, by Thomas Vincent Wykes, which was to serve as a Roman Catholic activist organization, was the impetus for the Bork meeting.
Wykes also founded the Springtime of Faith Foundation which is headquartered in Nashville, Tenn. It echoes the “He Gets Us,” ad campaign.
This is a follow-up to a comment I added that is in moderation. In 1991, a meeting was held for the Catholic Campaign for America. Notable Catholics in attendance included Mary Ellen Bork, Bishop Rene Garcida, Hugh Carey, former governor of N.Y., and William Bennett.
Six years earlier, the UPI reported in 1985, “Bennett offers voucher plan for schools.” Bennett was US Secretary of Education. He attended Gonzaga College High School, a Catholic school. Bennett framed the vouchers as a plan to help poor kids. The Akron Beacon Journal reported, in 1999, that the Republican, Catholic Gov. of Ohio initiated vouchers to get tax money for Catholic schools. It becomes increasingly suspect that the plan for Catholic theocracy was on the scene in the area of education about 1985.
The Wikipedia entry for Bishop Gracida references allegations about priest abuse.
Koch Industries posted info at its site about an 8-part podcast series, “Charles Koch sits down with William Bennett.”
I was just looking at a photo of courthouse square in my hometown, Bloomington, Indiana, back in the 1960s. Gone are the small jewelry shop. Gone are the small bookstores. Gone are the small gift shops. Gone are almost all the Mom and Pop shops. There’s a website called “I Remember Bloomington” with a few hundred members. And the conversations there are almost all about the places people used to own or frequent that no longer exist because Walmart and Amazon.
It’s so incredibly sad.
Amazon and Walmart: the two titans that destroyed small business and small towns. In the name of competition.
But as you have noted many times, monopolies do not make for competitiveness.
Sad, but true story. Thanks for sharing it. I wish everyone could read your blog, Diane. But it does make me sad. With the obviation of the Fairness Doctrine, monopolization of news media, and the dumbing-down of public education, I sometimes feel like those of us who both think and care about democracy and social equality are locked in a dark room talking among ourselves. We have flashlights. How long can our batteries hold out?