Why There Is No “Countervailing Power” Against Monopolies

By Eric Schewe, JSTOR

One of the most important political trends of the 2010s was a renewed focus on income and wealth inequality. It was heresy until recently to acknowledge that, since the 1970s, both the Republican and Democratic parties pursued relatively similar policy aims on business deregulation. These policies have resulted in increasing inequality. In the past decade, this has renewed a left-wing movement in the Democratic Party, demanding more populist policies on financial regulation, taxation, social services, and education.

But important to the success of this movement is understanding why the Democratic party drifted from its populist roots. It’s the party that brought us the New Deal and Great Society programs, after all. In the writer and congressional advisor Matt Stoller’s recently published book, Goliath, he makes the case that cause and effect are one and the same: the revival of big monopolies.

He argues the New Deal succeeded not just by redistributing wealth toward impoverished Americans in the Great Depression (through programs everybody knows, such as Social Security). It also did so by breaking the political power of big oligarchs like Andrew Mellon, breaking apart monopolies few think about anymore, such as Mellon’s Alcoa or the A&P grocery store chain.

In fact, the New Deal revolutions in law and policy were so successful that the following generation of politicians and intellectuals took their accomplishment for granted. Although much of the postwar 1950s prosperity was the result of wartime stimulus and unparalleled American world power, both Democratic and Republican administrations pursued strong antitrust legal activity. This brought critiques from both the left and the right, and the rise of the neoliberal Chicago School of economics. But Stoller details technocratic leftist writing, a genre that was suspicious of the help that antitrust gave to the small businessperson, who was traditionally a Republican and an enemy of perceived “progress.”

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