Warnings About Monopoly Power Are Right
The biggest monopolies are government.
"America Has a Monopoly Problem—and It's Huge," ran a headline in The Nation recently. The piece by Nobel Prize-winning economist Joseph Stiglitz lamented that "If we don't like our internet company or our cable TV we either have no place to turn, or the alternative is no better."
If you spend any time with left-of-center commentary these days (and everyone should—especially people on the right), you'll find this is a common theme of late. The New Republic writes about "How Democrats Can Wage a War on Monopolies—and Win." In The Week, Jeff Spross tells us "What Beer Reveals About Monopoly Power." (Cliff's Notes version: nothing good!) At The Huffington Post, Zach Carter and Paul Blumenthal consider the proposed merger of AT&T and Time Warner "intolerable… No single entity should have that much power."
In recent months Massachusetts Sen. Elizabeth Warren (D) has warned repeatedly about how "a handful of corporations" have "seized power in this country" through economic consolidation. Her colleague Sen. Al Franken (D-Minn.) wants to know "How did big tech come to control so many aspects of our lives?"
Proponents of net neutrality warn that "in a future without net neutrality, instead of being able to watch whatever is being produced by anyone, you'll either just have to submit to whatever the local monopoly is willing to provide, or pay through the nose for universal service." Editors at Talking Points Memo discuss "Our Problem With Monopolies." The New York Times asks, "Is Google a Harmful Monopoly?" And so on.
You could argue that this concern over monopolies, real or alleged, is overwrought. The "gales of creative destruction," as Joseph Schumpeter called them, do not discriminate: Today's economic colossus is tomorrow's kitschy relic (see: Philco radios, Pullman railway cars).
As Mark Perry of the American Enterprise Institute pointed out not long ago, only 60 of the companies listed on the Fortune 500 in 1955 remain on the list today. The rest went bankrupt, were acquired by or merged with another company, or have been outrun by other firms.
But let's assume the monopoly alarmists are right: that more consumer choice is better, that the concentration of power is bad, that gaining market share though non-market (and especially political) means is inherently suspect, and that allowing large, impersonal, unaccountable institutions to control the smallest details of our lives is simply wrong. Those points do seem reasonable enough, after all.
Why, then, are so many progressives so enamored of the worst monopolist of all—government?
Take Warren. In one breath, she condemns the lack of consumer options. In the next, she blasts Education Secretary Betsy DeVos for supporting school choice. "Your history of support for policies that would drain valuable taxpayer resources from our public schools and funnel those funds to unaccountable private and for-profit education operators may well disqualify you from such a central role in public education," she wrote back when DeVos was first nominated.
(Warren wasn't always opposed to school choice, incidentally. Before running for office, she supported vouchers as a means to produce "schools that offer a variety of programs that parents want for their children, regardless of the geographic boundaries.")
Speaking of consumer freedom, shouldn't consumers be able to choose their own health insurance—and even no insurance at all? Apparently not: Warren supports Obamacare, with its individual mandate forcing people to buy coverage regardless of whether they actually want it. What's more, she has pledged to support Bernie Sanders' single-payer proposal—under which a single government agency would control health care financing for everybody.
Let that marinate for a minute. If Aetna were to gain monopoly control of the health insurance market by merging with its rivals—or even simply by winning over their customers—Warren would find this abhorrent. But she wants the federal government to do precisely the same thing by edict.
Like Warren, Franken also opposes school vouchers and supportssingle-payer health care. While generalizations are risky, it's probably a good bet that many progressives with similar views on corporate monopoly power are perfectly fine with government monopoly power.
Many Democratic politicians are concerned about the power of Facebook and other tech companies to control what political viewpoints people can hear. And yet they rail against the Citizens United decision, in which the Supreme Court said government may not control what political viewpoints people can hear. (For those with dusty memories, the case concerned whether the government could ban distribution of a movie about Hillary Clinton during the closing days of an election.)
In a speech about the dangers of monopoly power, Warren said: "Giant corporations crush competition. They shut out small rivals and they kill young startups… Giant corporations jack up prices and cut corners on quality… Many giant corporations don't win in the marketplace because they're better. They win because they are big."
For all the power corporations have, though, even the biggest lack a monopoly exercised by government: the monopoly over the legitimate use of force. Facebook can't compel you to join its social network—but the federal government has the power to make you join the Army. Apple can't force you buy an iPod at the point of a gun, but governments oblige you to purchase services you don't want all the time. Strange, isn't it, that Warren and others who rail about the danger of monopoly are so eager to wield the power of the biggest monopoly of all?
This column originally appeared at the Richmond Times-Dispatch.
