Anti-Monopoly Laws Were a Crazy Liberal Idea

Guest post by Dr. William Turner. 

It was a time of considerable anxiety for many ordinary Americans.  As the economy whip-sawed from prosperity to ruin, a few individuals just got richer and richer by controlling huge corporations that seemed to run, not just the economy, but the entire nation through the superior access that their large fortunes bought them to public officials.

The year?  You guess 2011?  Try 1890.

That was the year in which Congress passed the Sherman Anti-trust Act, the nation’s first major legislation to prevent the creation of monopolies, still in effect today, and the basis for federal review of mergers and acquisitions among large corporations, such as AT&T’s purchase of T-Mobile.  Substantially amended during the presidency of Woodrow Wilson with the Clayton Anti-Trust Act, the Sherman Act reflects a fundamental piece of wisdom that is as relevant today as it was then: that very large concentrations of economic power threaten everyone else’s freedom, such that it is entirely reasonable to use the power of government to prevent such concentrations.

Everyone knows that “big government” is the enemy of freedom, right?

Well, not if you’re a small farmer who is at the mercy of the railroad to transport your crops to market.  Not if you own a small petroleum refinery that faces unfair competition from a much larger rival.  Not if you’re a mother who just wants to make sure that the packaged meat you buy at the grocery store doesn’t contain floor sweepings and other revolting, unhealthful additives.  Not if you’re an African American who cannot find a motel room or see a movie or attend the town’s public school because of racial segregation.

Business leaders who whine about “big government” have obviously forgotten about the publication in 1906 of The Jungle, a novel by the muckraking journalist Upton Sinclair that revealed the disgusting things that went on in the abattoirs of large meat packers.  After many Americans read the book, and reported on its contents to their friends and family, everyone stopped buying packaged meat, which was a novelty in the United States at the time.  Meat packers clamored for federal inspections of their facilities as the only way to restore the public’s confidence of their product, to get people to start buying again.

The results were the Meat Inspection Act and the Pure Food and Drug Act, both of 1906.  Maybe you think meat inspections and pure food and drugs are bad ideas, but if so, I guess you’ve never heard of e. coli.

In general, opposition to “big government” comes from the two chief sources of tyranny in the United States.

Firstly, owners of large corporations, such as the notorious Koch brothers in Kansas, and secondly, white supremacists.  Southern whites were perfectly happy with big government during its rise in the New Deal, when President Roosevelt and his advisers noticed that the South lagged the rest of the nation in economic development, which disparity traced its roots to the dilatoriness of southern farmers in switching to mechanized agriculture in the 19th century because they had a large labor pool consisting first of slaves, and then, with the end of slavery, with the former slaves, most of whom had few options but to do the same work they had done as slaves, but now for starvation wages.

So New Dealers focused economic development efforts on the South with such projects as the Tennessee Valley Authority, which allowed a growing number of southern houses to have electricity for the first time, and created large numbers of jobs, in addition to providing ancillary benefits such as flood control.  Southerners only started screaming about “big government” in 1954, when the Supreme Court forbade racial segregation in public schools, and they got really upset when Congress passed the 1964 Civil Rights Act, which prohibited segregation much more broadly.  From that point forward, growing numbers of white southerners flocked from the Democratic to the Republican Party, where they have served as reliable tools of large corporate interests right up until the founding of the Tea Party movement after the election of our first African American President as a Democrat in 2008, with cries of “socialism” and the absurd claim that health care reform entailed the federal takeover of  60% of the American economy.

Our grandparents and great-grandparents were far wiser than we.

They recognized that “big government” can actually be an important force for freedom for ordinary (meaning non-millionaire) Americans when the alternative is corporate control of everything.  The people who run large corporations have demonstrated over and over that they have no hesitation about enriching themselves at the expense of the rest of us (can you say, “Koch brothers”?), including by installing their toadies in Congress and our state governments (can you say, “Scott Walker”?).

Unlike big corporate, big government is at least in principle tilted officially and legitimately toward the majority and open to participation and influence by all citizens.  We call that “democracy.”

Big corporate, by contrast, is officially tilted toward a tiny minority and open to participation and influence at best only by shareholders, and, in reality, only by the top-most managers, the ones who get to decide their own huge salaries and golden parachutes.

We call that “oligarchy.”

©2011 Dr. William Turner. Visit his web site

For further information on this important topic, please visit the website to see a collection of very readable articles on the impact of antitrust laws on our lives and businesses.

Click here to see our series of posters about the crazy liberal ideas that have made America what it is today


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