Matt Stoller is a fellow at the Roosevelt institute. You can follow him at http://www.twitter.com/matthewstoller.
Throughout much of the United States, cell phone service is terrible (so is broadband, as Susan Crawford shows). And not just in rural or sparsely populated areas, but cell phone calls routinely drop in major metropolitan areas. You can’t use your phone underground in New York, and there are plenty of places on Capitol Hill you can’t get service. I actually once had trouble getting service near the Federal Communications Commission. This is a result of a lack of competition and increasingly poor regulatory policies. In the late 1990s, 50% of wireless revenues were invested in wireless infrastructure. By 2009, that number dropped to a little over 10%. What is it today? We don’t know, because the FCC no longer even collects the data. The result is that your cell phone drops calls. Cell phone service is also expensive, and the companies nickel and dime you – America is one of two countries where the person receiving the call has to pay for the call. A rough calculation shows that up to 80% of the cost of your cell phone service comes from corruption.
Our banking services are similarly terrible. We have an increasing amount of power in the hands of a few large consumer banks. In most of Europe and in the UK, consumers rarely use checks, they simply transfer money over the internet. A paper check is somewhat absurd – a check is a few bits of information, so there should be no reason to clear this through a paper-based system. But in the US, the backend is still rooted in a 1970s architecture called Automated Clearing House, which was itself layered onto a much older system. This system allows checks (and debit card transactions) to take up to five days to clear, and is remarkably insecure. The association that runs the ACH, known as the National Automated Clearinghouse Association (NACHA), refused to upgrade it after member banks voted to kill a measure to speed up our payments clearing system. In America, the largest banks – JP Morgan Chase, Bank of America, and Wells Fargo – are only now introducing products to allow internet transfers between bank accounts. I tried Chase’s Quickpay service a few weeks ago, and it’s pretty confusing and limited. Mostly, the fat and happy credit card oligopoly of VISA and Mastercard enjoys absurd margins, a roughly 2% tax on every transaction in the country.
These systems interrelate, and inefficiency in one impacts the other. This became very obvious to me when I went to Kenya last summer, and saw how a semi-competent telecom and banking system could work. Kenya has the world’s most innovative mobile payments system, called M-Pesa. M-Pesa is a cell phone based cash remittance system based on text messages. Unlike Chase’s Quickpay system, M-Pesa just works, and works well. You load your SIM card with money at any number of street stalls, telecom stores, beauty shops, or anywhere else someone has decided to set up a Safaricom outlet. Transfers happen via text message, and they cost 0.5 – 4% of the cost of the transaction, which is cost effective for a country where so few people have access to banks. Withdrawals can happen at any Safaricom outlet. If your phone is stolen, that’s ok, the cash is loaded onto your SIM card and you have a unique password. And everyone uses it. It’s like Paypal, only it’s not terrible.
No one quite knows why Safaricom, which is essentially a monopoly, has been able to make this system work in Kenya, whereas large banks and telecoms haven’t been able to make something similar work in the United States. There’s a good case to be made that the lack of banking services in Kenya left open a large business opportunity. There was a ready made culture for this service – workers in Kenya often send money they make in urban areas back home, and there are many small retail stalls run by shopkeepers which were quite willing to sell Safaricom services. M-Pesa first caught on among the unbanked. In the US, most people have access to banks, and remittances are only common among certain population sub-groups (the Consumer Financial Protection Bureau is actually beginning to regulate the space). Credit cards are common. But still, this doesn’t explain why I can easily transfer money from a checking account in Europe to a friend’s checking account in Europe, but can’t do it here. I spoke with representatives from Dwolla, which is a company attempting to build a similar system in the US, and they didn’t really have an answer. The Federal Reserve, which overseas check-clearing in the United States, hasn’t been able to force an upgrade to the clearinghouse that American banks use. The National Automated Clearinghouse Association (NACHA) hasn’t wanted to, and didn’t respond to my inquiry as to why they aren’t trying to make it happen. And unlike Safaricom, American telecommunications companies haven’t pushed into the banking space, largely resisting the ability to buy goods and services via text message or short codes.
This isn’t just a problem of monopolistic behavior or excessive market power. Safaricom is a very powerful company in Kenya, and there is basically no competition to what they do. Yet they have produced a terrific system that companies all over the world are trying to replicate. Cell service on volcanos where no one lives except zebras and lions is more reliable than cell service on Fifth Avenue in New York. What seems to have happened is that American corporate executives are now more focused on financial engineering, which is essentially the extraction of capital from their enterprises and from the public, than they are at selling improved goods and services. For example, GE just got a tax break extended which added $3 billion a year in annual profit in the latest fiscal cliff deal. That’s a lot of money, and not one good or service was improved to drop that cash to the bottom line. As another example, the cable industry is projecting an average monthly bill of $200 by 2020, versus $86 today. At 73 million subscribers, that’s an additional $100 billion a year of revenue. Comcast alone has 22 million customers – that’s $30 billion a year for this one company alone. And let’s be clear, this is not going to better products, Americans tend to get worse internet and cable service than counterparts around the world. Investing in manipulative pricing schemes, lobbying for tax breaks and not investing in good infrastructure is a rational choice for American corporate executives, since their ethic is to extract as much capital as possible from the American economy. And yet, this is why America can’t have nice things.
Antitrust is the core problem here. Without restraint on behavior, corporate executives will work to grab as much market and political power as possible, because only market power and political power allows them to have pricing leverage without investment, risk, or innovation. Competition is the enemy of these businessmen. America has a long tradition of monopoly power and anti-monopoly sentiment and activism. From the progressive era of Teddy Roosevelt to the early 1980s, America had a strong tradition of antitrust regulation rooted in the understanding that too much market power led to inefficiency and price gouging. This tradition ended under Reagan. Since this dramatic shift in antitrust enforcement, corporate power in every industry from cable to railroads to rental cars to banking to health insurance to pipelines has skyrocketed. The result has been inefficiency and price gouging. American electric utilities have dramatically reduced the number of people they have that can repair power lines, which is why it took so long to restore power after Hurricane Sandy. Increasingly, services provided by American corporate oligopolies are terrible. That’s why, if you want to see the future of banking services, you have to look to Kenya. We know how to fix this. It’s called antitrust. And we have to do is dust off some old law books, decide that greed isn’t the only core value we believe in, and get to work.
I learned a similar service exists in South Africa, transforming the SIM card in your phone as a bank account, holding not money, but ‘call minutes’, and you can pay for services or bread with these call minutes, or get other minutes credited to your account: money without money.
Good and depressingly true article.
The European Union capped roaming cell phone charges. I have recently been in the US and France. The charges per minute are
USA Make call $2.24 Receive call $2.00
Europe Make call $0.45 Receive call $0.11
If the phone companies could not make money on European rates, they would have pulled out of the market.
A near perfect example of reverse competition, where the free market encourages companies to compete to charge more money for worse service.
Could the same be true of credit cards?
‘Antitrust is the core problem here. Without restraint on behavior, corporate executives will work to grab as much market and political power as possible, because only market power and political power allows them to have pricing leverage without investment, risk, or innovation. Competition is the enemy of these businessmen.’
Obamacare distilled to one paragraph. Well done. (Although the term ‘businessmen’ seems unfair, if Glenn Greenwald is correct in claiming that Big Pharma lobbyist Elizabeth Fowler drafted this oligopolistic horror.)
Till the Government breaks them in half like they did “E-Gold” (, etal) and for the same reason, a currency structure that competes with the dollar will not be tolerated.
Nicely done! A completely irrelevant comment really sticks it to those Democrats. Are you paid to do this? If so, how much? I’d like to get paid to surf the web, and those Republican think tanks, foundations and other nonprofits are awash in all that corporate cash remarked upon in the article.
Anyway, nice going!
It actually does decribe the ACA in a nutshell.
Remember, Obamacare == Romneycare from Massaschusetts == Heritage Foundation plan from the 1990s.
It’s going to be a failure.
I’m pretty sure Obama is a Republican. I know he claims to rep the D, but his actions speak otherwise…
I think you missed that “without restraint” bit. Politicians face the public every few years.
When was the last time Lloyd Blankfein had to explain himself to anyone he wasn’t giving money?
Isn’t “Obamacare” Obamacare distilled to one word?
If banks don’t man up, things like Bitcoin will throw them out of the market, eventually.
Matt Stoller said:
The historian Carrol Quigley called this the “institutionalization” of capitalism, or the transmogrification of industrial capitalism into monopoly capitalism.
First characteropathic economists have to peddle the idea that maximizing profit, as opposed to maximizing aggregate utility, is the alpha and omega of capitalism. And then, since price is a function of supply and demand, and profit is dependent upon the margin between the price one sells one’s product for and production cost, the purpose of capitalism morphs into limiting supply, which maximizes both price and profits. Anti-production and anti-consumpition thus become the goals of monopoly capitalism, whereas production and consumption are the goals of industrial capitalism.
Great article. It could be applied just as easily to the healthcare industry, including hospitals, pharmaceuticals and medical device companies, the defense industry, oilfield services, integrated oil, soft drinks and many other industries.
The points in this article explain not only why consumer offerings (including price) and customer service are in so many industries are far worse than they would be in a competitive market, but why (a) corporate profits are at an all time high as a percentage of GDP, (b) effective corporate tax rates are at an all time low, (c) executive compensation in the U.S. has exploded while middle class incomes have been stagnant for 30 years, and (d) the executives of monopolies and oligopolies spend so much buying the members of both political parties to ensure points a, b and c continue.
BTW, there is a typo at the top of the article in the spelling of the Roosevelt Institute.
Good point Matt that monopoly (or quasi-monopoly) abuse is an equal opportunity extractive practice. As well as consumers — who are proportionally the most impacted, I’m not forgetting that, corporations too are ripped off and have constraints on their operations imposed because it is getting impossible to find suppliers who are satisfactory, basically competent, almost at any price.
I know first hand that big corp purchasing managers are unable to source IT development and consultancy, building maintenance, telecoms, budget hotel accommodation/lodgings, security amongst many others because the only suppliers with the necessary scale are hopeless at execution or offer unacceptable quality of product. You can find SMEs who will fulfil these markets — but the coordination cost falls on the large corp. So it’s like a tax on being big — if you need scale of supply, you get stuffed by the large suppliers.
Most people reading this will say, compared to their own situation as a small consumer “well, you can cry me a river…” But of course the larger corporations pass the poor services and high prices onto their customers. It really is a zombie dance party…
David Cay Johnston documents these corporate practices in The Fine Print.
America had a strong tradition of antitrust regulation rooted in the understanding that too much market power led to inefficiency and price gouging. This tradition ended under Reagan.
I don’t have a reference to hand but remember reading somewhere that one of Reagan’s first acts on becoming President was to direct the Commerce Department not to enforce the Robinson-Patman Act. AFAIK it is still on the statute book and presumably the current President could simply redirect Commerce to start enforcing it again – but I’m not holding my breath.
Of course your local mom & pop store is still free to sue MegaCorp Retailing for any illegal and anti-competitive behavior and but strangely (!!!) few actually do so.
Barry C Lynn has a very readable book about this, “Cornered: the new monopoly capitalism and the economics of destruction”.
The evils of price gouging notwithstanding, I suspect that monopsony/oligopsony is an even greater threat to the economy but it’s difficult to prove.
I have used Dwolla a couple of times and it works (easily) and is cost effective. Is a merger/acquisition of Dwolla by Wal Mart, Googel, Facebook in the future? It would be nice to see one segment of the economy become competitive.
But what would be the response of the credit card companies, banks, etc. It would be branded as anti capitalism, socialism, communism, unfair trade practices and on and on.
Great article that addresses a situation I have thought a lot about myself.
I would add appliances to the list of quasi-monopolies making a poor product. There has been enormous consolidation among domestic manufacturers, and this market–at least outside the luxury end–is somewhat resistant to foreign competition because shipping costs are such a high percentage of costs. The last dishwasher I replaced in my house was 20+ years old. Today, you are lucky to get 5-6 years with a new one.
I also think that private equity plays a major role in this type of product degradation/underinvestment. As owners, PE folks are purely financially driven and don’t want to invest in anything that won’t show a clear return over their ownership time frame. They are also important drivers of what I would call “trick-based pricing”, pricing structures with “gotcha” elements that burn customer relationships over the long term but boost profits in the near term.
A year ago I purchased a new television at Wal-Mart with a one year warranty. It died a year and two weeks later. Considering purchasing a new one at Wal mart I was told warranties are now 15 days. Muttering out loud I said any new TV should come with at least five years… they said oh you can add 25/30 percent to the purchase list price for a three year extended warranty.
I walked out, leaving the TV in the basket at the cashier stand. And I am thoroughly enjoying life without television.
Who needs TeeVee when you’ve got NC?
Much of the componentry in electronics, including the control panel on your washer or microwave, is made by several manufacturing suppliers who vary in quality from total crud to excellent. But even major makers, like Asus in computer mainboards, maked duds once in a while and make them by the millions. There is no one to call them to rights and have the situation made good by a universal recall and replace on all of the duds. The key is that consumer protection is zilch.
1. I have had my JVC video/audio receiver for over ten years, it has been on at least eight hours, 325 days of the year (I go away for about a month each year) so that’s a lot of use. It’s still going strong.
2. My Klipsch speakers are priceless at $700/pair after 5 years and I’d like seconds.
3. My Canon 5d Mark II-another priceless item, and it was way, I mean way over priced but I love it and it will no doubt see at least ten years of service -so far after about 8,000 shots I can’t imagine anyone living without one.
4. In general -Buy way beyond what you think you need when it comes to appliances and be willing to be taken to the cleaners on the price; at least that way there’s a chance the thing will last. Not guaraneteed since even Canon (!?#) gives only one year of back up-and that’s limited.
5. There is no consumer protection on anything and rip offs abound. Makes the hunting all the merrier I think but it is maddening.
And the nauseatingly incessant celebration of the American ENTREPRENEUR is never far from theses monopolist’s lips.
Viva the precious American ideal of “competition.”
Great Stuff. Barry Lynn at New America Foundation has some very good stuff connecting the dots between anti-trust, monopolies, and the disproportionate economic gains going to capital vs labor
“They cost 0.5 – 4% of the cost of the transaction, which is cost …It’s like Paypal, only it’s not terrible.”
It seems BETTER THAN PAYPAL.
Paypal is raping people with 3% fee.
Who ‘overseas’ your spelling?
Clearly what we need here is a bigger public monopoly to solve this problem.
That would be better than the current PRIVATE monopolies…
Public monopolies generally deliver far better value to the user/consumer than private ones, health care being the obvious elephant in the room. Damnation by faint praise perhaps but true nevertheless.
Where cell service is terrible, it’s usually because NIMBY activists have blocked construction of an adequate number of cell towers to support the concentration of users in that area.
Well when you have rumors that it is or is not killing bees and so on, I guess people get worried.
Actually, it turns out that the most likely culprit for Colony Collapse Disorder, is the pesticides that crops are dusted with. It interferes with the honeybees ability to find their way back to the Queen.
It’s also why we have shitty FM reception. Much lip service is given to competition in the marketplace by the powers that be, but the reality is that they they try to eliminate it whenever possible.
Cell phone networks are a good example, and the US internet compared with more regulated countries would be an even better one.
But eliminating paper checks in favor of purely electronic transfer is a terrible idea for the elderly and working poor. Having ones rent check debited instantly, rather than taking a few days to clear (while waiting on the paycheck to cover that amount), would cause real problems for the tens of millions of us who carry a bank balance never more than a few hundred dollars above zero. The “grace period” that check-clearing often furnishes has been whittled down to almost nothing as it is.
Obviously soon enough we won’t be allowed to exist unless we can move our measly dollars out of our bank accounts faster, using some hundred dollar a month internet/phone service smart bundle we can’t afford to begin with…
Yeah, I have no intention of giving up my checkbook & refuse to allow any automatic payments from our bank accounts – given the proven vulnerabilities of the internet it seems foolish to do away with the minimal oversight of the written checks. When my account is debited there’s always a clear paper trail, one I can use to dispute a payment if necessary. Having a cell phone linked to a bank account seems to me to be a pure recpie for disaster. What if your cell phone is lost or stolen? (BTW, whenever I hear about someone using an ATM/debit card for an online transaction I cringe. People, use a credit card for that! You have a third party you can file a dispute with if you use a credit card, a debit card is simply a hole in your bank account) Outside of that quibble, however, Matt’s article is dead on.
Unless you use a prepaid debit card, as I do. If that card is lost or stolen, the only money the stranger will get is the money that is on that card. Once the money is gone, the card becomes unusable.
Matt Stoller: have you read, or at least skimmed, _Theory of the Leisure Class_?
It explains how first-generation industrialists build businesses which do useful things (Safaricom), while the second generation are financiers and have no interest in doing anything useful (US companies).
You address the problems and issues very well, but you totally miss the solution when you talk about anti-trust!
In these industries – telecom, internet, electricity, highways, banking, and a few more – there is no competition they are monopolies that preclude competition. The only solution is to develop government enterprises that can deliver the goods at a fair price and overseen by the user/citizens.
As one working for the very effective public power industry (20% of electricity), the costs can be much lower and public satisfaction much higher with public ownership. If Evo Morales can nationalize the electricity industry in Bolivia, it can be done here also.
Google’s gigabit internet in Kansas City (public power)costs $70/month which is less than Comcast’s lowest tier. It was estimated that it would only take $140B to provide this to the whole country. It will cost 10x as much if Comcast, AT&T, Verizon, Google, Time Warner, etc each put in their own system.
Anti-trust is a RED HERRING from an era that doesn’t exist anymore. Only public ownership of the common, monopoly spaces can provide a satisfactory solution.
Finally, some right wing redneck will say we don’t need any more usps, but they have looked at what the postal service and postal banks have been able to accomplish in China. Also, they have been prevented from really competeting with UPS and Fedex.
One of the reasons the banks don’t want faster check processing is because they rake in overdraft fees by delaying deposits. Because the law allows banks to have 5 days to clear transactions, banks simply “hold” a deposit saying the funds aren’t available for the full 5 days. Yet somehow the same bank can record and clear a withdrawal within a day. Indeed, banks used to apply all withdrawals before applying any deposits that cleared on the same day in order to maximize their ability to charge overdraft fees. This practice was stopped with the consumer protection act that was passed several years ago.
At any rate, “never attribute to stupidity that which can be explained by malice” or something like that :-) The banks can easily clear even paper checks within 1-2 days (and I believe most “paper” checks are scanned and cleared electronically these days anyway). They do so for withdrawals to prevent people from check kiting. But they have resisted the calls to codify their new technological abilities in the law for the simple purpose of extracting ever more fees from their customers.
I worked in ACH for years and they never update anything. Even just 2 years ago we were using enourmas dot matrix printers to print reports to then balance the books with 10 keys. The banks get to profit from the float so have no incentive to process quickly. NACHA sells training materials so they profit from complicated rules and process.
Even just 2 years ago we were using enourmas dot matrix printers to print reports to then balance the books with 10 keys.
What do you mean by this?
People shouldn’t be walking around talking on their phones anyway. Walking is a time for reflection and contemplation, so when they get where they’re going they’ll say something thoughtful or at least not stupid.
If they talk on the phone while walking it magnifies the stupidity by a factor of two — once during the call and second when they get where they’re going.
And what’s a chip compared to a wallet full of cash? What happens when somebody pulls the plug on the “cloud” and you can’t spend your chip? No man should live without the pleasure of a wallet full of cash, especially at a bar when the drinking is good.
My broadband cable works great and it has for years. Time Warner Roadrunner, I just have to be honest, it just works. Verizon billing is dishonest and it sucks and I cancelled my Droid (lost at the beach). What a stupid distraction it was. All it did was interfere with contemplation, foisting its nonsense at me until it finally lost itself in the sand. It finally did something useful!
Now I have a basic phone with an AT&T plan and $100 in pre-paid minutes at 10 cents/minute good for 1 year. No monthly bill. It’s a good deal.
You don’t need all these big corporations. Just one or two and you can sometimes get lucky with them.
Matt Stoller has argued “Antitrust is the key problem here. Without restraint on behavior, corporate executives will work to grab as much market and political power as possible because only market power and political power allows them to have pricing leverage without investment, risk or innovation. Competition is the enemy of these businessmen.”
Is the left/progressive/liberal side of the political spectrum also prepared to consider a type of grass-roots participatory entrepreneurship which might also increase competition at a time when collapsing economies of scale and scope (for example3-D printing and artisan skills) make the populist dreams of the 1880s (one’s own shop, piece of land and house), strangely enough, perhaps a more likely possible reality in the second decade of the 21st century.
Or framed from a different angle, the question becomes–whether the creation and reach of bureaucratic concentrations of power in both the public and private sectors over the past 130 years have sapped the independent self-organizing capacity of individuals and local communities.
Does there still exist within our general population the desire for autonomy, control over the working day and the sense of self-respect and freedom that such control seems to offer?
In addition, has the left/progressive/liberal side of the political spectrum lost faith in the possibility of self-organization and cooperation among the general population and instead remains content to place its hopes for change largely in the manipulation of the traditional levers of bureaucratic power while leaving that same structure of power (in both the public and private sector) largely in tact?
It’s good to have a government with the legal authority, organization, and wallet to e.g. enforce civil rights and guarantee a basic standard of living. Admittedly today’s U.S. government is doing a poorer job of those than it used to (and it was never that good at it), but I’m skeptical that smaller-scale organizations could do better for the nation as a whole.
As heresy101 argues above, we need public enterprises. Banking should be a public utility; just as government mints/coins currency that replaced private banknotes, it should set up electronic money transfers to replace private payments and transfers, which as Stoller notes, impose private taxation on transactions.
Telecommunications also need to be a private utility.
I meant telecommunications should be a public utility.
What’s the world coming to — a “nihil obstat” for a heresy!
Along with Google, FaceBook, and the banks.
I use Verizon and get great service.
Film at 11: Irony not dead?
I have to be cynical about this too?
there are some very evil people in very high places doing some very evil manipulation of the economy and society (social engineering).
The word ‘evil’ is overused and extends too much power to people who at best are Selfish fools. Perhaps selfish due to sociopathic fears and anxieties that dominate their personal and professional lives. In other words, abject failures in human relationships of loving and sharing.
Thank you Matt for pointing out that Americans are being treated like the worst of the World’s second class citizens. This is true in many areas of our lives.
1. We have some of the best health care providers in the world but many citizens, especially residents of the larger inner urban areas and folks in rural areas, receive terrible care or none at all. The system is basically broken for almost everyone who tries to use it.
2. Japan, Australia, Chine and New Zealand lead the world in the development of transportation systems and it makes sense that this portends the Pacific Rim being the center of a world class culture in the next decade. The United States will slouch into another low second class rating on places the rest of the world will want to visit simply becuase we live in a dump when it comes to getting around.
3. Our endeavors in the performing arts- serious art music, ballet, theater and opera – are likewise slipping into the status of a second world class arena. New York City can barely maintain two full time symphony orchestras, London has seven or eight
4. We have no respect for our cities; they languish in squalor. These links will show the truth and comparisons are apt
Much of Detroit looks like a bombed out WW II European city of 1945
http://detroiturbex.com/content/industry/index.html and http://detroiturbex.com/why/index.html
This site does not exaggerate – I have seen some of these scenes just a few weeks ago. They are real and virtually omnipresent in Detrot.
Compare this skyline photo of Tokyo with anything the US might have in one of our larger cities.
And why does a smaller sized country like Japan have one of the world’s largest and most dynamic cities?
here’s Hong Kong
Time to stop-no need to go on-corporate moguls are happy to move the wealth off to their corner of Manhatten, or Connecticut or Grosse Pointe or Knob Hill. The rest of us get broken roads, broken cities and a broken culture.
Take a cab in Bangkok and the driver will tell you, matter-of-factly, that they’re building a new SkyTrain line for a new part of the city. And we can’t even manage to build a tunnel under the Hudson for a critical rail chokepoint we know is going to fail.
[pounds head on desk]
Americans should be much madder than they are about this, US infrastructure looks like the Third World. Or should I say, looks like the Third World USED to look, now that airports in places like Thailand and Malaysia are just stunning.
Then again, Americans should be much madder about LOTS of things, from Obomba’s refusal to prosecute financial fraud to corporate America’s refusal to deliver decent mobile phone service.
Most countries forced a single cellphone protocol on the entire country, most selected GSM. But Oh No, America had to have “free markets” so we ended up with a patchwork of different protocols and providers, so when you drive along your call might get handed from one protocol to another…way too complicated.
Maybe instead of sending bombs to foreign nations, the US should send scientists to study how to build a bridge or how to build an airport or how to build a mobile banking system.
“…corporate power in every industry from cable to railroads to rental cars to banking to health insurance to pipelines has skyrocketed. The result has been inefficiency and price gouging”
Monopolies are the killer of innovation and progress. Cell phones are the least of my concerns. I pondered the cellphone/banking services dilemma as I made a cup of tea while waiting for the whistling of the tea kettle since my microwave died three years after purchase; a hanging icon of americana obsolence and foolish dollars spent above my working stove. There I stood wondering why I’m driving a newer model of my great great grandparents gasoline driven combustible engine invented in 1886 (hybrids are a recent 2000 phenomenon with a negligible share of the market). Next,I looked out the window at the telephone lines and electric wirecables and poles not much different from 1878 and 1885 and it occurred to me while watching the morning downpour the basement might flood due to the antiquated water and sewage systems.
I also cross my fingers while driving over dilapidated bridges wondering if I could recall what to do if the bridge fails and the car submerges? Better to trust the public railway systems? Not really, just another faith based system of crossing my fingers hoping for the best in maintenance and repairs.
Seriously, it makes me want to throw up my hands and jump onto my trusty bicycle with pedal and rotary cranks invented in 1861.
Like so many other areas of stautory law, the judiciary has absolutely beaten the staturoty anti-trust law to a pulp with its judicial opinions. Add in the long delays to get an anti-trust law case tried in major metropolitan areas and the anti-trust laws have been a toothless-tiger for quite some time.
Anti-trust law, with its treble damage provision, was supposed to be a real deterrent to monopolistic behavior. But getting trebble damage awards at all, much less getting them upheld on appeal, has become the rare exception rather than the rule; so as a deterrent the laws have failed.
This is what happens when pro-big-business judges are appointed (or elected) to the bench, which is where most of the judiciary comes from. Very few members of the present judiciary had previous careers of representing people or small business. The majority of the judiciary’s sympathies do not lie with the little guy. The little guy gets lip service from the courts and not much else.
So I would not be optimistic that a return to more filings of anti-trust actions will do much good until we have a complete overhaul of the judiciary’s sympathies for the weaker amongst us. I don’t see such a judicial overhaul happening in my lifetime. In fact, the trend is getting worse, not better, as more and more young lawyers, saddled with huge educational debts, are being forced to work for big business.
Antitrust was not destroyed by Reagan. It was a concerted campaign by scholars from the University of Chicago. Rockefeller, the greatest monopolist in the history of the world, was right when he called founding the university of Chicago the “best investment” he ever made.
Antitrust is a greate example of how successful concerted intellectual sabotage in leading universities and think tanks to influence policy and public debate really is. The agenda is to effect and increase economic and political power in favour of a small elite at the expense of the general public.
It’s crooked since academic and intellectual arguments demand fairness and objectivity. But self-iterest dictates these spinmasters are not playing fair. They pursue a clear agenda between the lines. Of course, they don’t come out and say “these antitrust laws ruin the profits of the greedy monopolists who pay us”. They invoke some abstract, “scientific” concept of consumer welfare and efficiency (which never held up to scrutiny, see source at the end). They spin things full circle in such a way that to increase consumer welfare you have to effectively abolish antitrust. Add in a couple of nobel prizes to underline your objective, academic authority and bang: antitrust is effectively gone and you have “free” markets where the concentration of economic power is again unchallenged by regulators.
Antitrust is just a particular example of concerted sabotage of intellectual and public debate. Such efforts have been so successful that the concentration of economic power now reaches levels that seriously threaten democractic society and the stability of the economic system. I hope everyone is smart enough to swing back the pendulum towards proven policies of the post-war era that were effective in creating a more healthy balance of power and a more prosperous economy.
Chicago School of economics:
Example of chicago spin influencing supreme court:
Some further reading on the history of thought in antitrust which illuminates the Chicago spin:
“Antitrust is the core problem”
Trusts are the problem. Antitrust law is an attempt to a thwart trusts.