[ Its no Marxist critique of class power--would that it were--but
Matt Stollers Goliath, aimed at moving the Democratic Party off dead
center, slams all the right enemies in urging the resuscitating of the
anti-monopoly tradition of the 20th century] [[link removed]]

PORTSIDE CULTURE

MONOPOLY AND ITS DISCONTENTS  
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Gerald Berk
October 9, 2019
The American Prospect
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_ It's no Marxist critique of class power--would that it were--but
Matt Stoller's Goliath, aimed at moving the Democratic Party off dead
center, slams all the right enemies in urging the resuscitating of the
anti-monopoly tradition of the 20th century _

Anti-monopolism became a keystone of the New Deal thanks to the
efforts of Democrats like Senator Wright Patman, shown here at center,
beaming down at FDR in 1942., AP images // The American Prospect

 

In 1974, the Watergate babies swept into Congress to clean house and
revolutionize government. This new generation of Democrats rewrote
presidential nominating and committee appointment rules, and
transformed the party’s economic agenda from equality to national
competitiveness, innovation, and entrepreneurship. Among the displaced
was the longtime chair of the House Banking and Currency Committee,
Wright Patman. It made no difference that Patman initiated the
Watergate investigation, or that he had led the fight to rein in
corporate power since the New Deal. The New Democrats saw an
anachronism who deified small business, the family farm, and
restrictive labor unions in an age of global competition, stagflation,
and technological change.

The deposing of Chairman Patman is a pivotal moment for Matt Stoller,
author of _Goliath: The 100-Year War Between Monopoly Power and
Democracy_. It signaled not only the Democratic Party’s abandonment
of anti-monopolism; it ushered in an era of political amnesia that
makes Americans unable to understand the relationship between
financial oligarchy, commercial monopoly, and authoritarian politics
in our own time.

 

Goliath: The 100-Year War Between Monopoly Power and Democracy
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By Matt Stoller
Simon & Schuster; 608 pages
October 15, 2019
Hardcover:  $29.95
ISBN13: 9781501183089

 

Simon & Schuster
 

A history of and for the present, _Goliath_ seeks to recover and
explain the anti-monopoly tradition of the 20th century. Wright Patman
is center stage. Anti-monopolism, Stoller explains, is much more than
an ideology. As Patman—and Louis Brandeis before him—teaches us,
anti-monopoly is a mode of democratic inquiry, necessary for political
and economic agency. For anti-monopolists, democracy and markets are
fragile, easily undermined by concentrations of power and a people
insufficiently independent from oligarchy to shoulder the burdens of
positive liberty and democratic citizenship. Democracy and markets
necessitate vigilant inquiry: How is monopoly power acquired,
consolidated, concealed, abused? How is it unmasked, taken down, and
prevented? Anti-monopolists are not, as is so often charged,
anti-intellectual. Committed as they are to democratic agency, they
are hell-bent on unmasking academic obscurantism, false necessity, and
apologetics for power.

There is no greater way to entrench power, Patman said, than to
convince plain people that finance is too hard for them to understand.
For Patman, as for populists before him, democratic government was a
schoolroom. He used congressional committees to study and publicize
the techniques of monopoly power. With Patman as his guide, Stoller
explains with great clarity how bankers took control of industry and
politics in the 1920s and the 1970s by inventing byzantine financial
instruments to hide double-dealing, circumvent regulation, monopolize
industry, and mobilize a broad constituency for their anti-democratic
project.

While _Goliath_ begins with Woodrow Wilson’s efforts to dismantle
the House of Morgan’s vast network of monopolies in oil,
manufacturing, and transportation, Stoller’s most original
contributions involve the revolt against Andrew Mellon’s empire in
the New Deal, the role of anti-monopolism in the New Deal order, and
the formation of financial oligarchy and commercial monopoly since
1960.

Andrew Mellon learned his trade from J.P. Morgan. By the time he
became Secretary of the Treasury for three straight Republican
presidents in the 1920s, Mellon owned a network of 99 banks through
which he controlled critical junctures in the economy—coal, steel,
aluminum, electricity, chemicals, and rails. Though Mellon’s empire
paled in comparison to Morgan’s, he developed an asset Morgan
lacked: control over the administrative state. Harding appointed
Mellon Secretary of the Treasury in 1921, a job he held until 1932. As
progressive Senator George Norris said, three presidents served under
Secretary Mellon.

Stoller imaginatively reconstructs “Mellonism” and Patman’s
revolt against it. The stock market crash of 1929 unleashed a series
of public investigations and lawsuits, which elicited a detailed
record of financial manipulation, predatory competition, self-dealing,
and political corruption. Stoller mines those archives to explain how
Mellonism worked, how Patman led anti-monopolists in his party to
dismantle it, and how the Democrats created institutions to prevent it
from reconsolidating. Anti-monopolism became a keystone of the New
Deal order, turning banking into a quasi-public utility, fragmenting
industrial power, nurturing independent farming and commerce, and
reining in employer power over unions.

By the end of the 1980s, the anti-monopoly tradition had
disappeared—its institutions turned instead to reconsolidating
financial oligarchy and commercial monopoly and bailing them out when
they failed. There was nothing inevitable in this process. No
scientific laws of modernization, capitalist development,
globalization, technological change, or industrial economics explain
the consolidation of economic power and corruption of democracy. Three
deliberate projects, begun in the 1950s, had to converge: the Chicago
school’s law and economics movement, the creation of an unregulated
market in hot money, and the consumer movement.

Initially favorably devoted to antitrust, Chicago school economists
had to rethink competition and convince lawyers that monopoly was
unproblematic, as long as it didn’t raise prices. Similarly, it took
a great deal of work for Citibank’s CEO, Walter Wriston, and his
allies to build a market for tradable financial instruments that could
enable industrial mergers and circumvent regulation. Consumer
advocates, led by Ralph Nader, had to square their support for the new
social regulation with their opposition to antitrust. Different as
they were, economists, financiers, and consumerists worked
independently and together to reconfigure legal pedagogy and
indoctrinate politicians. They succeeded in enacting legislation and
making judicial and administrative appointments to dismantle New Deal
financial regulation and antitrust. By 1992, antitrust had disappeared
from the Democratic Party platform and an active market for mergers,
acquisitions, and short-term stock gains held the whip hand over
corporate management. With anti-monopoly a distant memory, it became
harder and harder for Americans to understand the rise of monopoly
power in retail and the tech platform economy, why the crash of 2007
entrenched those who caused it, and the victory of authoritarian
politics.

_Goliath_ delivers. By carefully recounting anti-monopoly’s
contributions to liberty, democracy, and prosperity in the 20th
century, Stoller teaches his readers how to perform anti-monopoly
inquiry themselves. We learn how to see and analyze economic
power—how it’s created, circulates, and corrupts—and how to
oppose, disentrench, and prevent it from returning. These are
invaluable and timely lessons, as the center-left mobilizes to reverse
authoritarianism.

This is a lot to accomplish. Even so, _Goliath_ has two blind spots,
which limit its ambitions: race and liberal corporatism. Both warrant
historical criticism, so anti-monopoly’s teachings can be more
relevant today.

Wright Patman represented a Texas district with a proud populist and a
segregationist legacy. Stoller says Patman walked the line between
them. He fought the Klan in the 1920s and cultivated black electoral
support throughout his career. But segregationists supported him, and
he signed the 1956 Southern Manifesto against _Brown v. Board of
Education_ in order to be re-elected. Influenced by Southerners like
Patman, the New Deal was a mixed bag for civil rights. In Stoller’s
view, it locked African Americans out of social provision and housing
markets, but provided the civil rights movement with constitutional
resources and organizing models critical to its success.
Anti-monopolism and segregation, in short, were tragic, but
fundamentally incompatible, partners.

Perhaps. We need to know a lot more about the context and consequences
of Patman’s actions to assess whether anti-monopolism and racism
were incompatible. Given the state of knowledge about anti-monopoly
and racism, those who want to revitalize the anti-monopoly tradition
(myself included) must probe more deeply. The historical record is
mixed. On the one hand, Michael Kazin, Chip Berlet and Matthew Lyons,
Daniel HoSang and Joseph Lowndes, and Sarah Jaffe show how
anti-monopoly’s producerist ideology can look down as readily as up
to identify adversaries. When it does, immigrants, African Americans,
and women are coded as nonproducers alongside bankers and monopolists,
equally worthy of vilification, regulation, and exclusion. On the
other hand, studies of black chapters of the Farmers’ Alliance by
Lawrence Goodwyn, Gretchen Ritter, and Omar Ali; the importance of
antitrust in protecting black businesses which supported the civil
rights movement by Brian Feldman; and anti-monopoly support for Native
Americans in Portland, Oregon, by Robert Johnston show how
anti-monopoly and racial movements work together toward interracial
freedom from economic oppression.

The debate over these contradictory findings is productive when it
empowers us to ask how economic power works and how movements for
racial and economic justice work at odds and together; it becomes
unproductive when it turns into a doctrinaire fight over whether the
white middle class is _inherently_ racist. In Patman’s case, we
need to know how segregationists in his district understood the
association between producerism and racism and whether Patman’s
actions put light between that relationship. Did anti-monopolism
reinforce or loosen paternalism in his relations with black
constituents? Answering these sorts of questions will teach us a lot
about how to break the ties between producerism and racism today and
how to turn the anti-monopoly tradition toward racial justice instead.

_Goliath_’s second blind spot is liberal corporatism. Best
conceptualized at mid-century by John Kenneth Galbraith, this is the
idea that we ought not worry about monopoly, because it is inevitable,
efficient, and naturally spawns countervailing powers in unions,
consumer groups, and the state. In Stoller’s grand narrative,
corporatism—whether Hamiltonian, fascist, or liberal—always
clashes with anti-monopolism. While this frame illuminates the
conflicts between Roosevelt and Wilson in 1912, the National Recovery
Administration and antitrust in the 1930s, and the New Democrats and
Patman in the 1970s, the relationship between anti-monopolism and
liberal corporatism was much more diverse in practice. It needs
careful conceptualization.

By Stoller’s own lights, anti-monopoly cleared the way for a variety
of projects in the New Deal order, including countervailing powers.
Under pressure from antitrust enforcement and the anti–chain store
movement, once-dominant supermarket A&P incorporated unions, a retail
clerks association, and consumer groups into its organizational
structure. Similarly, it was not antitrusters alone who broke up
Mellon’s aluminum monopoly in the 1940s. Military planners directed
state investment into new competitors. Or consider Tom McCraw’s
account of securities regulation. Although anti-monopolists were
responsible for the Securities Exchange Act of 1934, the SEC became
successful because it organized countervailing powers to investment
banks in the American Institute of Accountants, the National
Association of Security Dealers, and the New York Stock Exchange’s
regulatory mechanisms.

It may be that anti-monopoly served two purposes in the New Deal
order. By dismantling Mellonism and fragmenting industrial monopoly,
it opened the way to countervailing powers inside and outside of
corporate enterprise. Once in place, the ongoing threat of antitrust
action acted as a penalty default for corporations that were tempted
to amass power by oppressing workers, small investors, subcontractors,
communities, and less powerful competitors. Galbraith was right about
countervailing powers, but wrong that they were inevitable and that
antitrust was anachronistic. The opposite, Stoller shows, is closer to
the truth: Antitrust was necessary for the emergence and effectiveness
of countervailing powers. But although anti-monopoly was a necessary
condition for regulation, collective bargaining, and welfare
provision, other traditions had a say in their design and execution.

Taking care to conceptualize the relationship between anti-monopolism
and other ideological traditions isn’t just an academic or
historical exercise. It is a pressing political problem, because
anti-monopolism has returned to public debate at a moment when the
Democrats are more divided ideologically than they have been since the
1960s. Seen as an epilogue to _Goliath_, the current Democratic
presidential primary looks a lot like the election of 1912—a battle
between socialists (Eugene Debs then, Sanders now), anti-monopolists
(Wilson then, Warren now), and liberal corporatists (Theodore
Roosevelt then, Biden now).

But Democrats of all stripes speak the language of anti-monopoly now,
whether they acknowledge it or not. Some, like Warren, speak it in a
pure form. Others combine anti-monopoly inquiry with rival forms of
analysis, which look incompatible at first glance. Sanders’s plan
for rural America combines anti-monopoly and class analysis to explain
how corporate monopolies turned independent farmers into an
impoverished proletariat through an oppressive subcontracting system.
His solution is antitrust and price supports, not public ownership.
Neoliberal corporatists Hillary Clinton, Mark Warner, and Amy
Klobuchar, who once saw government regulation as the primary obstacle
to technological innovation and entrepreneurship, now place tech
monopolies atop their list.

Imagine this epilogue to _Goliath_ has a happy ending and an
anti-monopolist like Warren wins the presidency. While wielding the
power of the executive branch and its antitrust authorities is
considerable, it’s unlikely she will be able to fully dislodge
democratic socialists or neoliberal corporatists without undermining
the vitality they bring to the party. As in the New Deal,
anti-monopoly will do its best political and institutional work in
combination with other traditions. A party at war with itself, which
fashions new and effective ways to use the anti-monopoly tradition,
may have a future. Democrats who seek to revitalize their party would
do well to study Matt Stoller’s _Goliath_ and incorporate—in a
complex and thoughtful manner—its central teachings.

_Author Matt Stoller is a Fellow at the Open Markets Institute.
Previously, he was a Senior Policy Advisor and Budget Analyst to the
Senate Budget Committee. He also worked in the US House of
Representatives on financial services policy, including Dodd-Frank,
the Federal Reserve, and the foreclosure crisis. He has written for
The New York Times, The Washington Post, The New Republic, Vice, and
Salon. He lives in Washington, DC. Goliath is his first book._

_[Essayist GERALD BERK teaches political science at the University of
Oregon.]_

_Read the original article at Prospect.org
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_Used with the permission. © The American Prospect, Prospect.org
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