Senator Elizabeth Warren again showed why working people love her and Big Business hates her. She told the truth about oligopoly in this nation.

The title of her speech yesterday was : “Reigniting Competition in the American Economy” She gave the Keynote Remarks at New America’s Open Markets Program Event

Sen. Warren’s thesis:

But today, in America, competition is dying. Consolidation and concentration are on the rise in sector after sector. Concentration threatens our markets, threatens our economy, and threatens our democracy.

Yes, she wants to stop the concentration of business, and she named names.

Evidence of the problem is everywhere. Just look at banking. For years, banks have been in a feeding frenzy, swallowing up smaller competitors to become more powerful and, eventually, too big to fail. The combination of their size, their risky practices, and the hands-off policies of their regulators created a perfect storm, resulting in the worst financial crisis in 80 years.

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In the last decade, the number of major U.S. airlines has dropped from nine to four.

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The list goes on. A handful of health insurance giants—including Anthem, Blue Cross Blue Shield, United Healthcare, Aetna, and Cigna—control over 83 percent of the country’s health insurance market.

Three drug stores—CVS, Walgreen’s, and Rite Aid—control 99% of the drug stores in the country.

Four companies control nearly 85% of the U.S. beef market, and three produce almost half of all chicken.

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Consider Comcast, the nation’s largest cable and internet service provider. Comcast has consolidated its position by buying up rivals. Today, over half of all cable and internet subscribers in America are Comcast customers.

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Google, Apple, and Amazon provide platforms that lots of other companies depend on for survival. But Google, Apple, and Amazon also, in many cases, compete with those same small companies, so that the platform can become a tool to snuff out competition.

It’s along and detailed, even wonky speech.

Senator Warren looks at the purposes of antitrust law. Yes, oligopoly and go hand in hand with oligarchy.

Congress created antitrust law to address the concentration of wealth and power in the hands of the few, passing the Sherman Anti-Trust Act and Clayton Anti-Trust Act. Progressive-Era reformers like Teddy Roosevelt, William Howard Taft, and Woodrow Wilson were trust-busters, people who fought the power that monopolies wield in the economy and in politics.

The original purpose of these laws was to fight concentrated economic and political power. One hundred years ago, Congress understood that these two factors were forever intertwined. Arguing for passage of the Sherman Act in 1889, Senator John Sherman famously declared: “If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessaries of life.”

A generation later, Supreme Court Justice Louis Brandeis worried that the “concentration of economic power” was so great that “private corporations are sometimes able to dominate the state.” The corporate system was becoming akin to the “feudal system,” that would mean “the rule of a plutocracy.” Brandeis declared that without vigilance, our government would be controlled by the very rich and the very powerful.

Here is a brief snippet of her proposed solutions:

We can start with a President and an Executive Branch willing to once again enforce our laws in the way Congress originally intended them to be enforced. We have the tools—right now—to reinvigorate antitrust law. Here are three ways to do it:

First: Hold the line on anticompetitive mergers. The DOJ and FTC are at the front lines of the battle over mergers.

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Number Two: Closely scrutinize vertical mergers. Vertical monopolies exist when one company owns multiple parts of its supply chain – manufacturing, production, distribution, and sales. Again, size creates an advantage. When there’s no competition anywhere in the chain, other businesses are locked out and die. The DOJ and FTC should approach vertical mergers with the same skepticism as horizontal mergers. As an aside, the guidelines that apply to vertical mergers haven’t been reissued since 1984, and the world has changed a lot since then. Revising those guidelines would be a good start.

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Number Three: Require ALL agencies to promote market competition and appoint agency heads who will do so.

But it requires more:

But we need something else too – and that’s a revival of the movement that created the antitrust laws in the first place.

For much of our history, Americans organized and protested against the forces of consolidation. As a people, we understood that concentrated power anywhere was a threat to liberty everywhere. It was one of the basic founding principles of our nation. And it threatens us now.

Competition in America is essential to liberty in America, but the markets that have given us so much will become corrupt and die if we do not keep the spirit of competition strong. America is a country where everyone should have a fighting chance to succeed—and that happens only when we demand it.

Steve G. wrote:
Didn't Teddy Roosevelt give the same speech?

August West wrote:
Capitalism 101