Significant legal cases and corporate actions have recently drawn attention to monopolistic practices, raising the importance of antitrust issues within the public discourse. From the recent court ruling deeming Google a monopoly to ongoing concerns about the potential merger of grocery giants Albertsons and Kroger, and allegations of rent-setting software enabling landlord collusion, these developments call for a deeper understanding of antitrust history.
Seeking a better understanding of these topics, RSF Director, Rich Nymoen, JD recently interviewed fellow Director, Christopher England, Ph.D., the author of Land and Liberty: Henry George and the Crafting of Modern Liberalism. This post provides a faithful accounting of that conversation, which examined the origin of antitrust, its evolution, and its contemporary relevance, drawing upon historical milestones and the ideas of important economic reformers, including 19th century social reformer Henry George.
Rich: Since your book, Landed Liberty: Henry George and the Crafting of Modern Liberalism, touches on the historical aspects of antitrust, I think this is an opportune time to explore how this history might relate to current events. To start us off, can you clarify what is meant by the term “antitrust,” and how it might differ from anti-monopoly efforts?
Christopher: That’s a great question. The term “trust,” as it relates to monopoly, actually originates from 1882 with John D. Rockefeller. In the 19th century, corporations in the United States were typically chartered at the state level, and each state had its own set of regulations, which often included special taxes on out-of-state corporations. This made it cumbersome for corporations to operate across different states. To bypass these state-level restrictions, Rockefeller began merging various businesses into a larger entity—a trust—where all the participating companies essentially pooled their interests. This arrangement was governed by a board of directors that oversaw different parts of the trust.
In essence, a “trust” became a means to circumvent regulations designed to limit the size and power of businesses, and it eventually became synonymous with the term “monopoly.” Although business trusts in the original sense don’t exist today, the language stuck. There’s a subtle distinction worth noting: historically, economists like Adam Smith used the term “monopoly” more broadly. Smith defined a monopoly as any market condition that allowed an entity to charge prices above what would be expected in a competitive market—essentially, any situation where supply was restricted, such as land (a finite resource) or legally protected patents.
“Trust,” however, came to embody a narrower definition in the late 19th century. It represented the way Americans began perceiving monopoly as something connected to large, powerful firms consolidating to dominate market share, or even the entirety of a market. So, while “antitrust” and “anti-monopoly” are often used interchangeably today, antitrust generally refers to the concerted effort to prevent large firms from exercising outsized control over markets.
Rich: I see. So, to clarify, would you say that antitrust efforts differ fundamentally from anti-monopoly initiatives, or are they essentially the same?
Christopher: That’s a nuanced point. The two terms have evolved over time. While today they largely mean the same thing, historically, “monopoly” was seen as more diffuse and didn’t necessarily imply one firm controlling an entire market. Antitrust, on the other hand, tends to focus on addressing the power of large, dominant firms. But in contemporary usage, they’re quite similar.
Rich: That’s helpful. Could you walk us through the main approaches the United States has historically taken to address these issues, and perhaps provide a chronological overview?
Christopher: Certainly. The first major legislative effort was the Sherman Antitrust Act of 1890, which aimed to address combinations that restrained trade. However, the language of the Act was vague, and it didn’t provide clear guidelines on what constituted illegal behavior. Initially, the Supreme Court interpreted it in such a way that even companies controlling up to 90% of a market could evade prosecution. Ironically, the Act was more frequently used against labor unions, as strikes were seen as obstructing trade.
It wasn’t until Theodore Roosevelt became President that the Act’s enforcement broadened. Roosevelt was able to persuade the Supreme Court to adopt a more expansive interpretation, allowing for the breakup of companies that were monopolizing markets. His successor, William Howard Taft, pursued even more antitrust cases, and under President Woodrow Wilson, the Clayton Antitrust Act was passed. This Act sought to define specific practices that restricted competition, such as interlocking directorates, where the same individuals served on the boards of competing corporations.
Antitrust enforcement saw a decline in the 1920s, and even during the early years of the New Deal, there was a push for cooperation between large businesses to manage supply. However, by the latter part of the New Deal era, figures like Thurman Arnold revived aggressive antitrust enforcement. During World War II, the fight against monopolies was seen as crucial to preserving democracy, and in the post-war period, new federal powers were introduced to block mergers before they could occur.
Rich: Interesting. How do Henry George and his followers fit into this history of antitrust or anti-monopoly efforts?
Christopher: Henry George belonged to a school of thought that viewed monopoly as something deeply embedded in society. For him, land was the ultimate monopoly because it’s a finite resource, and certain types of land—like those needed for transportation routes or pipelines—could effectively prevent others from engaging in commerce.
George and his followers were skeptical of regulation as a solution because they saw how easily businesses could influence and undermine regulatory efforts. They believed that regulation alone was often insufficient and prone to being circumvented by corporations. Instead, George advocated for taxing the economic rent from land, which he viewed as the primary source of unearned wealth in a monopoly. By taxing this rent, George believed society could address the problem of monopoly more effectively and equitably.
Rich: That brings me to the Monopoly board game. Could you explain its connection to these issues?
Christopher: The Monopoly game was originally invented by Lizzie Magie to popularize Henry George’s ideas. As you might know, the game illustrates how, as players accumulate property and build houses or hotels, land values increase, ultimately concentrating wealth in the hands of one person. In the original version, however, there was an alternative set of rules where profits were redistributed, demonstrating how shared wealth could benefit everyone.
Ironically, when Parker Brothers commercialized the game, they removed the alternative rules and aggressively protected their intellectual property, thus embodying the very monopoly principles the game was meant to critique. They effectively monopolized the game itself, which is a fascinating twist on the original intention.
Rich: Were the alternative approaches proposed by the game—community rent collection and public ownership of natural monopolies—ever implemented in real life, and if so, with what results?
Christopher: Yes, in certain instances, these ideas were tried. For example, some cities implemented land value taxes, and others established public ownership of utilities, like streetcars and electricity. These measures were meant to ensure that the benefits of natural monopolies, such as essential services, were shared among the public. Additionally, there were legislative efforts like the Water Power Act, which capped profits from water power, reflecting George’s idea that monopolistic profits should be regulated or taxed for public benefit.
Rich: Why haven’t these approaches been more widely adopted?
Christopher: I think it’s because antitrust efforts, which target large corporations, are more politically palatable. They focus on powerful elites, which doesn’t require much from the average voter. George’s approach, however, implied that monopoly was a broader societal issue, and many people, particularly landowners, were reluctant to support policies that might diminish their own economic advantages. There’s a resistance to the idea of shared responsibility, even though such approaches might lead to more equitable outcomes.
Rich: Given today’s context, where several industries are dominated by a few companies, do you think George’s approaches remain relevant?
Christopher: Absolutely. Modern regulatory efforts often struggle to keep pace with corporate strategies. A Georgist approach, such as a wealth tax or taxing land values, could be more effective because it directly addresses the accumulation of unearned wealth. Even contemporary thinkers like Thomas Piketty have argued for wealth taxes as a means to combat inequality. These ideas still hold significant relevance in today’s debates about economic fairness and competition.
Rich: What about the idea of public ownership of natural monopolies? Is that still a relevant solution?
Christopher: It’s more complicated today, given that many modern monopolies—like Google or social media platforms—derive their power from network effects, which are less tangible than land. Direct government ownership may not always be feasible or desirable. However, taxing excess profits or capping returns could still be viable strategies to ensure that monopolistic gains are redistributed in a way that benefits society.
Rich: One last question, Christopher. Why do you think Henry George’s ideas aren’t more widely discussed today?
Christopher: Interestingly, there has been a resurgence in interest recently, especially with growing concerns over economic inequality. Scholars like Thomas Piketty and advocates like Matt Stoller are revisiting George’s ideas, particularly around land taxation, as they search for more effective solutions to today’s challenges. So, perhaps George’s ideas are beginning to find their place in contemporary discourse once again.
Rich: Thank you, Christopher. That was incredibly insightful. Any final thoughts?
Christopher: No, I think we’ve covered it all. Thanks for having me, Rich.
Rich: Thank you. It’s been a pleasure.
This conversation walked us through the history of antitrust and anti-monopoly efforts, revealing a continuous struggle to balance market competition with the realities of corporate power. From the vague provisions of the Sherman Act to the more targeted reforms of the Clayton Act, American lawmakers have grappled with how best to preserve competitive markets. Yet, as Henry George and his followers recognized, monopolies extend beyond individual corporations—they are embedded within the very fabric of society, particularly in the ownership of land and other finite resources.
In light of contemporary challenges posed by large corporations in sectors such as technology, housing, and utilities, Georgist approaches to taxation and public ownership remain relevant. While the political feasibility of these ideas may vary, they offer valuable insight into how society might address the persistent issue of monopoly in a rapidly changing economic landscape. As policymakers and the public continue to confront these issues, the lessons of history—and the ideas of reformers like Henry George—should not be overlooked.
