BOOK REVIEW: “Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age.”

In the first chapter of her new book, “Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age,” Senator Amy Klobuchar tells the story behind the board game “Monopoly”, her favorite game growing up. She recounts how the earliest known version of the game was patented by Lizzie Magie in 1904 under its original name, the Landlord’s Game, in order to promote the ideas of Henry George. Klobuchar explains that Magie’s original game was designed as a protest to the big monopolies of her time and had two sets of rules – one in which a monopolist can crush opponents by virtue of monopoly holdings and one in which land rent was pooled and spread in a more egalitarian fashion across the board.  Oddly, she neglects to mention another key component of the alternate rules, i.e. that the players could elect to put “natural monopolies” — the railroads and electric and water utilities – under public ownership.

Klobuchar goes on to tell the story of the rise of Gilded Age monopolies such as those in the railroad, steel, oil and other industries.  She also gives an account of Progressive Era efforts to fight these monopolies through the organizing of labor unions, political efforts such as the Anti-Monopoly party, and legal measures such as the Sherman Antitrust Act.  She has a chapter on trustbusters such as Teddy Roosevelt, Louis Brandeis and Robert La Follette but then explains that – except for the breakup of AT&T in the 1970s — the one hundred years that has passed since the Progressive Era has been much tamer with regard to fighting monopolies. Reasons for the tameness include periods of economic stagnation and war that had more immediate needs taking preference, the political bent of the Reagan/Bush eras, and a dominant conservative ideology in the courts. 

She then catalogues the ills stemming from the industry consolidation that has resulted from the tame anti-monopoly efforts.   These include inordinate control over the political process through immense lobbying and campaign contributions, high prices due to low competition from other sellers, and low wages because workers have few employer options (In 2010, the tech companies Adobe, Apple, Google, Intel, Pixar and Lucasfilm settled a Justice Department probe by agreeing not to enter into the no-hire agreements with their competitors that were holding down the salaries of software engineers).

Examples of this consolidation include an airline industry dominated by four airlines, an internet search engine market dominated by one company (Google) and an online travel industry controlled by Expedia and Booking Holdings (even though the multitude of branded websites they own give the illusion of wide choice).  Four food companies control 82 percent of beef packing, 85 percent of soybean processing, 63 percent of pork packing and 53 percent of chicken processing.  Six media giants – GE, News Corp, Viacom, Time Warner, and CBS – control 90 percent of American media. Three online platforms – Google, Facebook and Amazon – account for 70 percent of the U.S. digital ad market. Four companies – Ernst & Young, Deloitte Touche, KPMG and Pricewaterhouse Coopers- dominate the accounting industry and five companies – Bertelsmann (which controls Penguin Random House), HarperCollins, Simon & Schuster, Hachette Book Group and Macmillan control the publishing industry. Seventy-five percent of metro health care markets are “highly concentrated.” In agriculture, the number of U.S. dairies fell from 678,000 in 1970 to fewer than 40,000 in 2018.

In her conclusion, Klobuchar says that to restrict and contain monopolistic behavior, there are really only two options: to regulate behavior and to enforce the antitrust laws.  Sadly, she fails to include the remedies offered in Lizzie Magie’s game: the public collection of economic rent and the taking of “natural monopolies” into the public domain.  If corporations collected less in the way of economic rent, they would have fewer resources with which to pursue their rampant takeover activity.  Also, in addition to putting natural monopolies under public ownership, public options could be offered in markets that are highly concentrated.   Though the senator from the great state of Minnesota wrote a good book, a complete exploration of monopoly remedies would have made it even better.

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