(*Editor’s note: This is another in a series of occasional commentaries on the history of monopoly power in the United States.)
by Justin Stofferahn
“Oh yes, they will lower the prices. They will have loss leaders. And once they have eliminated all signs of competition, they will set prices.
This is prophetic by New York State Senator Albert Lewis in April 1975 the state legislature was repealed its fair trade law, which gave producers the ability to set minimum selling prices for their products, protecting retailers from vast discount chains. OPEC oil embargo of 1973 caused a edged boost in pricesand fair trade regulations have become a target for policymakers looking to fight inflation.
At its peak, 45 states had passed fair trade laws, but in overdue 1975 Congress passed them prohibitive legislation their. In a sign of the changing situation in D.C., the bill met with little opposition – only from Minnesota Senator Hubert Humphrey she expressed disapproval.
For nearly three decades after World War II, aggressive efforts to rein in concentrated corporate power helped create a forceful middle class, expanded entrepreneurial opportunities, and even reduced racial income gaps despite Jim Crow and other racist economic barriers. But despite this, inflation and recession opened the door to a pro-monopoly intellectual revolution.
From One Roosevelt to Another: How We Dismantled Corporate Power and Built the Middle Class
In the 1960s and 1970s, University of Chicago professor Aaron, director influenced a up-to-date generation conservative thinkers. One of the most influential: Robert Bork, who in 1978, after serving as US Attorney General under President Richard Nixon, wrote:The Antitrust Paradox. He argued that antitrust enforcement should focus narrowly on economic efficiency and impact on consumers.
While conservatives have built this intellectual framework, large business was also launched and created up-to-date organizations such as the Business Round Table, which he adopted be aimed at antitrust protection and other regulations.
These movements on the right side melted with Ralph Nader’s leftist consumer movement and the up-to-date generation Watergate Democrats in Congress to form a bipartisan coalition seeking to remove certain regulations, believing it would lower costs for consumers. The result was the deregulation of the airline, rail, and transportation industries under President Jimmy Carter.
The election of Ronald Reagan in 1980 brought the ideas of the University of Chicago’s economics department to the White House, and in 1982 antitrust laws were gutted no voice. The Department of Justice implemented up-to-date merger guidelines inspired by Bork. He instructed regulators to focus on the merger’s potential impact on prices, relying largely on technical economic analysis that ignored other consequences of concentrated power. These up-to-date merger standards, lax enforcement the prohibition of price discrimination contained in the Robinson-Patman Act and a lithe touch on Wall Street, everyone helped break down the door several decades consolidation of enterprises.
We’ve fought for monopoly power before – we can do it again | Opinion
One way to contextualize these policy changes – which were accompanied by: judiciary promoting monopoly — is to consider the creation of a Walmart. What started as a five and dime store has grown from regional chain of 38 stores in 1970 into a retail giant controls 50%or more different local food markets today.
The death of fair trade gave Walmart the first opening that could have weakened local retailers. The suspension of enforcement of the Robinson-Patman Act gave the company the opportunity to exploit its growing size to cut preferential deals with suppliers, further undercutting diminutive retailers.
These providers, free to apply the up-to-date merger guidelines, began to consolidate to counter the growing power of Walmart. This in turn; they produced food giants that displaced family farmers and industrial titans that sent jobs abroad.
The 1990s cemented the dominance of corporate power. President Bill Clinton started acting on his own deregulatory programworking with Republicans in Congress to remove restrictions on consolidation in telecommunication and the financial industry. A up-to-date consensus was born in Washington that would continue through the Bush and Obama years. One of the few who saw what was happening was Minnesota State Senator Paul Wellstone.
Wellington voted against Clinton-era pro-trust laws and warned against consequences consolidation of enterprises. He even developed the so-called three-point plan for limiting monopoly power in America. In New York Times article in the absence of widespread political agitation against the rapidly consolidating economy, Wellstone was singled out as one of the few dissenting voices. Wellstone noted in his article that the pro-monopoly revolution was as much ideological as it was driven by corporate influence. Washington was in the grip of, he said, “a set of shared assumptions about what is now necessary to survive in the global economy.”
For decades, problems such as exploding inequality, stagnant wages, the collapse of major street businesses and the loss of our manufacturing base have been portrayed as the inevitable consequence of impersonal forces such as globalization and technology. Wellstone saw through it—like generations of Americans before him.
Now we have to learn these lessons again. Federal Trade Commission once again getting up to anti-competitive behavior; The Department of Justice is trying to do just that tighten merger guidelines; policymakers like Minnesota Sen. Amy Klobuchar supports antitrust reformsand just during the last legislative session in the Minnesota House he did the same.
Over the past forty years, monopolists have won a series of battles, but history shows that their ultimate victory is not inevitable.
Justin Stofferahn lives in White Bear Township and is a public affairs professional who has worked on a variety of tax and economic development issues. He wrote this article for the Minnesota Reformer, a sister site of the Pennsylvania Capital-Star, where he first appeared.
