Analysis

Listen to Elizabeth Warren: Antitrust Action Is the Path to a Better Society

Reforming taxes, health care and education isn’t enough. Social change in the United States needs a curbing of the corporate giants' vast power

Workers walk past boxes at an Amazon center in Robbinsville, New Jersey, November 27, 2017.
Lucas Jackson / Reuters

Seconds after U.S. President Donald Trump finished his speech recognizing Jerusalem as Israel’s capital, people on the Israeli left began applauding his move on Twitter, practically competing to pour on the plaudits.

After all, after decades of rhetoric about Israel’s isolation and international pressure, Trump had taken away a narrative. Professional leftists’ cooing about Jerusalem, using rhetoric characteristic of the right, was mainly an attempt to gain relevancy as events went places nobody expected.

Embarrassingly, the liberal establishment in the West can’t seem to fire up voters, as was evident not only in Trump’s triumph in November 2016. There was also the stunning rise of Bernie Sanders and the disgust with Hillary Clinton and the plutocrats and kleptocrats who have been feeding her and her husband for 30 years.

Where is the Israeli left heading now? Will it continue to delight in condemnation of Israel by the United Nations and European Union while it waits for international pressure or a third intifada? So here’s a proposal for the mortified liberals and leftists whose cheese Trump moved in unexpected directions with his Jerusalem announcement. Instead of waiting for a third intifada, listen to what the Democrats’ unofficial leader, Sen. Elizabeth Warren, has to say.

It isn’t about Jerusalem, the peace process, left or right, Islam or Judaism. Warren has talked about who benefits from the new U.S. tax bill and has done something her party colleagues haven’t done for decades. She has talked about the true structure of power in American democracy, how corporate giants have power, and how mergers and acquisitions have left most major industries controlled by a handful of players.

Warren is probably the most hated politician on Wall Street and among America’s 0.01%. The country’s plutocrats would have been perfectly happy to have Hillary Clinton at the top – she shares their views and Warren does not. But they hate the senator from Massachusetts because she’s the only one taking aim at what they care about the most: their clout in the market, their political power, and the regulations that serve them.

Two-part plan

The part the plutocrats hate most about Warren’s statements is that she's not calling for the elimination of markets; she wants to strengthen them by boosting competition. She’s one of the few U.S. politicians to note that the number of markets open to competition in America is shrinking. In most places, at both the federal and state level, the game has been sold to the big boys with political power, who go on to squeeze the consumer, the taxpayer and the titans' own workers.

Warren’s plan is ambitious, yet simple. First she wants to restore aggressive antitrust enforcement, which the United States hasn’t been doing for 30 years. She wants every proposed merger to be meticulously examined. She wants not only to stop horizontal mergers between rivals, but vertical mergers (like AT&T’s plan to buy Time Warner, a merger Trump actually opposes, possibly for political reasons, and drugstore chain CVS’ proposed merger with health insurer Aetna).

America has had a case of merger fever for decades, despite academic studies showing that mergers hardly contribute to efficiency. Their main contribution is to the companies’ market clout at the expense of consumers and employees.

Yes, a company’s clout with regulators may be hard to quantify, but it’s hard to rule out that the bigger a company is, the more it could influence regulators. What would it take to change U.S. antitrust policy?

Regulators with spines of steel, Warren says. Indeed, they’re hard to find when regulators make a tenth or hundredth of the salaries paid to lobbyists, CEOs, lawyers and economists representing the giant companies. Obviously there are a surfeit of “experts” who can explain why bigger is better so mergers should be approved.

Amazon angst

In recent years, especially in recent months, efforts have been ramped up to ensure that mergers and acquisitions go through. Many of the merging companies say they need advantages of size, power and variety to contend with the internet giants that sprang up overnight. For instance, CVS’ urgency to buy Aetna may arise from it bracing for Amazon to get into drugs.

In the last three years, Amazon has turned into the biggest retailer in modern business history. Walmart, which was considered the most belligerent U.S. monopoly just five years ago, had to beg regulators to save it from Amazon. The name Amazon has appeared in 10 percent of the financial statements issued by American retailers in the past year. If you’re not afraid of Amazon, you evidently work in a niche that Jeff Bezos doesn’t care about.

Even if Amazon is just an excuse for CVS to buy Aetna, clearly we’re in a monopolistic arms race where mergers are the order of the day to preserve or increase market power against competitors, which are merging too.

AT&T will try to persuade U.S. justice officials to permit its union with Time Warner, then it will press the federal authorities to abolish net neutrality. It will argue that it has no choice but to merge, and that regulations need changing so it can cope with the internet behemoths: Amazon, Google, Facebook and Netflix.

Doesn’t Warren see that the latest wave of mergers is the necessary result of the incredibly rapid changes the internet is causing to business? She does, actually. That’s why the second step she advocates is to rethink antitrust policy regarding the internet giants Google, Facebook and Amazon.

Heads up, antitrust people. Warren’s message is that reforming taxes, health care and education isn’t enough. Social change in the United States needs greater competition, more-open markets and a curbing of the big companies’ vast political power.

American politicians on the left, but also on the right sometimes, knew this once upon a time. The message became dulled over the decades, and it’s time to bring it back in full force.