Should We Break Up Facebook, Google and Amazon?

by Madeleine Kando


Tim Wu, author of ‘The Curse of Bigness: Antitrust in the New Gilded Age” calls our time the ‘new Gilded Age’ and warns that when you allow the private sector to acquire excessive power, the power of the people and their representative government is being undermined.

In his new book, Tim Wu - also known for his strong advocacy for Net Neutrality - makes a compelling argument for the necessity of breaking up the Tech Giants. He sees no difference between Big Tech and the industrial giants of the Gilded Age. Monopolists like the Rockefellers (oil), the Carnegies (steel) and J.P. Morgans (railroad), saw themselves as pioneers in a progressive movement. They believed in social Darwinism, the survival of the fittest and were quite comfortable with the notion that smaller companies deserved to die. The US did lead the world in industry and innovation but laissez-faire government policies created a huge gap between the wealthy and the workers, not unlike today.

We have fallen prey to the charms of tech giants like Facebook and Google, who play down the allure of profit-making while talking a lot about how much value and “connection” they bring to the public. They portray themselves as striving to build a better future, but are in fact, the Robber Barons of today.

Busting up big businesses into smaller parts was once an American tradition, proof that we value competition in our economic system. In the trust-busting days of Teddy Roosevelt, antitrust laws functioned as a check on private power, a safeguard against a widening income gap and of corporations subverting electoral politics.
The hero in Wu’s book is Louis Brandeis, a Justice on the Supreme Court, who championed labor rights and other decisions that earned him a reputation as the Robin Hood of law. He worried about the tendency of giant corporations to exterminate the competition in their march toward domination. Brandeis believed that the economy, and the businesses that are part of it, needed to operate on a human scale, a scale that benefits the average worker, not the corporation. “What Brandeis really cared about was the economic conditions under which life is lived,” Wu writes, “and the effects of the economy on one’s character and on the nation’s soul.”

He asked mundane questions, such as: ‘What does the economy do for the average person, his career? Does it give him steady work and vacation time, or does it make him work like a slave?’ The deeper question he posed was: ‘What kind of Republic do we want? The ‘right to life’ guaranteed by our Constitution should be understood as ‘the right to live, and not merely to exist’.

Brandeis meant that, as a nation, we should limit the dangers of both government oppression AND freedom from industrial exploitation, which creates so much economic insecurity that one constantly fears unemployment or poverty. In other words, when things get too BIG, he said, the essence of what our Republic stands for, the true will of the people, is lost. ‘We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both.’

But Antitrust enforcement has steadily declined, to the point that the George W. Bush’s administration did not bring a single antitrust action in eight years. The results, a widening income gap and corporations subverting electoral politics.

 

Wu is not only concerned about the inequality that unlimited private power generates, but says that ‘Nations that fail to control private power and do not attend to the needs of their citizens, will see the rise of strongmen. Restoring the power of anti-trust laws is necessary in a functioning democracy.’ In Germany, it was the giants of industry that made it possible for a strongman like Hitler to come to power.

While Brandeis is the hero of his book, the villain goes by the name of Robert Bork. Bork, a very conservative judge, transformed the notion of ‘Antitrust’ to mean that it would protect consumers from higher prices. As long as a business like Amazon delivers lower prices on doodads for your home and diapers for your kids, it isn’t supposed to pose a monopoly threat, even as it gobbles up its competitors.

But it is in the nature of giant corporations, to seek to protect their advantage, to try to turn their outsize economic power into political power. So to break their grip on American democracy, the government needs to break them up in turn.

The question we should ask is: Who rules this country? the Government that supposedly represents the will of the people or the giant corporations that only think of the bottom line?

Bork's narrowed concept of antitrust law misses the point. Facebook’s privacy issues didn’t even make a dent in their membership. How could it? We have nowhere else to do go. There is a growing sense that things are out of control. A sense of powerlessness, that economic forces are bigger than you and I. We could all become socialists and throw Capitalism in the trash can but a much less destructive solution would be to break up these giants. We did it in the past and new, healthier, smaller entities took their place. The break-up of AT&T spawned the creation of the Baby Bells. (The fact that we now again, have 2 giants - Verizon and AT&T attests to the fact that our laws aren’t working).

There is a lot of talk these days about government overreach, about big government, draining the swamp, etc. But the real danger lies in the private sector. Antitrust laws are essential in a functioning democracy, to prevent power from accumulating in the hands of the few. Those who cannot (or won’t) remember the past are doomed to repeat it. leave comment here