There are many competing interpretations for why Hillary Clinton lost last fall's election, but most observers do agree that one--economics--played a big role. Clinton simply didn't articulate a vision compelling enough to compete with Donald Trump's rousing, if dubious, message that bad trade deals and illegal immigration explain the downward mobility of so many Americans.
As it happens, Clinton did have the germ of exactly such an idea--if you knew where to look. In an October 2015 op-ed, she wrote that "large corporations are concentrating control over markets" and "using their power to raise prices, limit choices for consumers, lower wages for workers, and hold back competition from startups and small businesses. It's no wonder Americans feel the deck is stacked for those at the top." In a speech in Toledo this past October, Clinton assailed "old-fashioned monopolies" and vowed to appoint "tough" enforcers "so the big don't keep getting bigger and bigger."
Clinton's words were in keeping with Bernie Sanders's attacks on big banks, but went further, tracing how concentration is a problem throughout the economy. It was a message seemingly tailor-made for the wrathful electorate of 2016. Yet after the Ohio speech Clinton rarely touched again on the issue. Few other Democrats even mentioned the word monopoly.
The pity is that Clinton's stance wasn't simple campaign rhetoric. It was based on a substantial and growing body of research--much of it first presented in the pages of this magazine and since validated by the Obama administration's own economists--that confirms that consolidation is at the root of many of America's most pressing economic and political problems.
These include the declining fortunes of rural America as farmers struggle against Big Ag. It includes the fading of heartland cities like Memphis and Minneapolis as corporate giants in coastal cities buy out local banks and businesses. It includes plunging rates of entrepreneurship and innovation as concentrated markets choke off independent businesses and new startups. It includes falling real wages, as decades of merger mania have reduced the need for employers to compete to attract and retain workers.
Monopoly is a main driver of inequality, as super-fat profits concentrate more wealth in the hands of the few. The effects of monopoly enrage voters in their day-to-day lives, as they face the sky-high prices set by drug company cartels and the abuses of cable providers, health insurers, and airlines. Monopoly provides much of the funds the wealthy use to distort American politics.
For these and other reasons, the Clinton campaign, along with the White House and the Democratic Party, made a huge mistake by failing to flesh out their anti-monopoly message. Yet the full dimensions of the missed opportunity are greater yet. Properly understood, the anti-monopoly frame doesn't just offer a way to talk to Americans about their material needs; it's also a way to connect to deeply and broadly held American ideals, like the freedom to be one's own boss and the liberty to choose one's own course.
For most of the twentieth century these values were hallmarks of the Democratic Party. This tradition, which dates to the time of Thomas Jefferson, found expression in anti-monopoly policies designed to protect Americans not just as consumers, but also as citizens and producers, from domination by the powerful. Yet today most Americans associate terms like "freedom" and "liberty" with Republicans, even as that party appears to be preparing to deliver something more like autocracy.
This is a tragedy. Going forward, Democrats should make anti-monopoly--in the name of liberty, democracy, community, family, and innovation--the foundation of their economic thinking and the leading idea of their economic messaging. If they do, Democrats will be attacking what's actually wrong with America. They will also swiftly begin to split the Trump vote and to rebuild their own shattered party.
The idea that America has a monopoly problem is now beyond dispute. Since 2008 there have been more than $10 trillion in mergers, and the pace of deal making continues to accelerate, with 2015 setting a record for the most mergers in a year and October 2016 setting the record for the most mergers in a month.
In 2016, London's Economist magazine published three front-page stories on America's monopoly problem. The magazine reported that two-thirds of all corporate sectors have become more concentrated since the 1990s, that corporations are far more profitable now than at any time since the 1920s, and that an inordinate amount of profit goes to a very few immense investment funds, such as BlackRock and State Street. In April, the White House Council of Economic Advisers came to much the same conclusion, and called for a "robust reaction to market power abuses."
Ordinary Americans didn't need experts to explain the danger of monopoly. Populist movements like the Tea Party, Occupy, and the Sanders campaign have all focused to varying degrees on the threats posed by concentration. Polls show that a...