Jim Wright, later Speaker of the House, eulogized Patman’s life. “He often comforted the afflicted and afflicted the comfortable,” talking of Patman’s fights against big business, banks, and the Klan. “Well done.” — 5: 55-57
The bailouts from 2008 to 2010 were not intended to stop a depression, they were intended to stop a New Deal. And so they did. — 11: 141-142
He contrasted American politics, where men were free to vote, and American commerce, where they were under the thumb of petty tyrants. These two systems were in conflict, a contrast “between our political liberty and industrial absolutism.” — 43: 606-608
Hoover seemed to be the best of America. Not a politician, but a successful businessman, a progressive forward-looking leader. He was the Great Engineer, the Great Humanitarian, the Great Idealist, the Great Administrator. And now he was president, with seemingly limitless potential. And yet behind the image, Hoover was deeply conservative, skeptical of federal action, paralyzed by his own brilliance, and a mean-spirited micromanager. It would be hard to find a worse leader for a crisis. — 89: 1265-1268
could redeem their bonus, immediately, just like — 108: 1533-1533
American intellectuals and businessmen began embracing increasingly autocratic ideas. A movement called “technocracy” became a fad; technocrats sought to replace elected politicians with engineers and scientists who could plan without the need to respond to voters. Liberty magazine published an essay, “Does America Need a Dictator?” written by Wilson advisor Colonel Edward House. Unless economic circumstances improved, House wrote, “we are almost certain to have trouble.” — 139: 1978-1982
“History proves that dictatorships do not grow out of strong and successful governments, but out of weak and helpless ones.” —Franklin Delano Roosevelt, 19381 — 171: 2428-2429
“The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism—ownership of government by an individual, by a group, or by any other controlling private power.” — 179: 2554-2556
In 1938, renowned British economist John Maynard Keynes wrote a private letter to Roosevelt about how to handle business leaders, saying, “You could do anything you liked with them if you would treat them (even the big ones), not as wolves or tigers, but as domestic animals by nature, even though they have been badly brought up and not trained as you would wish.”39 Roosevelt would seek to domesticate big business. — 183: 2614-2617
After the Dr. Miles decision, chains could specifically pick well-known branded goods to discount at a loss to drive competitors out of business, and then use their purchasing volume to demand lower prices, and thus lower quality, from the maker. The court had removed power from the small producer, and placed power in the hands of the financial middlemen who controlled the chain stores. — 226: 3225-3227
Legislators sought to distinguish between the accomplishments of A&P in terms of building a better food distribution system, and the brute use of coercion to run rivals out of business. — 231: 3295-3297
Years later, after IBM led the industry, Thomas Watson Jr. saw Morison at a Roper Conference. His father had died, and he was now head of IBM. “I’ve never forgotten what you told my father,” he said. “I know you did it gently, and he, of course, was emotionally upset, but you are absolutely right. And as his son, I couldn’t say it, but we were going to be passed by and just the pressure of this decree, because he dominated the company, was the only thing that saved us.” — 266: 3792-3795
“Liberalism” had been a word Roosevelt used to organize his political movement. In 1932, a reporter asked Roosevelt to describe his political philosophy. Roosevelt called himself “a liberal.” This did not mean, as classical liberalism had meant in much of the previous era, protecting the rights of industrial barons using the rhetoric of self-sufficiency. It meant moral leadership, the willingness to address a civilizational crisis by updating the machinery of governance. A liberal, Roosevelt said, broke from the past, but not too quickly to provoke violence.23 After the war, Berle would again redefine the term “liberal,” slowly changing it to mean a form of soft corporatism. He did this by using the Red Scare to centralize power over postwar policy development into a small network of planners and Ivy League intellectuals, what conservatives derisively called “eggheads.” Over the next twenty-five years, liberalism would come to mean a gentle form of elitism. And since Roosevelt had called himself a liberal, this became what Democratics increasingly believed the New Deal had been. — 276: 3942-3951
In time, Hofstadter’s work would help to all but erase the American historical tradition—tracing to the Revolution itself—that held that the great ideological conflict was between democracy and monopoly. “Americans may not have quarreled over profound ideological matters,” he wrote early in his career, “as these are formulated in the history of political thought, but they quarreled consistently enough over issues that had real pith and moment.” Pith and moment was a beautiful phrase, but what Hofstadter meant was that there were no conflicts in America in political economy, only social anxiety. It was too scary for Hofstadter to concede that democratic movements were anything but a rabid mob.57 — 287: 4091-4096
In 1958, a new concept replaced industrial liberty: affluence. That year, John Kenneth Galbraith, already one of the most famous economists in America, published the best-selling book The Affluent Society, plucking the word “affluence” from the realm of the esoteric and turning it into a household phrase. For millions of Americans, Galbraith helped explain the exceptional increases in wealth they had experienced since the dark days of the depression. He explained it not as a triumph of policy, but as an inevitability of the munificent monopolies around them. — 287: 4099-4104
With consensus history, Hofstadter had taken a bastardized clinical frame to airbrush the ideological importance of mass movements out of American history. He diagnosed groups as disparate as abolitionists, nativists, Greenbackers and populists, the popular left-wing press during World War I, white supremacists, and black Muslims as essentially suffering from mental disorders.89 And in an era increasingly characterized by the politics of affluence, Hofstadter and his ilk framed those with ideological goals outside that of consensus historians as mentally ill cranks. — 299: 4262-4266
But now, a new language existed to shape liberalism. Whether through Hofstadter’s consensus history or Galbraith’s resurrection of Bull Moose–style technocratic governance, politics was no longer an avenue for structuring society but rather more a means of ratifying what technologically driven organizations already saw as an optimal governing arrangement. — 302: 4313-4315
But Brandeis and Patman understood that political economy was about power structures. While Brandeis believed in science, he did not believe in overly applying technocratic tools to political decisions. Corporations and markets were engineered, and they could be structured to promote a free and self-governing people capable of making intelligent decisions about politics. But they could also become mechanisms of oppression. The forum for such discussions was that of law and politics, where human beings could use their liberties and free will to come together and make such decisions. — 321: 4575-4579
Director and his colleagues had a fundamentally nihilistic view of human nature, and introduced into political economics a language flowing from this conception. All humans sought to maximize their individual well-being. Legal systems should be modeled not on squishy notions such as justice, fairness, equity, or social stability, but on scientific measurements of individual welfare. In this brutal framework, those who succeeded were simply the most talented (a foreshadowing of the later fetishizing of meritocracy). Perhaps this reality might be sad, perhaps it might be unfair, but it was truth, and thus, scientific. — 324: 4623-4628
McLean was an innovative manager, and later introduced important innovations in shipping containers, but the Waterman deal was the beginnings of the reconversion of the corporation, from a legal institution chartered to build a product or run a service for profit, to a financial asset meant solely to generate cash for its investors. McClean had bought a corporation by borrowing against that corporation’s own assets. — 352: 5014-5017
These conglomerates were shaped by strict antitrust laws. There were strict restrictions on market shares in any one market, and strict limits on acquiring suppliers or customers in the same industrial supply chain. So one response by financiers was to buy totally unrelated lines of business so as to avoid scrutiny by antitrust agencies. The main point of the mergers was not to monopolize, but to create deal flow and profits for bankers, and to justify higher salaries and bonuses for executives, who now in theory had bigger portfolios of responsibilities. — 375: 5344-5348
His endlessly loyal staff of banking radicals was used to being worked to the ground by Patman, who got to work by 6 a.m. And he still had that secret weapon that few in Congress or in business could tolerate: Patman was not afraid to lose. — 381: 5431-5433
Milton Shapp, a Pennsylvania entrepreneur running for governor, told members of the Banking Committee about pressure put on him by banks to buy alternative services when he needed financing. An Indianapolis travel agent, Othmar Grueninger, talked about how bank-owned travel agencies were driving independent agencies out of business because of their unparalleled access to data about who traveled and who was creditworthy. “Any time I deposited checks from my customers,” he said, “I was providing the banks with the names of my best clients.” — 390: 5565-5569
Concentration: The New Learning.36 The Chicago Schoolers didn’t win the substantive argument against antimonopolist economists. Despite the language of science, little of what the Chicago School economists put forward was ever rooted in empirical proof. But they gained a marketing coup in the use of the term “The New Learning,” which persuaded much of the political world that there was no longer a consensus, or need, for strong antitrust enforcement. — 433: 6170-6174
Nader was close with Brandeis disciple Patman, working with Patman to oppose bailouts and supporting and advocating for the breakup of large firms such as General Motors.44 But unlike Brandeis, who had represented small firms and had experience in business, Nader’s career was not rooted in promoting fair commerce and protecting the citizen producer. Brandeis believed citizens needed control of production and commerce, so they could have the autonomy necessary to be citizens and protect their communities. Nader did not particularly care who had control of commerce as long as the consumer was protected.45 “People first had to get it that corporations were rapacious and government corrupt,” he said in 1975. The goal was to “replace corporations, break them up,” so they could be “owned by workers or better yet consumers.” In truth, Nader had not thought carefully about who would control commerce.46 — 438: 6250-6258
Hart- and Patman-style populists focused foremost on political economic structures; they saw corporate power, Wall Street, and financial corruption as foundational problems leading to not only inflation and high interest rates but an antidemocratic concentration of power. The newer generation diagnosed the crisis as generational, cultural, a lack of youthful vigor within American institutions. — 442: 6305-6308
The upstarts viewed Penn Central as a symbol of a generalized stagnation, a moral curse, rather than a practical problem that could be addressed by reducing the size of business and constraining concentrations of power. “We’ve grown fat and sloppy,” Peters argued. “General Motors and the Post Office each have over 700,000 employees. One turns out lemons. The other loses packages.… The old organizations—public or private—simply aren’t doing the job.” In the 1970s, his writers were trying to find something new, something different, something interesting to address the congealed and increasingly ossified society. But oriented by the politics of affluence rather than the memory of Mellon, they ignored antimonopolist elders and did not fully understand the danger of concentrated financial power. — 442: 6310-6315
“I suggest that a philosopher of many years ago pointed out this phenomenon, and said that there is something about the intellectual mind that induces it to focus on the obscure at the expense of the obvious. And this is why I am glad that no one has ever accused me of being intellectual.” —Thomas Rothwell, small business lobbyist, 1975 — 466: 6639-6642
The overthrow of fair trade, which had been won with so much struggle fifty years earlier, was the culmination of a consistent push by Wall Street and the left to remove the citizen from having control over production. — 469: 6688-6690
Big business representatives had been attacking fair trade laws and the Robinson-Patman Act since the laws were passed. The laws aimed at two different price harms. The first was predation, where a corporation like Standard Oil or A&P could use discounting to drive competitors out of business. The second was price discrimination, where a railroad or corporation could charge different prices to favor bigger companies that did their bidding. Both predation and price discrimination helped companies with access to capital, which meant that these tactics placed control over commerce in the hands of the money trust of Wall Street. The antimonopoly laws were designed to block both harms, and thus, restrict Wall Street. But predatory practices and price discrimination can lower prices for consumers, at least on a temporary basis. — 470: 6701-6707
The concept of “deregulation” was naturally incoherent—there is no such thing as a market without regulation; the question had always been whether public institutions or financiers organize market rules. — 481: 6863-6865
by the end of the 1980s, Wall Street had permanently changed corporate America. A new type of business model existed. The leveraged buyout industry, stung with bad publicity, rebranded as “private equity.” While some PE firms made productive investments, they were largely pools of floating capital that sought to use the corporation for the purpose of the financier.50 Strategically, the only businesses that were sustainable in the new legal environment were those that could withstand the pressures of financial raiders. Large-scale monopolistic corporations such as General Electric and Walmart could use the new tools to their advantage. So could high-tech concerns such as Microsoft that had taken advantage of the technology revolution to acquire choke holds over new vital arteries of commerce. Private equity firms and financial intermediaries who could use the new capital market structure to their advantage increasingly controlled American business. In previous eras in American history, the wreckage caused by such widespread looting would have led to substantial legal reforms. And there were some. But the key innovation, that the corporate structure exists as a mechanism for the extraction of cash for insiders from either the company itself or from a market that company monopolized, was here to stay. — 539: 7691-7701
“A nation’s greatness can be measured by the happiness and prosperity of the people who produce the nation’s wealth.” —Wright Patman — 581: 8289-8291
The Watergate Babies rejected the lessons of Patman’s generation for many reasons, conflating economic populism with an antiquated vision of the economy. But there was wisdom in Patman’s lessons. In the 1930s, he said that restricting chain stores would prevent “Hitler’s methods of government and business in Europe” from coming to the United States. For decades after World War II, preventing economic concentration was understood as a bulwark against tyranny. From the 1970s until the financial crisis, this rhetoric seemed ridiculous. No longer. Financial crises occur regularly now, and prices for essential goods and services reflect monopoly power rather than free citizens buying and selling to each other. People worldwide, sullen and unmoored from community structures, are turning to rage, apathy, protest, and angry tribalism. The reason for this dissatisfaction, the anxiety, is clear. The institutions that touch our lives are unreachable. We organize our social networks through Facebook, our information through Google, our health care from complex bureaucracies, our seeds and chemicals through seed monopolists. We sell our grain through Cargill and watch movies, buy groceries, books, and clothing through Amazon. Open markets are gone, replaced by a handful of corporate giants. We are increasingly addicted to opioids, sugary processed foods, and alcohol. We have no faith in what was once the most democratically responsive part of government, Congress. We cannot begin to address perhaps the most important existential challenge humanity has ever faced, climate change. Steeped in centralized power and mistrust, people all over the world face demagogues selling blame and hatred. But even more profound than the anxiety is the confusion. Our policymakers, until recently, saw giants like Google, Amazon, and Goldman Sachs as exemplars of the American spirit, instead of the dangerous re-creation of trading corporations seeking to control and enslave us—like the East India Company—against which we rebelled. They confused charity for justice, meekly asking our munificent plutocrats to raise our wages or donate their ill-gotten gains to charitable foundations plastered with their names. We have asked for new laws to offer welfare to the poor, instead of seeing poverty itself as a lack of freedom, as a denial of the basic rights of citizenship. This is not democracy. This is servitude. — 591: 8445-8462
It isn’t just that we have to contend with plutocrats. It’s that we have divorced property ownership from caretaking itself. — 596: 8522-8523
Fighting back also means not falling into the trap of elitism. The weakness of the technocrat is “imposter syndrome,” a feeling that he or she doesn’t belong in a position of power, that his or her expertise is a pretense. This insecurity is what Aaron Director identified as his key to power. “Beautiful smugness” is how John Kenneth Galbraith and Richard Hofstadter persuaded a generation to give up their liberties. These men, Director in particular, understood that powerful liberal lawyers, well-respected and arrogant, were susceptible to mockery by their colleagues. Director made fun of lawyers who subscribed to common sense, creating a social context where an embrace of complex-seeming models by credentialed experts who were working for oligarchs overrode respect for justice, democracy, or basic human decency. In doing this, Director reoriented the elitist liberal brain, rewiring it for plutocracy without liberals even knowing. The only immunization against this is a democratic form of populism. I do not mean the toxic fake version of populism, demagogues and frauds blaming ethnic groups. I mean old-school populism, the belief that citizens, educated and responsible, know what is best for themselves. And united they come together in a system of democracy and use the law to protect and develop themselves. This populism does not disdain expertise, but embraces it. But expertise must serve the people; it must not be oriented to confuse them, to erect a new aristocracy. And that means you must never be afraid to say “I don’t know,” and you must do your best to remember that men in suits with impressive credentials can and often do lie, cheat, and steal. It’s true that humanity has a remarkable amount of accumulated knowledge, but as individuals, we’re all making it up as we go along. To do the work of being a citizen, each of us has to work hard, learn, build up a working body of knowledge. — 597: 8537-8550
Nothing about monopolization is inevitable. Our increasingly dystopian and corrupt corporate apparatus was brought to us by people selling a fantasy of inevitability. Some of them sold us a right-wing fantasy of corporate monopolies and bigness as a sign of progress. Some of them sold us a left-wing fantasy of corporate monopolies as an unstoppable feature of capitalism. But these fantasies are, in the end, the same. They both are designed to sell you on the idea that you have no power, that you are nothing but a consumer. And that is not true. It has never been true. — 599: 8554-8558