Democracy v. Plutocracy: Breaking Up is Hard to Do
From local communities and states to federal policy, antitrust movements to dismantle monopolies are challenging the system that can be summed up as: Make Feudalism Great Again. Although breaking up is hard to do, we’ve broken up monopolies before.
In this second of our two-part program, we join Thom Hartmann, Stacy Mitchell and Maurice BP-Weeks to survey the landscape of rising antitrust movements to break the stranglehold of corporate power and level the playing field for a democratized economy.
- Thom Hartmann, the top progressive talk show host in America for over a decade, a four-time Project Censored Award-winning journalist, and bestselling author. Learn more at his website.
- Stacy Mitchell, Co-Director of the Institute for Local Self-Reliance, which produces research and develops policy to counter corporate control and build thriving, equitable communities.
- Maurice BP-Weeks, Co-Executive Director of ACRE (Action Center on Race and the Economy) where he works on campaigns to create equitable communities by dismantling systems of wealth extraction in Black and Brown communities.
- Executive Producer: Kenny Ausubel
- Written by: Kenny Ausubel
- Senior Producer and Station Relations: Stephanie Welch
- Host and Consulting Producer: Neil Harvey
- Producer: Teo Grossman
- Program Engineer and Music Supervisor: Emily Harris
The Hidden History of Monopolies by Thom Hartmann
Fighting Monopoly Power | Institute for Local Self-Reliance
All Life Is Organized Around Democracy | Thom Hartmann’s keynote address to the Bioneers 2020 Conference
Democracy vs. Plutocracy panel discussion (video) | Bioneers 2020 Conference
Our Economic Future | Bioneers Reader eBook
This is an episode of the Bioneers: Revolution from the Heart of Nature series. Visit the radio and podcast homepage to find out how to hear the program on your local station and how to subscribe to the podcast.
Subscribe to the Bioneers: Revolution from The Heart of Nature podcast
NEIL HARVEY, HOST: According to Jeffrey Winters, the author of Oligarchy, wealth in the U.S. today is over “two times as concentrated as imperial Rome, which was a slave-and-farmer society.”
If billionaires were a nation, they’d be the world’s 3rd largest economy.
As Fortune magazine CEO Alan Murray has observed: “More and more CEOs worry that public support for the system in which they’ve operated is in danger of disappearing.”
Indeed, from local communities and states to federal policy, antitrust movements to dismantle monopolies are challenging the system that can be summed up as: Make Feudalism Great Again.
MAURICE BP-WEEKS: Amazon hosted this kind of game show like search for the best city to build their second headquarters in, and the way that the contest worked is basically whoever could give them the most tax giveaways or benefit was going to be the city that it chose.
HOST: Maurice BP-Weeks worked on one of the most explosive and high-profile campaigns to resist and challenge Amazon. He’s co-director of the Action Center for Race and Economy where he works with community organizations and labor unions to create equitable communities, and dismantle a monopolist system he calls, racial capitalism.
The campaign erupted in the borough of Queens in New York City, which is among the most diverse and low-income in the nation.
Maurice spoke online at a Bioneers conference.
MBP-W: So, you know, from leaked documents and some public documents, we know that cities were offering all sorts of things, you know, no income tax by Amazon employees for 35 years, no property taxes paid at all, we’ll build a rail line for you, all sorts of things that cities were offering.
And when Queens was chosen, you know, I think the residents there realized a couple of things. One, this isn’t really a good business partner to have in your neighborhood. So there’s lots of diverse businesses in Queens that have been there for lots of years, and one thing we know that happens when Amazon comes into a particular place is they suck away both the labor market and just drive down the quality of the actual area while not paying any taxes into that area in order to upkeep other things.
That along with, you know, the company having no response to things like them having contracts with ICE or other policing entities. The areas that they were looking at going into were filled with immigrants – either first- or second-generation immigrants – to have a neighbor coming in, this huge corporation, that is so aggressive towards immigrants with their contracts with ICE just wasn’t something that was possible.
And frankly, New York City is, along with lots of other states in this moment, you know, there are lots of financial needs there in schools and roads and parks. And there’s a lot of financial need. I think communities correctly agreed that it just doesn’t make sense to give giveaways to one of the wealthiest corporations on Earth run by the richest man on Earth when we could instead fund our schools more, fund our train system more, etc.
So, that’s a little of why the Queens pushback happened. That was a higher profile. And I will say that both Amazon and Google, and other companies, really do this all of the time.
HOST: For Stacy Mitchell, the Queens rebellion was déjà vu all over again. As co-director of the Institute for Local Self-Reliance, she had been battling the same players in the same matrix ensnaring local communities nationwide.
She’s produced many influential reports and articles, and testified before Congress. And she’s been seminal in some of the antitrust actions dogging Amazon.
STACY MITCHELL: There is this growing focus on structure, economic structure and on policy, and we’ve been living for a number of decades here imagining that big companies have been taking over and growing in size and power simply because they were better at what they did, right, they were more efficient. Like every time you walked past the corner drugstore that had closed its doors or another workplace that had gone out of business, or another small town somewhere that was struggling, you just sort of assumed that this was like the price of progress, the natural evolution of companies taking over that were just better at what they did.
And what’s really true and what a lot of our research and other research shows is that in fact what has happened is that we’ve written a set of policies that have favored these companies extraordinarily. And as they’ve grown, they’ve been able to manipulate government further and further and further to their own advantage. I mean, Amazon has picked up over $4 billion in local and state subsidies. You know, governments across the country writing Amazon checks.
If you’re a local hardware store and you want to open a second location, like good luck getting a dime from your city council. You’ll be laughed out and told that this is a free market and you have to compete. Right? I mean, while your biggest competitor is getting these huge subsidies.
And that’s not all. Amazon didn’t collect sales tax in most places for over 20 years, and incredible advantage. And we see that even today in the midst of the COVID crisis, you know, not actually stepping up and providing protection for the employees that are in their warehouses the way that they’re really legally obligated to do, and certainly ethically obligated to do. And our anti-monopoly laws, the fact that we really shelved our antitrust laws 40 years ago, has been a whole set of tools that, again, has fueled the exercise of power.
So the pushback in Queens that Maurice talked about and that we’re really seeing at the grassroots level across the country is this growing focus on, you know, it’s not just about calling these companies out for their bad behavior and trying to get them to do better, it’s about recognizing that this is our government and we own these rules, and we need to change these laws, and we need to think about, well, what does an economic structure look like that actually serves the democracy and that actually serves the needs of people.
HOST: So how did we get here?
Beginning in the 1960’s and ‘70s, the lawyer and later failed Supreme Court nominee Robert Bork launched a full-frontal attack against anti-trust law. He shifted the focus from fair competition to a matter of efficiency and price points. If customers were getting a cheaper price, then monopoly was just fine.
He marketed the phrase “consumer welfare” so successfully that in 1971 the famous Powell Memo by the Supreme Court Justice Lewis Powell redefined the metric for judging monopoly down to price points.
Bork teamed up with Milton Friedman of the rising Chicago School of Economics and Neoliberalism. They asserted that corporations were accountable only to shareholders – not to employees, communities, or the environment.
This radical shift was contrary to the original intent of antitrust law, which was to protect small businesses, fair competition, and democracy itself against the concentration of great wealth and power.
Beginning in the 1980s, the Reagan administration started systematically dissembling antitrust law and dialing down enforcement. That trend has continued full-tilt-boogie ever since, landing us in today’s world of giants and dwarves.
So, how’d that work out? Pretty much the way you’d expect, says progressive radio talk show host and author Thom Hartmann…
THOM HARTMANN: I think the most important thing though is educating people. I don’t think most Americans realize that the average American family pays a $5,000 a year monopoly tax. Americans pay twice as much for cable television as any other developed country in the world. We pay two to three times as much for cell phone service. We pay more than twice as much for WiFi. We pay more for airfare. We pay two to ten times more for pharmaceuticals. I mean, the list just goes on and on. We’re spending a lot more for a lot of things than any other developed country in the world, anyway. Duh, it’s because they enforce their anti-monopoly laws and we don’t. So I think this step one is waking people up, educating people.
HOST: Data show that monopolies smother the economy. They drive down wages, raise prices, throttle small and independent businesses, damage local communities and economies, and stifle innovation and competition.
The predicament is that they’re now so embedded in the economy that they compose a kind of private infrastructure that people depend on. But there’s another way to approach this dilemma, says Maurice BP-Weeks.
MBP-W: I live in a neighborhood where most of my neighbors are elderly and at high risk for contracting the Coronavirus in a way that would be a real health complication for them, and they’ve been ordering a lot on Amazon, a lot of stuff, everything from kind of regular groceries to paper towels, to things to keep them busy in the house, etc. and they love it too. That’s the other thing, you know, everyone gets excited when they’re getting an Amazon package, they love the company. But the fact that there’s an infrastructure that exists so that we could get things that people need to them quickly at a time where they can’t get them themselves, that’s actually great. And they built it using really, really shady and not so great strategies, but now it is there, and we can actually take it; we can use it; we can do a lot of the things that they’re doing.
Whether it can be operated in the way that it currently is, at the size that it is, is a real question to which personally I think the answer is no. We have to break it up and we have to have some sort of more democratic control over it.
You know, of course, controlling for– we don’t want to pay the workers crappy wages. We want it to be safe. We don’t want it to be harming the environment, etc. But I think there are things there that prove that this is a piece of infrastructure that we can use.
SM: It’s not online commerce or, you know, the Cloud or any of the other industries that Amazon controls, it’s the fact that those things are controlled by this single unaccountable player that operates essentially above any kind of law. That’s the problem that we have to address, not the technology, not how much we enjoy online commerce and its convenience. That’s all great.
HOST: Stacy Mitchell’s work on decentralizing and democratizing the economy led her to testify before Congress. For the first time in decades The House of Representatives began looking at resuscitating antitrust law. A year-long investigation of Big Tech resulted in a scathing report in 2020.
SM: And they found that these companies – Amazon, Google, Facebook and Apple – are in fact monopolies, that they have monopoly power, that they exercise that power in ways that harms people and harms independent businesses and communities, and then they laid out a set of recommendations. And essentially with regard to Amazon, what they’ve called for is exactly how we handled the railroads.
So in 1906 we passed a law that said, look, if you’re a railroad, that’s fine; you can’t also own other companies. Like you have to be a neutral carrier, a common carrier. You can’t have a financial interest in commodities because then you’re going to favor your own commodities over those who need the railroad.
And that’s what we should do with Amazon. We should say, look, you as an online platform needs to be separate from Amazon as a retailer. AWS needs to be spun off. And their logistics infrastructure—they’ve now built a logistics operation, a shipping operation that rivals UPS and even the Postal Service in scale, but they also need to be spun off as an independent company. And then Amazon, when its functioning as critical infrastructure needs to be subject to a set of public oversight laws.
HOST: But needless to say, breaking up is hard to do. Like the railroads before them, Big Tech funds the best government money can buy, including Congress.
Stacy Mitchell says much of the real action has already been happening at the local and regional levels. The Institute for Local Self-Reliance published a guide called “Fighting Monopoly Power” that details actions states and communities can take.
SM: It goes through a whole range of tools that people have at the state and local level, some of those that I just named, but also things like starting a public bank, which your city can do and can be a great way to untangle our financial system from Wall Street and begin to build locally controlled banking systems that work with community banks and local credit unions to actually channel our capital where it needs to go, to create the kinds of businesses and jobs and economic development that we need.
We can, you know, enact rules that eliminate subsidies. There are just tons of powers at the state and local level. And we see that in the hundreds and hundreds of municipalities that have built their own publicly owned broadband networks and told Time Warner and the other—Charter and the other giants to go away; we’re going to have better Internet at lower cost.
We’ve seen it in places like Oklahoma and other states that have passed referendums blocking corporate ownership of farmland and taking action against some of the big ag monopolies. We see it in places like North Dakota where they’ve said that you can’t operate a pharmacy in the state unless you’re a pharmacist. So every pharmacy in North Dakota is a locally owned, independent business. And we see this in all kinds of ways across the country, that people have used local government to try to push back against corporate power and to actually build systems locally that they control. I think when we start to look at the economy through that lens, we can see all the ways that we can begin to shift things.
MBP-W: There are local tools that we’re used to using that we can use on Amazon that, you know, we just have to sort of build a little bit of spine to do. So ensuring workplace safety in a particular municipality can pass a law that just does that in the way that you want.
You can still continue to do your local organizing, but connecting with folks who are doing that same type of organizing all around the country is really, really key so that we’re sort of connected in a way that starts to make us a more formidable force against this huge company.
HOST: Maurice BP-Weeks and Stacy Mitchell are part of a coalition called Athena, which is taking on Amazon. Along with advocates, policy experts, and academics, Athena is a group of forty-plus organizations whose communities and livelihoods are negatively impacted by Amazon. Athena’s stated aim is “to break up the power of Amazon and other mammoth corporations and recreate a world where all people, our environment, and our economy are healthy and sustainable; where everyone is safe, respected, and able to thrive.”
When we return, we look from the local to the global as anti-trust movements start to upend the Monopoly board.
HOST: Although breaking up is hard to do, we’ve broken up monopolies before. When the Nixon and Carter administrations used antitrust laws to break up the AT&T telephone monopoly, it vaporized the corporate propaganda campaign that it would harm shareholders and 401(k)’s. Instead, one share of stock became 7 or 8 shares. Shareholder value increased.
But today’s Big Tech companies have taken monopoly to a dizzying new level. Harvard Professor Shoshana Zuboff calls it “surveillance capitalism,” the title of her influential book. Thom Hartmann, Maurice BP-Weeks and Stacy Mitchell say that these days, Big Brother is not only watching you…
TH: Amazon is in the perfect position to know what people are buying. They’re selling stuff from small businesses, which is their sales pitch. Right? We’ve got, you know, half of our business is small businesses flowing through us. But what they’re doing is they’re very carefully looking at which one of these small businesses are actually doing pretty good so we can just screw them, wipe them out, and find some manufacturer to make the generic version of what they’re selling, and, you know, put them in the ground.
SM: Amazon sells its own goods as like a retailer, where it’s buying goods from other suppliers, selling them on its website. It also manufactures its own private label goods, so there are thousands of items that are Amazon-branded goods…
HOST: Stacy Mitchell…
SM: And it hosts on its platform all of these third party sellers, and those third party sellers are, you know, independent retailers, they’re major brands, you know, big companies that you would know, small companies, there are bunch of them overseas, you know, all kinds of different sorts of businesses, and, you know, what that enables—
If you want to sell online right now, because Amazon is getting so many people right out of the gate, so many eyeballs right out of the gate, your choice is either you can hang your shingle out on a world wide web on your own, have your own site, but it’s like, you know—you’re like on a dirt road that few people are actually traveling by and never finding you. Or you can become a seller on Amazon.
And if you become a seller on Amazon, you are giving to your most ferocious competitor everything of value that you have. You’re giving them the relationships with your customers, you’re giving them your knowledge of the particular products that you sell. And because they own all that infrastructure not only for ecommerce but also we can talk about Amazon web services and increasingly Alexa, their sort of voice-operating system. All of those pieces of infrastructure give them this god-like view of everything that is happening across the economy.
And from that vantage point, they can pick off hot-selling products that some business has found and start selling it themselves and demote that business in the search result, or they can simply use their gatekeeper power to raise fees. And so, you know, what we’ve found is that the businesses that are selling on Amazon site are increasingly having to pay a bigger and bigger cut of their sales. Today, about one out of every three dollars in sales that a business makes on Amazon site, they have to pay to Amazon. That’s up from 19% just a few years ago.
So this is a company that governs our markets, that effectively levies a tax on our trade, and if you have a problem with it, you know, the judge and jury again is Amazon. So again, it’s back to this issue of control and power.
HOST: Along with corporate capture of government, law and regulation, equally important is capturing people’s minds. Although Thom Hartmann says educating the public is a critical piece of the solution, what do you do when mass media and the internet are also monopolized and manipulated by giant corporations?
TH: So we have, you know, a handful of corporations now that control the public dialogue. And then sitting atop that, or perhaps under that like the roots of a tree, kind of a substrate or subsurface of that, you’ve got Facebook, which has, you know—I’m personally of the opinion that Mark Zuckerberg is the most powerful man in the world and, you know, is able to influence public opinion similarly. And I never saw any really aggressive conversations about net neutrality there either, although those would tend to be more scattered. We need to take this on systemically, you know, top to bottom.
HOST: Maurice BP-Weeks…
MBP-W: It’s not just an economic power, it is also a political power, and that power doesn’t just come from the amount that they give on the books to legislators. There’s a real fear of going after Zuckerberg, going after Bezos, being seen as going after one of these companies. You know, folks are really scared to take them on. And we end up with these things like we’ll allow Facebook to impanel their own review of their practices, that they get to pick the people on, and then decide whether they want to implement the changes that they—you know, these wacky things that are like, whoa, it would be easier to just have government do that, but we’re so—we’re so afraid of these sort of too-big-to regulate companies, that we don’t do anything.
HOST: That may be changing. The European Union hit Google with billions in fines from 2017 through 2019. But these are just rounding errors for the nearly two trillion dollar corporation.
More significantly, Australia passed a law forcing Facebook and Google to pay news publishers for their content. South Korea forced Apple and Google to open their app stores to alternative payment systems, threatening their 30% gatekeeper commission from developers. Turkey is demanding that Google stop favoring its own properties in local searches, a critical issue with major financial consequences both for Google and its would-be competitors.
In the US, a series of ongoing whistleblower leaks and scandals have continued to turn up the heat on Big Tech.
SM: The opportunity here by taking on monopoly power, directly going after the sort of private accumulation of power, is that it’s a real opportunity to re-invigorate the idea of democratic government.
The House antitrust subcommittee’s work and the investigation that they did this year, one of the really electrifying moments in that was they had a hearing in late July where they had the four CEOs – Jeff Bezos and the others – up there.
Many of the hearings that we see, there’s a kind of deference that lawmakers give to these CEOs, a sense of like: I don’t really understand technology, but you do, and you’re powerful, and all that sort of like–and, you know, letting them grand stand. And this committee did not have any of that. They made it very clear that these companies are subject to the law and subject to accountability in terms of how they just conducted themselves. If one of the CEOs was not answering the question and was starting to like wander off and do a PR thing, they just cut them off and moved on, politely, but, you know, just really clear cut.
And they brought in all of these voices of ordinary people – small business owners, workers, other people who’d been harmed – and gave them—you know, people who they’d uncovered as part of the investigation, really gave them voice during the hearing. And so I think part of the reason I’m excited about this growing anti-monopoly movement is that it’s a chance not only to counter corporate power but inherently within it, a chance to think about how we can get government back that actually works for us.
HOST: When Jeff Bezos returned to Earth from his 15-minute vacation in space on his corporate Blue Origin rocket, he gleefully thanked Amazon employees and shareholders. They had just paid $5.5 billion dollars for his 4 minutes hanging out at the edge of outer space.
It wasn’t rocket science for the world to grok the clueless lunacy of the moment.
MBP-W: I’ve tried to explain something like Bezos’ wealth to children before, and [LAUGHTER] saying if you stacked one dollar bills just of his wealth, you’d be way past the space station by the time you’re finished counting. They get a huge PR boost when they give these tiny, tiny, tiny percentages of their wealth to solve problems that they are actually contributing to.
So Bezos, you know, just recently made a lot of headlines by contributing to a climate fund. Amazon is one of the worst polluters, of course, in America. You know, probably the world.
TH: And I think we need to deal with the sociopathy of great wealth. A number of these people are just literally screaming sociopaths.