Back in March 2019, shortly after she announced her candidacy for President, Massachusetts Senator Elizabeth Warren appeared on MSNBC to discuss her plan to break up the Big Tech companies.
“What this is about is about competition,” she began. “It’s about all those little businesses and start-up businesses and entrepreneurs who want to put their products on Amazon or on Google.” But, she said, there’s a problem. It’s that Amazon and Google are both platforms that compete against the companies that use them.
The immense power amassed by America’s biggest corporations allows them to co-opt government and pass laws that benefit themselves at the expense of everyone else. Monopoly is tyranny, Teachout declares.
Moreover, Warren noted, “they don’t just compete straight up.” Big Tech firms collect loads of data from their users so they’re able to see which companies they can best compete against. Once they target you, “they put their product on page one and your product back on page six and kill your business.”
Warren contended that Amazon and Google, along with Facebook and Apple, are monopolies that need to be split up. “They’ve got too much power,” she declared. “They use that power now to dominate markets, to chew up competitors, and ultimately to change the consumer experience. We gotta change that.”
This same charge is taken up by Zephyr Teachout, whose forthcoming book, Break ’Em Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money, seeks to put America’s monopoly problem at the forefront of progressive politics. Teachout’s central premise is that corporate concentration has amplified modern society’s major ills: income inequality, limitations to worker freedom, low wages, money in politics, Wall Street speculation, and even racism.
The book also serves as a dire warning for our age of global pandemic.
Teachout, an attorney, political activist, and antitrust expert who ran unsuccessfully for New York attorney general in 2018, focuses on strategies to fight monopoly power. She argues that the left is too focused on policies like raising minimum wages and progressive taxation and not focused enough on stopping mergers and divestiture. Progressives, in other words, should be more concerned with “before-the-fact redistribution of power” than “after-the-fact redistribution of wealth.”
Like Warren, Teachout asserts that political power is the real issue at stake. The immense power amassed by America’s biggest corporations allows them to co-opt government and pass laws that benefit themselves at the expense of everyone else. Monopoly is tyranny, Teachout declares. And these massive corporations are “a new political phenomenon, a twenty-first-century form of centralized, authoritarian government.” To change them, she believes, “we must all embrace an anti-monopoly vision in order to achieve the moral economy that we deserve.”
Our nation’s “immoral economy,” as Teachout calls it, began with Ronald Reagan. In the 1980s, his administration overturned decades of antitrust laws, arguing that consolidation would lead to lower consumer prices. But this model disadvantaged workers, whose salaries remained stagnant while worker productivity has shot up 70 percent. Meanwhile, executive pay has skyrocketed 1,000 percent.
The impact on workers has been devastating.
Teachout illustrates this point with a tragic story. She tells us about Dean Pierson, a New York dairy farmer who walked into his barn one morning, shot his fifty-one cows in the head, and then shot himself. The number of farmers dying by suicide has jumped in recent years, she explains, a trend she blames in part on the intense micromanagement that Big Ag has imposed on small farmers.
Tyson, like Perdue and Koch Foods, who together own 90 percent of the broiler market, demands that its farmers do everything alike: build chicken houses to exact specifications; use the lighting, feeding, and watering schedules that Tyson mandates; and so on. Meanwhile, farmers are forbidden from talking to each other about any of this. They’re also forced to sign arbitration agreements that mandate any dispute with the processor stays secret.
This allows Tyson to secretly experiment on its farmers. For example, the company might demand that a supplier use new feed which, if the chickens don’t like it, means the farmer bears the cost when it results in thinner chickens. Teachout even speculates that Tyson tests the breaking points of farmers to determine how little to pay them before they quit. She offers this startling statistic: While the chicken industry is a $90 billion-a-year business, 70 percent of farmers make less than poverty wages.
Teachout asks a provocative question: How many American workers feel as if their employer treats them more like subjects than like free citizens? Countless, Teachout suggests, because corporate America is doing the same thing to them as it does with its farmers.
For a relatively short book, Break ’Em Up covers a lot of ground, including mandatory arbitration agreements, corporate surveillance, how Facebook and Google are killing journalism, why labor unions accept big mergers, how consolidation drives racism, and Wall Street’s role in creating monopolies.
Teachout aims to not only ignite a new antitrust movement but also re-imagine American business and, ultimately, American life. Indeed, in a moving ending that verges on the Pollyanna-ish, Teachout envisions a business environment where the ultimate goal is not to maximize profit, but rather to maximize human dignity and worker freedom.
This ideal worker environment contrasts starkly with Teachout’s case studies, especially her telling of the rise of the ride-hailing company Uber. Uber conquered New York, Teachout explains, by breaking local laws, offering fares so low that yellow cabs couldn’t compete, and paying drivers huge bonuses. Then, after Uber eliminated its competition, it raised fares and slashed driver pay.
This is classic “stage one” monopoly behavior, Teachout observes, and it had been illegal before the 1980s. Uber drivers are now “gig workers” who aren’t provided health insurance and, like chicken farmers, are left holding all the risk and can be fired for any reason whatsoever.
Teachout also uses Uber’s story to bolster her argument that the left can be overly focused on policy issues at the expense of power issues. The cabbies and Uber drivers she spoke with, for example, told her that progressives spent all their time fighting for the $15 minimum wage while Uber was busy pulling its “bait and switch.”
In fact, on the same day the raise was announced, Mayor Bill de Blasio declared there would be no cap on the number of Uber drivers in New York City. This left thousands of cabbies holding expensive medallions (permits) that have lost as much as 80 percent of their value, sparking a rise in cabbies taking their lives.
Break ’Em Up would have benefited from an explanation of how breaking up these big firms would work in practice. The steps involved, and the amount of time they would take, remain opaque. But Teachout has a clear vision of how to create the pressure to effect change.
First, she recommends launching an Occupy-style movement that would stage mass protests to demand that large corporations be broken up. Publicly financed elections are also key, so candidates could eschew corporate money.
We must, she feels, also elect politicians who will pass new antitrust laws while appointing judges who will enforce existing ones. Teachout is emphatic, however, that consumer boycotts be avoided. Why? Consolidation gives consumers too few choices (how do you boycott Google?) and because she insists we approach the fight from a civic standpoint, not a consumer standpoint.
Earlier this year, when the coronavirus began making headlines, Teachout noticed that Matt Stoller, an expert on monopoly power, began sounding the alarm about the pandemic’s effects on America’s supply lines. So she decided to interview him.
Stoller’s key message, Teachout wrote in her introduction (the interview appeared in Jacobin magazine), was that the coronavirus is “making the argument for antitrust” because “single sources of supply for all kinds of suddenly essential medical needs are leading to shortages.” Americans are currently watching this unfold in an alarming manner, as state governments are forced to bid against each other to procure life-saving ventilators and personal protective equipment.
John Tyson, the chairman of Tyson Foods, took out a full-page ad in The New York Times on April 26 declaring that “the food supply chain is breaking.” Following an outbreak of COVID-19 at the company, Tyson had been forced to shutter plants across the country. Because of this, he warned, “there will be limited supply of our products available in grocery stores.”
But Teachout argues persuasively that the economy can do as well or better without relying on huge corporations that, in this case and others, have failed to take care of their workers. She envisions an economy where most businesses are independently owned, and everyone has a bigger say in the choices that get made.
“Monopolies tend to destroy the best in human character,” she writes. “Decentralized power allows it to flourish.”