Two dramatic related facts underscore the claims of both Reich and Teachout. The much discussed rise of wealth among the top 0.1 percent, which now has 20 percent of the nation’s wealth compared with only 10 percent 40 years ago, has been brought to light in recent years by the innovative economists Thomas Piketty and Emmanuel Saez. The flip side is that wages for the large majority of American workers have stagnated more or less over this same period.
According to Reich, the “anti-establishment fury” that is the result of such inequity supersedes racial prejudice as the cause of Trump’s success. In 2001, more than three out of four workers were satisfied that they could get ahead by working hard. In 2014, only slightly more than one out of two thought so. Voters wanted badly to blame it all on the swamp Trump promised to clean up.
For Reich, the big oligarchical companies have the lobbying and campaign-financing muscle to mold the rules in their own favor. They can win enormous tax cuts, suppress financial and environmental regulations, acquire new patents and subsidies, fight for free trade — it is a long list. For years, they successfully battled against higher minimum wages and labor laws that restricted their union-busting efforts.
Teachout, a dogged scholar, lays out a comprehensive list of damage done to American consumers by monopolized industries like Big Pharma, fossil fuels, Silicon Valley, health insurance, banking and communications giants from Verizon to Facebook and Google. She provides example after example of how these companies limit consumer choice and suppress regulation. Google and Facebook may make access to some news easier, but they also undermine the profitability of the print news organizations, putting many of them out of business. Big Pharma is protected from competition by questionable patents and by ever lighter regulations. The nation’s private health care system, dominated by a relative handful of insurance companies, keeps costs much higher in the United States than in the rest of the rich world. For Teachout, the solution follows as night follows day. Break up the big companies and reintroduce competition. (Surprisingly, this is straightforward mainstream economic theory.)
But both Reich and especially Teachout should temper their anticorporate zeal, at least to a degree. Big companies have often done good while also doing bad. In the 1800s, the A.&P. grocery chain provided a wide range of products, though it put countless mom and pop stores out of business. Ford built a cheap functional car in the 1920s, and Apple an affordable personal computer in recent years. Some balance is required.
Still, they are mostly right. Here is Teachout’s general recommendation: “Instead of protesting Pfizer on Tuesday for hiking drug prices, Comcast on Wednesday for suppressing union voices and Amazon on Thursday for getting billions in subsidies, we should unite behind a coherent agenda, demanding that antitrust authorities break up Pfizer and Comcast, Amazon and Facebook, Monsanto and Tyson.”
Both authors say that Ronald Reagan led the way to the swift undoing of traditional antitrust regulation in the 1980s. But Reich is almost as harsh on the Clinton and Obama administrations. Even when the Democrats controlled both houses of Congress, he writes, they allowed antitrust enforcement to “ossify,” let companies hammer away at trade unions and went easy on Wall Street. They were also soft on the issue of campaign contributions, failing to advocate for public financing of elections.