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The Latest Antimonopoly 'Swindle'
I've tried to make the small point that antimonopoly policy is
everywhere a political matter--and almost invariably an explosive one, since
it inherently poses the threat of rupturing the flow of monopoly income that
sustains the wealth and power of each society's relative handful of elite
families. In each of the world's 200 countries, there's a 'chief executive'
who, as head of the executive apparatus of the state, generally has the
power to enforce (or get enacted, and then enforce) an antimonopoly policy
of whatever degree of stringency he happens to prefer. In the democracies,
the top executives will of course make that 'stringency' decision in such a
way as to maximize their (or their party's) re-election prospects.
Let me offer a 'general theory' of antimonopoly policy: Governments
will act against monopolies ONLY to the extent necessary to prevent (1) a
radical overthrow of the current economic SYSTEM or (2) their own ouster at
the next election.
The second point is intuitively clear: Politicians in the
democracies respond, of necessity, to the demands of their voting majorities
and will therefore deliver just enough monopoly protection to avoid being
kicked out of office. (To go further would be to needlessly antagonize the
wealthy monopolists--thus unnecessarily drying up their campaign
The first of my principles here--that governments can be expected to
adopt and enforce antimonopoly policies as a last resort (beyond keeping
their own members in power) to save their particular economic SYSTEMS from
replacement by competing economic arrangements (e.g., nationalization of
industry, etc)--is illustrated by the passage of America's first antitrust
statute, the Sherman Act of 1890. That law's sponsor, Senator Sherman, was
of course a Republican. The Congress itself was overwhelmingly Republican
and deeply conservative. But social revolution was in the air. The ideas
of Karl Marx (1818-1883) were taking root in Europe and anti-monopoly
rumbles were being heard in Washington.
Senator Sherman, speaking to his conservative colleagues on the
Senate floor, observed that "if we will not endure a king as a political
power, we should not endure a king over the production, transportation, and
sale of any of the necessities of life. If we would not submit to an
emperor, we should not submit to an autocrat of trade." The problem, he
reminded them, was "the inequality of condition, of wealth, and opportunity
that has grown within a single generation out of the concentration of
capital into vast combinations to control production and to break down
Capitalism itself, Senator Sherman warned his fellow conservatives
in 1890, was at stake: "Sir, now the people of the United States, as well
as other countries, are feeling the power and grasp of these combinations,
and are demanding of every legislature and of Congress a remedy of this
evil... You must heed their appeal or be ready for the socialist, the
communist, and the nihilist. Society is now disturbed by forces never felt
before. The popular mind is agitated with problems that may disturb social
order...." Conservatives support antimonopoly policy when capitalism itself
is faced with, to borrow a phrase, a lot of peasants carrying pitchforks.
That was then. This is now. Today, the U.S. has 2 antimonopoly
'enforcement' agencies, Justice's antitrust division and the Federal Trade
Commission (FTC), and Bill Clinton has just given us a striking demostration
of how seriously he takes the issue of monopoly in America. To fill two
vacancies on the FTC, he's just named Mozelle Thompson and Orson Swindle.
Never heard of Mozelle? Ever heard of Skadden, Arps, the giant law firm
that represents America's great monopolies? An anonymous commentator here
relates that Mozelle, in addition to being "smart and congenial," knows how
the merger "process" works, thanks to his long labors in
merger-and-acquisition work at this big pro-monopoly law factory. Put a
specialist in private monopoly-building (via merger) on a public agency
that's supposed to prevent precisely that anti-public "process"?
Clinton's other new FTC member is even more revealing of his disdain
for antimonopoly enforcement. Orson Swindle. Spokesman for the 1992
presidential campaign of Ross Perot, who received, what, some 12% of the
national vote? Close friend of (Republican) Senator John McCain. More
incompetence at the FTC but presumably more votes to be siphoned out of the
Perot constituency in '98 and 2000. From another list, we have the following
anonymous assessment of this latest of Clinton's FTC appointments:
"Orson Swindle is not a lawyer or an economist. His overriding
is that he was John McCain's roommate in the Hanoi Hilton for a
time. Strangely, McCain was able to get the White House to take Swindle
even though he was the main spokesman for the Perot campaign in 1992.
Along was way, Swindle was quoted as saying that it would be a
"disaster" if Clinton were elected. In the aftermath, Perot made a
saying that Swindle was speaking for himself, not the campaign.
Swindle was an unsuccessful candidate for Congress from Hawaii. He
had a position (at HUD or Agriculture) during the Reagan
administration where he stirred up some controversy and was
subsequently moved. Swindle is a political creature who has
done little in his 60+ years that would appear to be related to the
FTC's work. I don't know how he will turn out, but none of the
America's chief executive, Bill Clinton, obviously hasn't the
slightest interest in antimonopoly policy. And since there's no discernible
public demand for it, why should he?
Charles Mueller, Editor
ANTITRUST LAW & ECONOMICS REVIEW