News-Journal: As economic power continues to concentrate, so does political power

“We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”
Have the words Louis Brandeis wrote more than 100 years ago once again become relevant?
I have a friend in New York who I joked with yesterday about who hates his cable company more. A draw, we decided. But given the fact there are only four major cable providers in the country, and they don’t compete with each other, none of us can do anything but express frustration about lousy service and ever-increasing fees.
Four is a significant number right now. There are four airlines left. Four, maybe five, banks control over 90 percent of the market. Amazon, Google, Facebook and Apple—four dominant Internet platforms control an astonishing portion of your life.
Maybe there will be three of each soon. How many pharmacy chains can you choose from today? How many pharmaceutical companies are left? Look what is happening with the AT&T merger with Time Warner and the Fox merger with Disney. How few companies will control the information industry?
Just about everyone I talk to is concerned about surrendering to giant corporations so much information about where they go, what they buy, and who they associate with.
Not a problem? For the past 50 years or so, that has been the dominant legal and economic opinion. A Harvard Business Review policy paper by Maurice E. Stucke and Ariel Ezrachi sums it up nicely: “Adopting the Chicago School’s [of Economics] assumptions of self-correcting markets, composed of rational, self-interested market participants, some courts and enforcers sacrificed important political, social, and moral values to promote certain economic beliefs. Competition, for them, was innately effective. Thus, there was no need for robust antitrust enforcement to create or maintain the conditions necessary to make competition effective…The result was that the US government, with some rare high profile exceptions, did not challenge mergers.”
Brandeis, who became one of the greatest Supreme Court justices in American history, did not believe big was necessarily bad. But as the Journal of European Competition Law and Practice explained, “he and many of his contemporaries feared that concentration of economic power aids the concentration of political power, and that such private power can itself undermine and overwhelm public government. Dominant corporations wield outsized influence over political processes and outcomes, be it through lobbying, financing elections, staffing government, funding research, or establishing systemic importance that they can leverage. They use these strategies to win favorable policies, further entrenching their dominance.”
What Brandeis feared a century ago seems to me a succinct description of what is happening today. A number of economists and legal experts agree, and they have given birth to what is being called the “New Brandeis Movement.” To quote Stucke and Ezrachi again:
“An emerging group of young scholars are inquiring whether we truly benefited from competition with little antitrust enforcement. The mounting evidence suggests no. New business formation has steadily declined as a share of the economy since the late 1970s…Competition is decreasing in many significant markets, as they become concentrated. Greater profits are falling in the hands of fewer firms…Since the late 1970s, wealth inequality has grown, and worker mobility has declined. Labor’s share of income in the nonfarm business sector was in the mid-60 percentage points for several decades after WWII, but that too has declined since 2000 to the mid-50s. Despite the higher returns to capital, businesses in markets with rising concentration and less competition are investing relatively less…
“Liberals and conservatives are increasingly warning that consumers are not benefiting from the meager competition in many markets. Their concern is that the current state of competition law (and crony capitalism) benefits the select few at the expense of nearly everyone else.”
There is no doubt the country needs a far more robust discussion about how to deal with the ever-increasing concentration of economic power and its effect on our democracy. I’m glad the antimonopoly ideas of the New Brandeis Movement are becoming part of that important debate.

Ted Kaufman is a former U.S. senator from Delaware.