The United States is the world’s leading free market nation and it has always seemed to me that they take its basic principles very seriously. While greatly encouraging capitalism, they have understood that it isn’t the free market. Indeed, the two can be incompatible. Capitalism by its very nature ultimately corrupts free markets if it is not curbed. Capitalism unchained leads to monopoly and monopoly, not government, is the greatest enemy of free markets. Americans have always understood this even though they have tolerated periods when the wisdom was ignored.
Going back to the founding fathers, Thomas Jefferson, lead author of the Declaration of Independence, once wrote “I hope that we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”
During the latter part of the 19th century, the Gilded Age, when the “monied corporations” were indeed both challenging government and defying laws, Americans elected Teddy Roosevelt, who went on to break up monopolies in oil, railroads and tobacco to restore competition.
In this the 21st century, as the Americans experience a new Gilded Age of great wealth creation accompanied by great inequality, capitalists are once again asserting dominance. Dot.com billionaires in particular amass extravagant fortunes from extravagant monopolies that threaten not only free markets but democracy as well.
The U.S. has allowed its antitrust regulation to languish and oligarchs and corporations, especially in the tech sector, have taken full advantage. But recently it appears that, like the ghost of Teddy Roosevelt, the spirit of trust-busting is back.
Congress has introduced introduced a number of ambitious bills targeting primarily Big Tech and aimed at reducing corporate consolidation. If passed, the legislation would represent the biggest update to American monopoly laws in decades.
It would become easier to break up businesses that used dominance in one area to get a stronghold in another; acquisitions of rivals would become more difficult; and regulators would be better equipped to police corporations.
It will be a fight. Tech has the largest army of lobbyists in Washington and have powerful influence through their funding of think tanks and academics, and the employment of top antitrust lawyers. However, the bills have support from both Democrats and Republicans which bodes well for their success.
Here in the Great White North, we have never been as individualistic as the Americans, and therefore never as trusting as they in free markets, or capitalism for that matter. As a result, we have had less interest in upholding the principles of either. An example was the Canadian fraudster Conrad Black, who engaged in his mischief with impunity in this country but wound up in prison in the less forgiving U.S.
By periodically adjusting the relationship between capitalism and the markets, the Americans have to some degree done our policing for us. This proposed adjustment is both refreshing and long overdue.