The Curse of Bigness

The Curse of Bigness Plot Summary

Introduction

At the dawn of the 20th century, America faced an unprecedented challenge: giant corporations called "trusts" had seized control of entire industries, wielding power that rivaled the government itself. The nation's response to this challenge – the creation and evolution of antitrust law – represents one of the most consequential yet overlooked chapters in American history. This struggle between economic concentration and democratic governance continues to shape our world today. The story of antitrust is essentially a tale of competing visions for America. On one side stood figures like Louis Brandeis, who feared monopoly power as a threat to democracy itself. On the other were industrial titans like John D. Rockefeller and J.P. Morgan, who believed concentrated economic power represented progress and efficiency. Between these poles, we find presidents, judges, economists, and everyday citizens wrestling with fundamental questions: How much economic power is too much? Who should control the economy – private corporations or democratic institutions? And what kind of economic structure best serves human flourishing? For anyone seeking to understand today's debates about big tech, economic inequality, and corporate power, this historical journey provides essential context and surprising insights.

Chapter 1: The Trust Movement: Birth of Corporate Monopolies (1880s-1900s)

The late nineteenth century witnessed a dramatic transformation of the American economy. From 1895 to 1904 alone, over 2,200 manufacturing firms merged into just 157 corporations, most dominating their industries. This "Trust Movement" sought nothing less than the complete reorganization of the American economy into monopolies controlling entire sectors – from oil and steel to sugar, tobacco, and railroads. At the heart of this transformation stood figures like John D. Rockefeller of Standard Oil and banker J.P. Morgan. Morgan, in particular, engineered hundreds of mergers, creating giants like U.S. Steel, consolidating railroads, and backing AT&T's telecommunications monopoly. These monopolists amassed unprecedented fortunes – when Morgan bought out Andrew Carnegie's steel business, the payment instantly made Carnegie one of the richest men in world history, worth about $310 billion in today's dollars. The Trust Movement wasn't merely about profit. Its adherents embraced "Social Darwinism," seeing monopoly as an evolutionary advance over wasteful competition. As Rockefeller put it: "The American Beauty Rose can be produced in its splendor and fragrance only by sacrificing the early buds which grow up around it." This ideology portrayed monopolies as natural and inevitable – "the working out of a law of nature, and a law of God." Monopolists saw themselves as superior beings whose consolidation of economic power represented progress and efficiency. Yet this concentration of economic power marked a radical departure from American traditions. The nation had been founded partly in revolt against Crown monopolies – the Boston Tea Party itself was essentially an anti-monopoly protest. As historian Richard Hofstadter noted, America had been "overwhelmingly a nation of farmers and small-town entrepreneurs—ambitious, mobile, optimistic, speculative, anti-authoritarian, egalitarian, and competitive." The rise of monopolies threatened this tradition and the very premise of democratic governance. It created stark inequalities, with the super-wealthy living in gilded mansions while workers earned one or two dollars per day. Public resistance to monopoly power eventually led to the passage of the Sherman Antitrust Act in 1890. This landmark legislation declared illegal "every contract, combination... or conspiracy in restraint of trade" and made it a felony to "monopolize, or attempt to monopolize" commerce. However, under President William McKinley's laissez-faire administration, the law remained largely unenforced. The stage was set for a great national debate: Would America embrace an economy dominated by monopolies, or would it reassert the principle of competition?

Chapter 2: Brandeis's Vision: Economic Liberty as Democratic Foundation

Louis Brandeis, born in 1856 to entrepreneurial immigrants in Louisville, Kentucky, would become the most influential voice against monopoly power in American history. His formative years in Louisville – a flourishing regional center with many small producers and businesses – profoundly shaped his economic vision. To Brandeis, Louisville represented an "economic democracy" where individuals could thrive through intelligence and perseverance, free from the domination of giant corporations. Brandeis's opposition to economic concentration crystallized during his battle against J.P. Morgan's monopolization of Northeastern railroads. As a business lawyer investigating the New Haven Railroad monopoly, Brandeis discovered that behind the promises of "progress and prosperity" lay accounting fraud, bribery of politicians, and payoffs to journalists. "Lying and sneaking are always bad, no matter what the ends," he later remarked. He concluded that "excessive bigness" created both inefficiencies and moral hazards, with monopolies becoming increasingly disconnected from human needs. For Brandeis, the economy's purpose transcended mere wealth creation. He believed the "ideal" of democracy should be "the development of the individual for his own and the common good." Economic arrangements should provide the conditions for human flourishing – what he called "the right to live, and not merely to exist." This required economic liberty in its fullest sense: freedom not just from government oppression but from industrial domination as well. "Men are not free," he wrote, "if dependent industrially on the arbitrary will of another." Brandeis recognized that for most people, autonomy was influenced more by economic structures than abstract political freedoms. The conditions of work – hours, job security, treatment by employers – determined how much of life was actually lived. Beyond work, everyday freedoms were shaped by economic matters like housing, transportation, and healthcare. Real freedom meant freedom from both public and private coercion, requiring an economy built to human scale. His economic vision rejected both unrestrained capitalism and state socialism. He advocated for a decentralized economy of smaller, competitive firms, with laws to protect workers, ban child labor, establish maximum work hours, and break monopoly power. He believed both big business and big government posed threats to human liberty, and that all institutions ran the risk of putting their own interests above the humans they supposedly served. Brandeis's lasting importance lies in his vision of what an economy should be for – not merely generating wealth, but creating conditions for human thriving and democratic citizenship. His ideas would fundamentally shape antitrust law and influence generations of reformers seeking to balance economic freedom with human needs.

Chapter 3: Roosevelt's Trust-Busting Era: Government vs. Monopoly Power

The assassination of President William McKinley in September 1901 marked a decisive turning point in American economic history. Under McKinley, laissez-faire reigned supreme, with Wall Street rather than the White House controlling the economy. The Sherman Antitrust Act remained essentially dormant, even as J.P. Morgan brazenly created the U.S. Steel trust in direct violation of the law. But McKinley's death elevated his vice president, Theodore Roosevelt, to the presidency – a man with radically different views on monopoly power. Roosevelt quickly demonstrated his willingness to challenge the mightiest economic powers. In 1902, he ordered his attorney general to investigate the Northern Securities Company, a railroad monopoly created by Morgan and other magnates. When informed of the investigation, an indignant Morgan arrived at the White House, proposing that "if we have done anything wrong, send your man to my man and they can fix it up." Roosevelt refused the accommodation, responding through his attorney general: "We don't want to fix it up, we want to stop it." The government filed suit, and the Supreme Court ultimately ordered the dissolution of the Northern Securities trust – a landmark victory establishing that even the wealthiest industrialists must obey the law. For Roosevelt, challenging monopoly power was fundamentally about democracy. He saw economic policy as properly subject to democratic control, not as a separate realm beyond government reach. "When aggregated wealth demands what is unfair," he declared, "its immense power can be met only by the still greater power of the people as a whole." Roosevelt became known as the "trustbuster," establishing an archetype that would inspire generations of antitrust enforcers: the courageous government official unafraid to challenge massive private power. The Roosevelt administration's most significant antitrust victory came against Standard Oil, John D. Rockefeller's pioneering monopoly. After years of investigation revealing decades of abusive practices – from exclusionary cartels to predatory pricing – the Supreme Court in 1911 ordered Standard Oil broken into 34 separate companies. Notably, within a year of the breakup, the combined value of these companies had doubled, and within several years had increased five-fold, suggesting that monopoly had actually inhibited rather than enhanced economic efficiency. Roosevelt's approach to antitrust evolved over time. He distinguished between "bad trusts" that abused their power and "good trusts" that achieved dominance through superior products or business acumen. In his later years, during his 1912 presidential campaign, he advocated a "New Nationalism" that would accept large corporations but subject them to stronger government regulation – a form of "regulated monopoly." This vision was decisively rejected by voters, who instead elected Woodrow Wilson, whose "regulated competition" platform built on Brandeis's ideas promised to restore a competitive economy through vigorous antitrust enforcement. The 1912 election represented a rare moment when Americans directly voted on what kind of economic order they wished to live under. Wilson's victory, followed by Congress strengthening the antitrust laws with the Clayton Act and creating the Federal Trade Commission in 1914, amounted to a democratic ratification of the view that America should be an economy of competition rather than monopoly. As Brandeis would later say, the nation had chosen decentralization over concentration – a choice with constitutional significance that has never been democratically repealed.

Chapter 4: The Chicago School Revolution: Rewriting Antitrust's Purpose

The decades following World War II marked the height of antitrust's influence and power. Strong antitrust enforcement became widely accepted as essential to democracy, partly in reaction to the role monopolies had played in facilitating fascism. Nazi Germany's rise had been supported by monopolies like I.G. Farben, Krupp, and Siemens, prompting a U.S. military report to conclude: "Germany under the Nazi set-up built up a great series of industrial monopolies... The monopolies soon got control of Germany, brought Hitler to power, and forced virtually the whole world into war." This recognition prompted Congress to strengthen antitrust laws with the Celler-Kefauver Anti-Merger Act of 1950, designed to prevent industry concentration before it occurred. As Senator Estes Kefauver warned: "Through monopolistic mergers the people are losing power to direct their own economic welfare. When they lose the power to direct their economic welfare they also lose the means to direct their political future." During this period, Europe also adopted competition laws modeled on American antitrust, seeing them as essential to preventing the return of totalitarianism. However, in the 1950s, a revolutionary challenge to antitrust began at the University of Chicago. Aaron Director, a mysterious Socrates-like figure who taught at Chicago's law school, began critiquing Supreme Court antitrust decisions as harmful to "consumer welfare" – by which he meant lower prices. Director's approach found its most influential advocate in his student Robert Bork, who underwent what he called a "religious conversion" from socialism to free-market ideology under Director's tutelage. Bork's 1966 paper, "Legislative Intent and the Policy of the Sherman Act," was arguably the most influential antitrust publication in history. He audaciously claimed that Congress had intended the Sherman Act to serve only one goal: "consumer welfare" or lower prices – despite abundant evidence that Congress had broader economic and political concerns. Bork insisted that any antitrust case must prove the complained-of behavior actually raised consumer prices, dismissing concerns about political power, small business protection, or economic structure. Bork skillfully tied his consumer welfare theory to the growing conservative critique of "judicial activism," portraying traditional antitrust as encouraging judicial irresponsibility. He offered judges a seemingly rigorous, scientific approach to deciding complex cases – simply ask whether a practice demonstrably harms consumers through higher prices. If there might be any efficiency explanation, no matter how theoretical, the practice should be permitted. Though initially considered radical, Bork's ideas gained influence through the 1970s. In 1979, the Supreme Court adopted his framework, with Chief Justice Burger writing that "Congress designed the Sherman Act as a 'consumer welfare prescription'" – citing "R. Bork, The Antitrust Paradox 66 (1979)." Through this judicial citation, Bork's reinterpretation of antitrust – essentially laissez-faire economics in new clothing – became the law of the land, dramatically narrowing the scope of antitrust enforcement and abandoning its broader democratic mission.

Chapter 5: The New Gilded Age: Tech Giants and Renewed Monopoly Concerns

The late 1990s and early 2000s saw the internet revolution spawn a chaotic new economic landscape. Startups rose and fell overnight, and established businesses seemed vulnerable to "disruption" from nimble digital competitors. In this environment of rapid change, it seemed impossible that lasting monopolies could emerge. Tech industry voices insisted that competition was always "just one click away," and that traditional economic concepts like barriers to entry were obsolete in the digital age. This narrative of perpetual competition helped mask a profound shift in antitrust enforcement. During the George W. Bush administration (2001-2009), the Justice Department filed zero anti-monopoly cases and blocked no major mergers. Even under President Obama, who had promised "an antitrust division that actually believes in antitrust law," enforcement remained timid. The judiciary, thoroughly influenced by Chicago School thinking, had made successful antitrust cases increasingly difficult to win. The results of this enforcement vacuum were dramatic. Industries across the economy underwent unprecedented consolidation. The AT&T monopoly, broken into eight companies in the 1980s, was allowed to reconstitute itself into two giants. Three airlines came to dominate domestic air travel. The pharmaceutical industry consolidated from sixty-odd firms to about ten. Global beer production fell under the control of a single company. A 2017 study found that 75 percent of American industries had become more concentrated since 1997. Perhaps nowhere was this consolidation more consequential than in technology. As the 2010s progressed, a few firms – Google, Facebook, and Amazon – established dominant positions that grew more entrenched over time. Facebook systematically acquired potential competitors like Instagram and WhatsApp. Google bought YouTube and other rivals. Amazon expanded its dominance in e-commerce through both acquisitions and aggressive competitive tactics. Antitrust authorities proved particularly blind to tech consolidation. When Facebook purchased Instagram in 2012, regulators concluded the companies weren't competitors – despite Instagram's rapidly growing challenge to Facebook's social media dominance. As TIME magazine later noted, "Buying Instagram conveyed to investors that the company was serious about dominating the mobile ecosystem while also neutralizing a nascent competitor." Similarly, Facebook's $19 billion acquisition of WhatsApp eliminated another major competitive threat. The tech giants justified their dominance with narratives of benevolent service. Facebook claimed it wasn't building a global empire but "bringing the world closer together." Google said it merely wanted to organize the world's information. Amazon portrayed itself as singularly focused on serving consumers. Some Silicon Valley voices, like investor Peter Thiel, went further, explicitly celebrating monopoly: "Competition is for losers," he wrote, arguing that "only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits." By the late 2010s, this new era of monopoly had produced consequences strikingly similar to the original Gilded Age: extreme wealth concentration, declining entrepreneurship, stagnant wages, and growing public anger at economic and political systems that seemed rigged against ordinary people. The question became whether antitrust law could be revived to address these challenges before more radical solutions gained traction.

Chapter 6: Neo-Brandeisian Revival: Reclaiming Antitrust's Original Mission

Around 2015, a new intellectual movement began challenging the four-decade dominance of Chicago School antitrust. Drawing inspiration from Louis Brandeis and earlier antitrust traditions, these "Neo-Brandeisians" argued that antitrust had strayed far from its original purpose. They called for recovering the law's broader concerns with economic structure, political power, and human flourishing – not just consumer prices. The Neo-Brandeisian critique started with merger review. They argued that the agencies' approach had drifted so far from Congressional intent as to "make a mockery of the democratic process." The 1950 Anti-Merger Act had directed courts to block mergers whose effect "may be substantially to lessen competition," yet agencies now required clear proof of price increases – a standard found nowhere in the law's text. This technocratic approach had allowed mergers like Facebook-Instagram to proceed despite obvious competitive concerns, because the narrow focus on consumer prices missed the broader competitive implications. Beyond mergers, Neo-Brandeisians called for a revival of the "big case" tradition pioneered by Theodore Roosevelt – bringing major actions against dominant firms that control entire industries. They pointed to the historical success of cases like the AT&T breakup, which unleashed innovation in telecommunications and computing. Even cases considered failures, like the IBM antitrust suit of the 1970s, had profound beneficial effects: IBM dropped its practice of bundling software with hardware, helping create an independent software industry, and adopted a more open approach to personal computing. Most controversially, Neo-Brandeisians advocated a return to structural remedies like breakups. They argued that breaking up dominant firms, especially in technology, could reintroduce competition without the enforcement difficulties of behavioral remedies. A Facebook breakup that undid the Instagram and WhatsApp acquisitions, for example, could restore competition in social media with minimal social cost. They also proposed new tools like the UK's "market investigation" authority, which can order structural changes in markets that remain uncompetitive for extended periods. Perhaps most fundamentally, Neo-Brandeisians challenged antitrust's exclusive focus on "consumer welfare." They argued that courts should instead assess whether conduct "promotes competition or whether it is such as may suppress or even destroy competition" – the standard articulated by Brandeis himself in 1918. This approach asks courts to protect a process (competition) rather than maximize an abstract value (welfare) that is exceedingly difficult to measure. This approach found legal support in antitrust's original legislative history. While Congress never mentioned "consumer welfare" or "allocative efficiency," it repeatedly discussed the choice between competition and monopoly. As Representative Dick Thompson Morgan said in 1914: "the one thing we wish to maintain, and retain and sustain, is competition. We want to destroy monopoly and restore and maintain competition." The Supreme Court had consistently recognized this goal, stating in 1978 that "Congress... sought to establish a regime of competition as the fundamental principle governing commerce in this country." By the late 2010s, Neo-Brandeisian ideas had moved from academic criticism to mainstream policy debate. Both political parties began questioning the tech giants' power, and antitrust enforcement agencies showed renewed interest in challenging dominant firms. The movement recognized that antitrust alone couldn't solve all economic problems, but insisted that economic structure profoundly influences political democracy – and that concentrated private power poses as great a threat to liberty as government overreach.

Summary

Throughout American history, the tension between economic concentration and democratic governance has defined our national experience. From the original Trust Movement through today's tech giants, we have repeatedly confronted the same fundamental question: Is extreme economic concentration compatible with democracy itself? The evidence suggests it is not. When economic power concentrates in too few hands, political power follows, undermining democratic institutions and creating societies that serve the few rather than the many. The historic purpose of antitrust law was to prevent this outcome – to serve as a check on private power just as the Constitution provides checks on public power. The path forward requires reclaiming antitrust's original mission. This means strengthening merger review to prevent harmful consolidation, reviving the tradition of challenging dominant firms, considering structural remedies like breakups, and recognizing that antitrust serves broader economic and political goals beyond just lower prices. Most importantly, it requires understanding that economic structure is inseparable from democratic governance. As Louis Brandeis recognized, true freedom requires not just political rights but economic conditions that allow human flourishing. By controlling monopoly power and preserving competitive markets, we can build an economy that serves democracy rather than undermining it – one that provides not just material prosperity but the economic liberty essential to a society of equals.

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Tim Wu

Tim Wu is an author, a professor at Columbia Law School, and a contributing writer for the New York Times.. He has written about technology in numerous publications, and coined the phrase "net neutrality."

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