Christopher Hayes: Hello and welcome back to The Breakdown, Week 51, Episode 51, in a collector series. This week we have a question from a listener who did not give his or her name. The listener writes in with the simple question: “Could you explain our antitrust laws and why they don’t seem to apply to anyone anymore?” It’s a very good question, I think mostly likely prompted by the news in the past week that AT&T was going to purchase T-Mobile which is one of the other major carriers, further consolidating the market for cell phone carriage down so that there’ll only be three major carriers left. A lot of people think Sprint, which is the third, will probably be absorbed at some point too, and we may be headed toward a future in which we have only two major cell phone carriers. My sense is that people aren’t particularly happy with their cell phone service and are scratching their heads as it appears as though there’s going to be regulatory permission for this merger to happen. I happen to have a great guest for this topic which is partly why I want to do this question.
Barry Lynn is director of the Markets, Enterprise, and Resiliency Initiative and senior fellow at the New America Foundation. He recently wrote just a tremendously interesting book called Cornered: The New Monopoly Capitalism and the Economics of Destruction, which I recommend to anyone listening to this. It’s a really eye-opening book, and Barry, it’s a pleasure to have you on The Breakdown.
Barry C. Lynn: It’s great to be here today, Chris.
OK, so maybe—this is obviously a broad question and we only have a little bit of time—so let’s start with this: tell us what antitrust laws are. Just kind of define the concept in the legal terrain, and then maybe we’ll step through a little bit of the history.
We’ve been told that antitrust is sort of a technical issue and we use these laws to engineer competition and ensure that we have healthy competition in our economy. The origins of antitrust are really quite different, however. Anti-monopoly law, which is really a better way to understand what antitrust is, is fundamentally a set of political laws. The purpose of these laws was originally to ensure that we didn’t have concentrations of political power—people using their control over something we need (e.g., grain, transportation, etc.) to enrich themselves and raise themselves up above their fellow citizens politically.
So the context for this in its modern incarnation is sort of late-nineteenth-century industrial capitalism, a time in which a number of extremely profitable, important, emerging industries (e.g., the railroad and Standard Oil run by Rockefeller) were basically monopolies. Basically my understanding of how Rockefeller operated in Standard Oil was that there really was just one oil company in America and this gave rise to a response—a backlash—right? That’s the sort of origin of antitrust law. What’s the political context of the first antitrust laws and what is the first antitrust law?
To understand this we actually have to go back to 1773 and the original Tea Party. Because people have been saying the original Tea Party was about standing up against taxation without representation. That was an important issue, but the main purpose of the Tea Party was actually people standing up against monopolization of commerce within the colonies by a single foreign company, which was the British-East India Company. So in some ways America was born out of a rebellion against commercial monopolization—