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A century ago, “anti-trust” was a serious political subject, a crusade even, around which political careers – Theodore Roosevelt’s to name but one – were partly or wholly built.

Today, when the concept could use serious activation more than in generations, it has become a sad joke.

Here’s a semi-clear Google definition: “relating to legislation preventing or controlling trusts or other monopolies, with the intention of promoting competition in business.”

It’s semi-clear because it begs another question in the new millennium, which is: What’s that trust thing about? We sometimes hear about trusts in the sense of “living trusts,” a personal financial structure; or a “charitable trust”, an irrevocable organization to hold funds for charitable uses; or a “land trust” which does something similar for property; or else we think of it in the sense of having confidence or faith in someone or something else (as in trusting a friend to carry out a request).

The “trust” part of “anti-trust” came from something else altogether. An 1888 academic article, reflecting the sense of that time, said a trust is “one person holding the title of property, whether land or chattels, for the benefit of another, termed a beneficiary. Nothing can be more common or more useful. But the word is now loosely applied to a certain class, of commercial agreements and, by reason of a popular and unreasoning dread of their effect, the term itself has become contaminated. This is unfortunate, for it is difficult to find a substitute for it. There may, of course, be illegal trusts; but a trust in and by itself is not illegal: when resorted to for a proper purpose, it has been for centuries enforced by courts of justice, and is, in fact, the creature of a court of equity.”

Anti-trust, then, is opposition to monopoly, which is control of a business sector by a single person or interest. In that sense, it has also been defined as a rule intended “to make sure that businesses are competing fairly.”

The interest in trusts coincided with changes in business structure; those trusts so popular toward the end of the 1800s largely have been superseded by other forms of business structure. But “trust” in the older sense was the issue at hand when, in 1890, Senator John Sherman led passage of the federal anti-trust law that still bears his name, and he proclaimed, “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 necessaries of life.” It was intended as a tool for keeping monopolies from controlling the American economy, a (per the Federal Trade Commission) “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.”
The Sherman law, which contained criminal as well as civil components, held some sharp teeth, useful in the hands of regulators willing to employ them. The FTC description of the law says: “The Sherman Act outlaws ‘every contract, combination, or conspiracy in restraint of trade,’ and any ‘monopolization, attempted monopolization, or conspiracy or combination to monopolize.’”

It added, “Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are unreasonable. For instance, in some sense, an agreement between two individuals to form a partnership restrains trade, but it may not do so unreasonably, and so may be lawful under the antitrust laws. On the other hand, certain acts are considered so harmful to competition that they are almost always illegal. These include plain arrangements among competing individuals or businesses to fix prices, divide markets, or rig bids. These acts are per se violations of the Sherman Act; in other words, no defense or justification is allowed.”

The counter-argument from some business advocates is that the law is a restraint on business operations, and that when enforced it can be very costly for important businesses; both assertions are true. The counter to that is that the cost of unregulated monopoly, to consumers, fellow businesses, and the citizenry at large, can be much higher.

Anti-monopoly law was strengthened in 1914 with passage of two major laws in 1914 (the Clayton Anti-Trust Law and the Federal Trade Commission Law, setting up an enforcement agency). And there have been two more, largely strengthening, laws passed since then, Robinson-Patman in 1936 and the Cellar-Kefauver in 1950. That last was the most recent substantial legislative update on the subject.

You may have noticed a little slowdown here on the anti-monopoly front.
That slowdown has coincided with an explosion in the types of reach of business organizations and new varieties of financing and ownership. To say that federal law hasn’t kept up – most especially in the years since the rise of the internet – would be drastically undertelling the story.
That point from the Google definition about “promoting competition in business” ought to mark the law as inherently pro-free market, since the marketplace is supposed to depend and thrive on competition. In the real world, few business people relish competition unless they see a clear path to dominating or eliminating it. In the latter part of the 20th century, “anti-trust” law was steadily redefined from the pro-marketplace measure it was designed to be, to a description of a crippling regulator of business.

Chris Hughes, who co-founded Facebook, has said that anti-trust law should be used to break up that online megalith. In discussing how that law has been used less in recent years: “Starting in the 1970s, a small but dedicated group of economists, lawyers and policymakers sowed the seeds of our cynicism. Over the next 40 years, they financed a network of think tanks, journals, social clubs, academic centers and media outlets to teach an emerging generation that private interests should take precedence over public ones. Their gospel was simple: ‘Free’ markets are dynamic and productive, while government is bureaucratic and ineffective. By the mid-1980s, they had largely managed to relegate energetic antitrust enforcement to the history books. This shift, combined with business-friendly tax and regulatory policy, ushered in a period of mergers and acquisitions that created megacorporations. … The results are a decline in entrepreneurship, stalled productivity growth, and higher prices and fewer choices for consumers.”

It can’t be said that the anti-trust – anti-monopoly, to put it more plainly – laws aren’t used at all. The Trump Administration, for example, did unveil the machinery in throwing a roadblock before the massive AT&T and Time-Warner merger (albeit that the motivations weren’t clearly centered around promoting competition).5 But that and a few other instances in recent decades are anthills compared to the mountainous mergers and combinations of recent generations – most of them excellent news for executives, insiders and some stockholders, and bad news for employees, vendors, vendors and almost everyone else.

Economist and former Clinton Administrator Labor Secretary Robert Reich warned (during the Obama Administration) that the weakness of anti-trust regulation was creating serious damage:

“Wall Street’s five largest banks now account for 44% of America’s banking assets – up from about 25% before the crash of 2008 and 10% in 1990. That means higher fees and interest rates on loans, as well as a greater risk of another “too-big-to-fail” bailout. But politicians don’t dare bust them up because Wall Street pays part of their campaign expenses,” he wrote. “Because U.S. airlines have consolidated into a handful of giant carriers that divide up routes and collude on fares. In 2005 the U.S. had nine major airlines. Now we have just four.”
And so on across the economy.

The implications of severe economic consolidation are much broader than that, and can turn frightening.

In 2018, writer Tim Wu noted, “We must not forget the economic origins of fascism, lest we risk repeating the most calamitous error of the 20th century. Postwar [World War II] observers like Senator Harley M. Kilgore of West Virginia argued that the German economic structure, which was dominated by monopolies and cartels, was essential to Hitler’s consolidation of power. Germany at the time, Mr. Kilgore explained, ‘built up a great series of industrial monopolies in steel, rubber, coal and other materials. The monopolies soon got control of Germany, brought Hitler to power and forced virtually the whole world into war.’ To suggest that any one cause accounted for the rise of fascism goes too far … [but] extreme economic concentration does create conditions ripe for dictatorship.”

Power combines are not an easy thing to stand up to. The last century of American history has been ample demonstration of that.

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