Several Presidential candidates, including Muskie, Lindsay, McGovern and McCloskey, are about to take positions on the issues of concentrated power, secrecy and monopolistic practices of giant corporations. Injecting the matter monopolies and giantism into an election campaign is something of a revival. virtually ignored for three decades, it draws on the historic aversion of many to the “trusts” that erupted on the national political stage with the populist-progressive movement in the early years of this century.
Why, in an era of skyrocketing campaign costs, would any politician believe that the reform of corporate power is a subject sufficiently compelling to risk both withdrawal of business campaign contributions and the active opposition of industry? The example of Senator Harris, who tried this theme last fall and went broke brief run for the Presidency, should tend to dissuade other hopefuls. Harris recalled the disgruntled words of a wealthy businessman supporter: “Fred,” he said ‘can’t you stick to the dope traffic and safe subjects like that?” Harris and some other politicians are convinced that the issue is important and that there is an emerging populist revival of concern about the power of the corporate state in America.
In the first place, such events as the bankruptcy of the Penn Central, the nation’s biggest railroad, and the near collapse of Lockheed, the aerospace giant, have had a profound impact on liberal and conservative politicians alike. Both companies had to be rescued by government loans or guarantees; both reflected mismanagement and a secrecy that precluded early detection or public accountability; and one, Penn Central, was replete with managerial looting and serious breaches of responsibility to share holders and passengers alike. The myth that connected bigness with efficiency and stability was severely shattered.
Furthermore, there is a movement spreading out of the farm belt made up of family farmers fighting for survival against the conglomerates which are buying up huge hunks of land and swallowing the family farm in their integrated agribusiness operations. Approximately 2,000 farms are going out of business in this country every week. The National Farmers Organization, the fastest growing and most militant opponent of agribusiness, has as its battle cry: “Pull together men of the soil, so that farmholders, not shareholders, reap the benefits of your toil.”
Moreover, there is now a remarkably broad agreement among economists and lawyers specializing in antitrust studies that legal action must be taken to undo economic concentration. Without such action, it is feared that what is left of the benefits of competitive enterprise will go the way of the dodo. The last two Presidential Task Forces, representing liberal and conservative schools of thought, analyzed the problem for Presidents Johnson and Nixon. Both Task Forces repeatedly urged tougher enforcement to stop the monopoly of many industries by a few firms. The Johnson Task Force went so far as to urge legislation that would divide into more competitive firms any industry in which four or fewer companies held 70 percent or more of sales.
Since 1965, eleven successive reviewers in the Justice Department’s antitrust division have recommended legal action to break up or divest the General Motors complex into various competitive units. General Motors has been in violation of the antitrust laws for many years. According to a former Presidential assistant, Lyndon Johnson, if he had run for a full second term, was prepared to propose a deconcentration bill to the Congress.
Increasing public interest in big business abuses can be seen in the growth of the consumer movement, in such best-selling popular books as America, Inc., and The Rich and The Super Rich, and in the burgeoning resentment of many Americans over the invasion of privacy by the computers of big business firms. A 1970 survey by the Opinion Research Corporation found that 65 percent of the public (up from 60 percent in 1967) thinks that “in many of our largest industries, one or two companies have too much control of the industry,” while 45 percent of the public (up from 36 percent in 1967) thinks that “for the good of the country many of our largest companies ought to be broken up into small companies.”
Last month the Federal Trade Commission, in its strongest antitrust move in years, filed suit against the big four ready-to-eat cereal firms who control 90 percent of the market. Senator Philip Hart, Chairman of the Senate Antitrust Subcommittee, is soon expected to submit a major deconcentration bill. For years, his subcommittee has been holding investigative hearings, documenting in detail the real costs to Americans of the widespread practices of price-fixing, tying arrangements, and the freezing out of superior innovations, as well as other collusive behavior on the part of conglomerates involving drugs, bread, steel, auto parts and repair, medical laboratories, and petroleum — to name only a few. Such anti-competitive enterprise by supposedly competing businesses devalues the consumer’s income and the general standard of living. A secret staff report of the Federal Trade Commission estimates that “if highly concentrated industries were deconcentrated to the point where the four largest firms control 40 percent or less of an industry’s sales, prices would fall by 25 percent or more.”
It is on the basis of such an abundance of documentation that these Presidential candidates can afford to reopen the old political debate over monopoly and economic concentration. If they succeed, the virtues of competition — to consumers, to innovators, to small businesses encouraged to challenge the giants — will be given more realistic attention than they have for many years under our little-used antitrust laws.