Thom Hartmann The Hidden History of Monopolies

Broadcast 8/30/2020 at 8:53 AM EDT (19 Listens, 16 Downloads, 2227 Itunes)
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Thom's most recent book is The Hidden History of Monopolies: How Big Business Destroyed the American Dream

We discuss how monopolies are bad for America, for the middle class and humanity. The automated transcript is at the bottom here.

Thom Hartmann is a progressive national and internationally syndicated talk show host, described by Talkers magazine as America's most important progressive host and one of the top ten radio shows in the country every year for over a decade. He is also a New York Times bestselling author of 26 books.

Website: thomHartmann.com

His most recent book is The Hidden History of Monopolies: How Big Business Destroyed the American Dream

Define monopoly and how you compare it to cancer

And what is the Sherman anti-trust act of 1890 and what happened to it?

One view is the economy has to serve the people
Or
The people serve the controllers of the economy

We are at the cancer stage of capitalism


Monopoly's only competitor is the Federal government

Covid 19 and monopolies?

Reagan brought celebration of mergers and acquisitions

History of Monopolies
History of resistance

You say "The whole idea of government grew out of ancient families tribes and clans, who worked together to protect the youngest, the oldest and weakest members of their hunter-gatherer communities.

Monopolists needed to persuade people that government was the enemy.

Patents and copyrights as monopolies

What role have NJ and Delaware played in enabling the, as Matt Taibi might describe, the giant squid nature of corporations?

How is the crash of 29 similar to the Trump crash of 2020 for big vs small companies?
And until the 50's it was called "The Republican Great Depression?"


Roosevelt and fascism

Food monopolies
What happened to the Middle Class?

Reagan lowered taxesended up stealing increased productivity benefits from workers.

Borking of America40 years agohe opposed anti-trust laws and wiped out bottom-up economics based on the idea that bigger was better for consumers. But he didn't include externalities. He never considered"

Economic Immune System

European Maximum wage laws

Corporations could be positive positive community touchstones and stakeholders

How Monopolists took over government
SCOTUS judge Lewis Powell's vision

Natural monopolies

Thing preventing the US from recovering from privatization

Starving the beastReagan and Trumpgrover norquist
Social Secuirty, USPS, Internal Revenue, EPA, USDA

Talk about the commons.

Solutions:
Enforce laws, change how Supreme court translates laws

Democracy's immune systemmiddle class
Replace Bork's consumer welfare framework
Break up Internet giants
Bring back corporate death penalty
Ban preemption laws written by corporations
Competition

Monopolies are bad for business?

Where do Libertarians and Republicans fit into the story of monopolies? And Democrats?
And what's the history of Libertarianism?

Automated transcript: sorry for the formatting, it's the way it comes from Youtube.

my guest for this show, a

repeat guest and a dear friend

is tom hartman he's a progressive

national and internationally syndicated

talk show host

described by talkers magazine as

america's most important progressive host

and one of the top 10 radio shows in the

country every year for over a decade

he's also a new york times best-selling

author of over 26 books that have come

out in multiple languages his

website is tomhartman.com that's

t-h-o-m-h-a-r-t-m-a-n-n.com

great to have you back thanks although

however you spell my website it'll get

you there we have all four misspellings

i forgot about that yeah thanks for

having me rob it's great to be here with

you on your podcast

so we're here today to talk about your

new book which is part of a hidden

history

series this one is a hidden history of

monopolies how big business destroyed

the american dream

right it's a it's a great book it's it's

it's it's not a big book

but it's just as every book you write it

is so

packed with history and fact and

updated numbers it's just

you're you're an amazing writer you

really are and this is just another one

of the great books that you do and i

highly recommend it

with a forward by ralph nader by the way

he his forward is just great

yeah yes that's right um

so what's a monopoly let's start off

with the definition of a monopoly

and throw in how you compare it to

cancer

well cancer is where uh

one individual cell in the body and it

always starts with one

cell decides that it is going

to be the cell it is going to take all

the nutrients it's going to multiply

forever

and uh and suck in all the all the

rest of the nutrients in the body it

they do cancers

cancerous tumors develop their own blood

system their own vascular network

they they basically drain the body of

nutrients and this is why

typically when people have cancer if

they live long enough to to wither up

and die that's what happens they wither

up and die

they get you know they lose weight until

they become

in many cases skeletal and

it's because the cancer is taking all

the nutrients monopolies do the same

thing

and i think cancer is a very good

analogy for monopoly

monopoly is where one company or in the

case of what's referred to as

oligopoly more broadly i use the term

monopoly to describe these as well in

the book although i make that

distinction

is where a single company or a small

group of companies

dominate an industry dominate a market

niche

uh whether it's retail whether it's

restaurants whether it's hotels whether

it's movie theaters whether it's

airlines

whether it's banks uh you know whether

it's fast food where you have to pick

your

media pick your uh market sector

uh pretty much every market sector in

the united states i mean right down to

things like

like uh crafts and you know arts and

crafts stuff

uh pretty much every consequential

market sector in the united states is

now dominated by between three and five

companies

in a monopolistic fashion and what this

does

is um it it eliminates competition i

mean it's the whole point of monopoly in

the first place

uh and by reducing competition you

reduce

things like market um uh

i was gonna say versatility what

innovation you reduce innovation you

reduce inventiveness you know companies

are not as nimble on their feet they're

not

looking for ways to constantly you know

compete against the other guy

and with a better and new and improved

product

so in terms of the product itself uh it

suffers

as a result of monopoly anybody who's

been on an airplane in the last 15 years

knows what i'm talking about

it also hurts the employees employees

lose their bargaining power when they

can't take the expertise in an

industry that they have developed and go

to another player in that industry

very easily it also

hurts customers uh i guess i've

kind of defined that by you know how in

fact

uh in the early part of the book i think

it's in the preface or the first chapter

i talk about how uh there's pretty good

actually very good research showing

from economic policy institute and other

groups showing that the average american

family

pays every year about five thousand

dollars per family

per year in basically a monopoly tax in

higher profits

excuse me higher prices uh for all kinds

of things internet service for example

uh one gig up one gig down internet

service

which is ten times faster than most

americans even have access to

is around 25 bucks a month in most

european countries

here you get you know 50 mips

50 you know 0.5 0.05 gigs

for 100 80 70

it's uh same thing with cell phone

service in in uh most european countries

cell phone service 20 25 bucks a month

in fact very often it's bundled with

your internet service the whole thing is

less than 35

a month and in some cases uh in france

for example that includes television

and it's because they have over a

thousand different internet service

providers in france

and and and you know several dozen phone

company providers so they actually

have laws that prevent monopolies that's

right

the the uh the laws that america had i

mean

we pioneered this in the 1880s with the

sherman anti-trust act

but the laws that we put into place and

the laws that were vigorously enforced

and expanded on and amplified by

you know in particular teddy roosevelt

william howard taft administrations but

numerous administrations over the years

including the eisenhower administration

those rules were adopted

enthusiastically by europe

and um and we backslid on that which is

i think one of the big

ahas of the book but just to finish what

monopoly is and how it impacts people

um basically a a company a corporation

has

a group of constituencies there are the

customers obviously uh there are the

employees

uh another constituency that the

corporation should owe some loyalty to

it should respond to

there's the community in which the

corporation operates whether that's a

local community for a local business or

whether it's the nat

you know the nation as a whole um

there's the institution of the

corporation itself

and and then there's the stockholders

well

in the 1960s early 70s a guy by the name

of robert bork

um who came out of the chicago school

you know

a student of milton uh milton friedman's

robert bork came up with this idea that

all of these different constituencies uh

with one single exception are

irrelevant that corporations should no

longer

have to or be judged by

uh those people who are deciding whether

or not they're a monopoly i think before

we get to that

i think you should tell us what the

sherman antitrust act of 1890 was

because

work is responding to that right right

in part yeah and

and and several other laws that amended

it and amplified it and expanded it

um the sherman antitrust act basically

said that any

uh company or collection of companies

that behave in a monopolistic fashion

uh in order to limit competition in the

marketplace

have committed a crime and and the

companies and their executives can be

held criminally liable for that

yeah you know and also of course there's

civil penalties

so it outlawed this and the ultimate

enforcement of that is up to the supreme

court and that's

you know the borg story and the right so

go ahead now now

my understanding reading what you said

about work in the book

is that bork basically argued that

the whole idea is make things the best

for consumers as possible

so if a monopoly makes things cheaper

for consumers

that's better i would agree except i

wouldn't use the word best because

as i pointed out monopolies tend to

stifle innovation

but they can keep prices low right yeah

the prices

price right and so go ahead just my take

on it you know because you know

i call this the bottom up show is that

what bork left out

was all of the

externalities all of the things that

are good that come from small businesses

that don't get into the accounting of

people like milton friedman and his

model

of of economics and and so

burke you know everybody talks about him

as being brilliant

but you know you talk in the book about

how

you know he probably didn't even

research what the the actual writers

of the german antitrust act intended

and then what he did he lied about it

and then he left out all the

externalities

as they're not important yeah i don't

think he was brilliant i think he was a

grifter uh he was a con man

um you know acting on behalf of large

corporations

you know this this is all kind of

parallel to the uh to the power memo

uh this all came out of that same

ferment in the late sixties and early

seventies

of you know it's time for big business

to stand up on its

back legs and and you know take over the

world

and yeah now is the pet was the pet was

the pad mammal memo the project for a

new american century

no no the palmetto came on 1971 lewis

powell was a lawyer for the tobacco

industry in virginia

and he wrote this memos in 1971

it was considered very bad form for

businesses to be political and this was

in part because

fdr had had these major battles in the

30s with big business and he had just

beaten them to a pulp and there were

laws that said

if businesses got involved in politics

they they were committing a crime well

there were a lot it wasn't so much they

were committing a crime as

that their political activity was not

tax deductible if they tried to conceal

it

on their balance sheets then it was a

crime

um and there were some things that

corporations couldn't do

uh just flat out um and in some states

corporate political activity had been

limited but almost all of those limits

were blown apart

in the 1890s but the

uh but the bottom line is that uh you

know

boric was bork was dancing to the tune

of giant corporations who wanted to get

rid of

metal some competition it's kind of the

bottom line

i i just remember when he was uh up for

the supreme court and people were saying

what a travesty it was such a brilliant

man

was not going to get on the court yeah

no he was a racist he was a misogynist

uh he hated he was a homophobe he hated

gay people

um robert bork was a sick toxic

twisted little man and a forerunner of

the typical

member of congress for republicans

yeah yeah he was jim jordan before jim

jordan was jim jordan

sure so

so work change things yeah bork made

this argument and he wrote a

good-sized book i i should i've got it

in my library here someplace i don't

know exactly where i should get it out

so i can wave it around

um but he wrote this book in

as i recall the early 70s in which he

argued

rather forcefully and with much pomp and

circumstance and

any and throughout the book he's

constantly referring to himself

as being brilliant as being innovative

as being inside

i mean the book is a pathetic read but

the essence of the book was

we don't as a country we don't need to

concern ourselves with a corporate

monopoly

with the impact of corporate monopolies

or monopolistic behavior

on communities on employees

on uh customers outside of prices

um on the institution the corporation

itself if corporations end up getting

bought out by other corporations or even

being dismantled and sold off that's all

good

um the only thing that matters is how

much consumers are paying for product

consumer pricing and you know that's

uh that was his pitch it got picked up

and adopted by the reagan administration

um and this and then

and then you know over the course of a

decade and a half or so

the supreme court picked it up i think

the gte sylvania case was the first one

where they really really went

uh all bork and

uh the supreme court uh has basically

rewritten the rules they've

reinterpreted the sherman act and

several others that followed it

and as a result of that um monopolistic

behavior is not only tolerated

in the united states it was celebrated

by ronald reagan you and you you and i

are both old enough to remember that

you know the hot thing starting in a big

way in front 83

was uh m a you know the masters of the

universe were these

m a artists they call themselves people

like michael milken mergers and

acquisitions

and what they did was they took you know

a dozen small companies and jam or

medium-sized companies jammed them all

together one giant corporation

and eliminated competition and also

eliminated redundancies you didn't have

you know a dozen different accounting

departments a dozen different sales

departments

and as a consequence of that you could

cut the number of employees

radically to produce the same product

because now you dominate the marketplace

you don't have to

compete with other companies and so you

know it led to

massive layoffs i mean this was one of

the major sources of layoffs

in the 80s 90s in the first decade of

the 2000s

was um was the this uh

increasing monopolization of every

single one of our industries

now and then you talked about powell now

what did he do he wrote this

letter yeah what paul he he wrote as a

letter to eugene cinder

who was one of his neighbors in virginia

and was the president

of the um uh

what do you call the business

association chamber of commerce

yeah the chamber the u.s chamber of

commerce thank you very much at least to

get our insurance through when i was in

vermont

um uh so eugene cinder was the head of

the of the us chamber of commerce and

and um and powell wrote him this

confidential memo it's got confidential

all over it

and uh in that memo he said basically uh

businesses in america since the 30s have

been afraid to

express political you know or even

engage in politics have been afraid to

to support politicians have been afraid

to uh

you know get involved in all this and

it's time for corporations basically to

rise up and take over this country

it's time for uh and and and not just

corporations

you know the the people the corporations

have made rich

we are being we are the downtrodden and

the fact the matter is 1971 when he

wrote this

that's the richest five percent of

americans their income was going up

but it was not going up as rapidly as

the bottom eighty percent of americans

so you know bork was like you know we

got to change this and he laid out a

prescription for this he said you know

we need to seize control of our schools

we need to be writing the textbooks for

our

you know primary and secondary schools

now we need to get control of our

colleges we need wealthy people to endow

departments like political science

departments and economics departments

so that they can control the content we

need to build think tanks so that we can

control the dialogue and debate in the

united states around

issues of consequence to business into

billionaires

um we need to seize control of the media

and develop our own media

um we need you know and he just went

through all of these stuff you know we

we need to seize control of politics we

need to

you know basically target a political

party and take it over if not both

parties

and um it was a wake-up call and

and is specific you know it's ironic

because ralph nader wrote the forward of

this book

and specifically in the palomal

lewis powell says ralph nader who three

years earlier four years earlier had

written unsafe at any speed and taken on

the auto

industry he said ralph nader is trying

to destroy the american way of life

along with rachel carlson who was who

had started the uh the

environmental the environmental movement

yeah and

and uh powell named them in the memo

and said you know these guys are going

to take us down the road to soviet-style

marxism if we don't rise up and push

back

and that led to within three or four

years

the creation of the heritage foundation

the cato institute

uh the uh the uh competitive uh

enterprise institute um the uh i believe

that the iron ran foundation had already

been started at that point

um but but all of these you know giant

right wing think tanks or most of them

many of them

um alec the american legislative

exchange council the

the all of these came out of the powwow

memo and

the other thing that came out of the

paul mill was

uh he was very influential on the

supreme you know to the supreme court

his writings were taken very seriously

by conservative

um scholars and a lot of powell's

writings and and works writings for that

matter

i

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