Let's Vigorously Enforce the Anti-Trust Laws!

By Raanan Geberer Brooklyn Daily Eagle Oct. 18, 2011 BROOKLYN — Despite some of the rhetoric one hears, it’s not necessary to totally overthrow the status quo to effect some of the changes the “Occupy Wall Street” movement wants. One good step in the right direction would be to vigorously enforce the anti-trust laws. Anti-trust legislation came into being in the 1890s after the efforts of magnates like John D. Rockefeller of Standard Oil to crush competition, often by extra-legal means like burning down competitors’ oil wells, and to establish monopolies or near-monopolies. The net result was that economic power was concentrated in an extremely small number of companies — just like today. Often, the public was forced to endure high prices for commodities because there were few other places to go. During that decade and up until the beginning of World War I, the government, under leaders like Republican President Theodore Roosevelt, vigorously initiated one action after another against such giant corporations as Standard Oil, J.P. Morgan’s National Security Company and James Duke’s tobacco trust. Afterward, especially during the prosperity of the 1950s and ‘60s and after the Reagan “revolution,” anti-trust legislation took a back seat. Conservative economists like Alan Greenspan and Milton Friedman argued that anti-trust legislation was harmful to business because it stifled potential innovations and improvements. The last major anti-trust prosecution, that of Microsoft, was defeated on technicalities. But the problems that led to Teddy Roosevelt’s vigorous prosecution of the entities he called trusts still remain. Free competition still exists at the Main Street, mom-and-pop level. For example, if a bakery store exists in a small town like New Paltz, and another one opens three blocks away, the two will compete honestly. But at the higher levels of society, it’s a different story. For example, how many people know that food companies often actually pay for shelf space in supermarkets? (And I know this because I once worked for a supermarket trade publication.) Thus, the public will never know many products that it could come to embrace because the smaller companies that produce them won’t have the ability to pay that the food giants do. Also, there are many allegations, such as those from the New America Foundation, that Walmart, the nation’s largest retail chain, often makes its suppliers suffer by insisting that its suppliers accept low prices. When Walmart (and for all I know, some other giant retail chains as well) demands this, the supplier has to accept these prices because the chain buys such a large amount of its products. This can then lead to layoffs and plant closings because the supplier has a harder time staying in business. Does trust-busting actually deprive the public of innovative products? I say it’s the opposite. Let’s look at the Tucker car. The Tucker car, which came on the market briefly in 1948, was one of the most innovative vehicles ever produced. But after pressure from the Big Three (according to Jeff Bridges’ Tucker: The Man and His Dream), bought-off officials from Michigan began a regulatory campaign against the small company. Eventually, Tucker was exonarated, but by that time the company was out of business. Also, look at the credit card industry. Credit cards are known for their high interest rates. It would make sense that at least one large company, in order to compete, would lower its interest rates substantially. Why hasn’t this happened? Sounds mighty suspicious to me! Let’s have a new Teddy Roosevelt and a new round of trust-busting!