By: Mia Barratt
Edited by: Andrew Bongiovanni
Graphic by: Arsh Naseer
Introduction
As the United States heads towards its 250th year of democracy, government officials and the public alike must consider that the monopolistic problems of its past may be its demise. Since the late 1800s, the United States has repeatedly faced challenges in striking a balance between regulating corporate monopolies’ power and incentivizing economic growth. While there have been attempts at solving this problem over the years, none have withstood political and societal changes. These failures, along with long-term tax cuts and monopoly propaganda, have afforded monopolies excessive power, which they use to thwart the public’s interests. Thus, monopolies pose the largest threat to American democracy in the current era. Monopolies have corrupted outlets for democracy in all branches of the US government in distinct ways. In the legislative branch, monopolies have donated millions to political campaigns, while simultaneously lobbying legislators. For the judicial branch, monopolistic influence comes via lawsuits, judge shopping, and judge buying. Lastly, influence in the executive branch mirrors the legislative branch, exacerbating the damage to American democracy.
History of Monopoly Regulation, Tax Cuts, and Propaganda
Monopolies are among the most consistent challenges to American democracy, prevalent since the late 1800s. During that period, companies such as U.S. Steel, Standard Oil, and the Vanderbilt Railroad Company controlled their prospective markets nearly unopposed.1 From this, the Sherman Anti-Trust Act of 1890 was passed, aimed at preventing further consolidation by these monopolies. Then, in 1914, the Federal Trade Commission Act––which created the FTC––and the Clayton Act passed. With later revisions, these three laws have come to form the core of antitrust law and enforcement in the United States.2,3 However, in 1981, President Ronald Reagan’s administration temporarily reversed antitrust laws, ending in 1998 with the Department of Justice bringing a successful lawsuit, with the outcome ordering Microsoft to be broken up. Despite their breakup of AT&T in 1982, this administration favored monopolies in a way that allowed American corporations global influence and mergers that would not have otherwise occurred.4
Moreover, the Reagan Administration is responsible for imposing long-term tax cuts that permitted corporations to gain excessive amounts of money. Because tax codes have remained relatively consistent for the last three decades, Reagan’s “trickle-down” economic theory continues to advantage corporations with low tax rates.5 Similarly, The Trump Administration’s 2017 Tax Cuts and Jobs Act further decreased the revenue received from corporate taxes from $409 billion in the first quarter of 2017 to $269 billion in the first quarter of 2018, giving monopolies another economic boost.6
In 1972, prior to the Reagan Administration, the Business Roundtable was formed as an organization comprising CEOs looking to cultivate political influence.7 In the following years, monopolies realized that rather than trying to keep government and business separate, it would be more effective to involve themselves in politics and government processes.8 However, these large corporations knew this shift would fuel antitrust sentiment among the public, so they began buying shares of media companies to help them spread misinformation and disinformation about their actions.9 On its own, control of the media allows monopolies to undermine trust in government and democratic processes.10 Paired with their political influence, it permits them to peddle propaganda about themselves to both the public and government officials.
All of this has culminated in the proliferation of modern-day monopolies, like Apple, Meta, and Google among others, with ever fewer alternatives. Furthermore, monopoly propaganda has reframed antitrust pursuits from a battle for democracy into a quarrel over consumer harm, under the notion that the economy is naturally competitive.11 With this change, it has become nearly impossible for the government to regulate monopolies, and exceedingly difficult for the public to see how monopolies threaten U.S. democracy.
Monopoly Influence in the Legislative Branch
The most devastating place where monopolies have corrupted democratic outlets is the legislative branch, as this branch is supposed to be the most responsive to the people and is responsible for proposing legislation. The primary ways that monopolies influence these representatives are campaign donations and lobbying. In return, they typically receive favorable policy and oversight, meaning they face less regulation and fewer consequences for harm they commit.
In the legislative branch, many representatives’ top priority is re-election. As money is integral to this goal, politicians are susceptible to influence by anyone offering funds, enabling corporate monopolies to make large campaign contributions in exchange for legislative action or inaction. This is such a prevalent problem that sites like Open Secrets make it their mission to follow and expose the flow of money in politics.12 While it may appear that only nonprofits, individual corporations, super PACS, and LLCs are funding these campaigns, it is important to know that these subgroups are specifically designed to enable monopolies and anonymous donors to donate tax-exempt money to campaigns.13 This funding serves as a way to influence politicians to advocate, write legislation, and vote in alignment with their interests.
On a more apparent level, monopolies can lobby individual legislators, or large groups of representatives to alter their respective legislative processes. Because information is a vital resource for lawmakers and it is difficult to gather sufficiently granular knowledge to inform legislation, lobbyists strive to fill these gaps by providing specialized information. However, this information is often biased, allowing lobbyists to sway lawmakers’ opinions and policy positions. Further, monopolies can dedicate large amounts of money to lobbying, meaning they can both defend themselves against potential changes in government policy and offensively change policy in a way that benefits them.14 As of 2015, corporations alone spent $2.6 billion annually on lobbying, which is more than the $2 billion spent to fund both the House of Representatives and Senate.15 Furthermore, for every dollar spent on lobbying by labor unions and public-interest organizations combined, large corporations and their associations spend thirty-four dollars.16 Put together, this means that monopolies have far more influence on policies than the public and other organized interests, effectively usurping democratic responsibility to the public.
Monopoly Influence in the Judicial Branch
While monopolistic influence is detrimental in the legislative branch, it is quite harmful in the judiciary too. Despite the judicial branch generally being seen as the least democratic branch, it is still responsible for setting precedents on statutory and constitutional interpretation and making rulings that have national impacts. The chief ways in which monopolies influence judicial processes are lawsuits, judge shopping, and judge buying practices.
Lawsuits are important means for handling specific cases and setting precedents. Because monopolies have teams of lawyers, they can both deflect cases alleging harm and pursue their own claims at the expense of the people. Furthermore, monopolies can create lawsuits that “silence critics, promoting draconian anti-protest laws, and supporting voter suppression efforts.”17 One of the primary ways that this is done is through Strategic Lawsuits Against Public Participation, or SLAPPs, which function to prevent Americans from expressing their democratic right to protest. For example, in 2016, Dakota Access Pipeline filed a SLAPP against protesters to prevent protests from spreading.18 These lawsuits are expensive proceedings, which monopolies can cover the cost of, but the average American often cannot. This means that monopolies win either way; they either drain protesters’ resources or win the lawsuit against them outright.19 This leaves citizens without a way to hold these powerful corporations accountable for their actions, stifling democratic aspirations.
Another common path to manipulating the judicial branch that monopolies take is judge shopping, or the ability for those with power to pick judges sympathetic to their case to get more favorable rulings. While the result of successful judge shopping is often seen as a ruling in favor of the monopoly, it is not necessary. More often, judge shopping results in a lesser penalty for the monopoly or sections of the ruling supporting certain behaviors they want to continue. This practice is very attractive to monopolies because it saves them time and resources that would otherwise be spent lobbying or bribing individual legislators with campaign funding.20 Similarly, it can result in national changes that protect them from certain lawsuits in the future. Even though this practice is technically disallowed, single-judge areas and chief judges can result in cases going to specific judges. Because monopolies often span large areas, they have more flexibility in where to file their cases, meaning they have some control over where they go. An example of this occurred this year when business and banking groups, including the Fort Worth Chamber of Commerce, brought suit in Fort Worth, Texas to block a rule from the Consumer Financial Protection Bureau (CFPB) that would lower credit card late fees.21 While these groups were caught in this case, it can go unnoticed, giving monopolies another way to skirt accountability
When monopolies are forced to face an unfavorable judge, they can bribe their judges instead. While judges can be bought on all levels, recent news about Clarence Thomas taking numerous vacations funded by several executive billionaires shows that corruption continuously happens without public awareness. While much of this gift-giving violates judicial norms, there is no explicit punishment for it at the Supreme Court level, meaning the judicial branch may never be democratically responsive to Americans.22 While lavish gifts do not inherently mean that monopoly executives will reap benefits, it may lead to judges and justices being seen more favorably if their company is sued. Regardless, this influence is valuable, as judges, especially Supreme Court justices, have the authority to set precedents and interpret statutory and constitutional law, which can be done so unrelated rulings might inconspicuously contain interpretations that help these corporations, undermining American democracy without the public’s knowledge.
Monopoly Influence in the Executive Branch
Because the executive branch mirrors the legislative branch in many ways, with elections and the need for campaign funding, monopolistic influence in the executive branch functions the same. In practice, this means that monopolies lobby executive agencies to alter how they enforce laws.23 Similarly, monopolies may contribute to a presidential candidate’s campaign to influence their actions as president.
However, on January 6th, 2021, it was evident that monopolies have the capacity for even more influence in the demise of democracy. The heiress to Publix, which is a grocery quasi-monopoly in Southern Florida, funded at least 5 groups that sponsored the January 6th rally, amounting to over $3 million in donations during the final months of 2020.24,25 While some of those contributions may not have been aimed at funding the insurrection, the money she directed through her nonprofits and company channels allowed her to substantially back what amounted to one of the greatest challenges to American democracy in history.
Conclusion
Overall, this monopolistic threat has deteriorated democratic outlets in all branches of American government, leaving Americans without the responsive government the Constitution promised. While the threat now is graver than before, total monopolistic dominance of the government and society is not inevitable. Much of their power stems from Americans failing to see the threat monopolies pose to representative government. A robust antitrust push could reverse the damage done to democratic outlets, while initiatives to keep money out of politics could restore the functionality of representative democracy in the United States. However, this would need to be prefaced by undermining the monopoly propaganda and long-term tax cuts that proffered monopolies this political influence in the first place. While this is increasingly feasible with recent Federal Trade Commission (FTC) efforts spearheaded by Chairperson Lina Khan to regulate monopolies, there needs to be more public pushback against monopolies to advance these efforts. Moreover, with the current potential for a second presidential term for Donald Trump and his repeated promises to deregulate and decrease taxes for monopolies, the threat of corporate monopolies dwarfing the people’s voice in, and control of, government is a growing reality that if allowed to persist unencumbered will stifle American democracy.
Works Cited
[1] National Archives Foundation. 2022. “Broken Trust.” https://www.archivesfoundation.org/newsletter/broken-trust/.
[2] Federal Trade Commission. 2013. “The Antitrust Laws.” https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/antitrust-laws.
[3] Stanford University. “History of Antitrust Regulation.” https://cs.stanford.edu/people/eroberts/cs181/projects/corporate-monopolies/government_history.html.
[4] Galambos, Louis. 2004. “The Monopoly Enigma, the Reagan Administration’s Antitrust Experiment, and the Global Economy.” Constructing Corporate America. https://academic.oup.com/book/32913/chapter-abstract/276851890?redirectedFrom=fulltext.
[5] Mayberry, Josiah. 2023. “Reagan III: Reagonomics, Imperialism, and the Free Market Fantasy.” The Voyager. https://uwfvoyager.com/3923/opinion/reagan-iii-reaganomics-imperialism-and-the-free-market-fantasy/.
[6] Wikipedia. “Tax Cuts and Jobs Act.” https://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act.
[7] Drutman, Lee. 2015. “How Corporate Lobbyists Conquered American Democracy.” The Atlantic. https://www.theatlantic.com/business/archive/2015/04/how-corporate-lobbyists-conquered-american-democracy/390822/.
[8] Drutman, Lee. 2015. “How Corporate Lobbyists Conquered American Democracy
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[10] Kilbury, Laura, et al. 2023. “These Fossil Fuel Industry Tactics Are Fueling Democratic Backsliding.” https://www.americanprogress.org/article/these-fossil-fuel-industry-tactics-are-fueling-democratic-backsliding/.
[11] Stiglitz, Joseph. 2017. “America Has a Monopoly Problem – and It’s Huge.” Roosevelt Institute. https://rooseveltinstitute.org/2017/10/26/america-has-a-monopoly-problem-and-its-huge/.
[12] Open Secrets. “Our Vision and Mission: Inform, Empower & Advocate.” https://www.opensecrets.org/about.
[13] Open Secrets. “Follow the Shadow of Dark Money.” https://www.opensecrets.org/dark-money/shadow-infographic.
[14] Drutman, Lee. 2015. “How Corporate Lobbyists Conquered American Democracy.”
[15] Drutman, Lee. 2015.
[16] Drutman, Lee. 2015.
[17] Kilbury, Laura, et al. 2023. ” Fossil Fuel Industry Fueling Democratic Backsliding.”
[18] Kilbury, Laura, et al. 2023.
[19] Reporters Committee for Freedom of the Press. “Understanding Anti-SLAPP Laws.” https://www.rcfp.org/resources/anti-slapp-laws/.
[20] Wheeler, Russell. 2024. “Effort to Curb Judge-Shopping at the Federal Courts Explained.” Brookings. https://www.brookings.edu/articles/effort-to-curb-judge-shopping-at-the-federal-courts-explained/.
[21] Godoy, Jody. 2024. “US Regulator Says Trade Groups Judge-Shopped for Credit Fee Lawsuit.” Reuters. https://www.reuters.com/legal/us-regulator-says-trade-groups-judge-shopped-credit-fee-lawsuit-2024-03-13/.
[22] Murphy, Brett, and Alex Mierjeski. 2023. “Clarence Thomas’ 38 Vacations: The Other Billionaires Who Have Treated the Supreme Court Justice to Luxury Travel.” ProPublica. https://www.propublica.org/article/clarence-thomas-other-billionaires-sokol-huizenga-novelly-supreme-court.
[23] Congressional Research Service. 2011. “Lobbying the Executive Branch: Current Practices and Options for Change.”
[24] Ladle, Joshua. 2019. “The Great Grocery Monopoly in South Florida.” LinkedIn. https://www.linkedin.com/pulse/great-grocery-monopoly-south-florida-joshua-ladle/.
[25] Massoglia, Anna. 2023. “Tax Records Reveal More Contributions from Publix Heiress to ‘Dark Money’ Groups Sponsoring Jan. 6 Rally.” Open Secrets. https://www.opensecrets.org/news/2023/06/tax-records-reveal-more-contributions-from-publix-heiress-to-dark-money-groups-sponsoring-jan-6-rally/.
