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Time for a Conservative Anti-Monopoly Movement

Amazon, Facebook and Google: The new robber barons?
jeff bezos

Earlier this month Amazon announced its plans to establish a second headquarters in North America. Rather than simply reveal which city would become its second home, the Seattle-based tech company opted instead to open a bidding war. In an eight page document published on its website, Amazon outlined the criteria for prospective suitors, and invited economic developers to submit proposals advocating for why their city or region should be the host of the new location.   

Its potential arrival comes with the claim that the company will invest more than $5 billion in construction and generate up to 50,000 “high paying jobs.” Mayors and governors, hard at work crafting their bids, are no doubt salivating at the mere thought of such economic activity. Journalists and editorial teams in eligible metropolises are also playing their parts, as newspapers have published a series of articles and editorials making the case for why their city should be declared the winner.

Last Tuesday Bloomberg reported that Boston was the early frontrunner, sending a wave of panic across the continent. Much to the relief of the other contenders, Amazon quickly discredited the report as misinformation, announcing in a series of tweets on Wednesday that it is “energized by the response from cities across [North America]” and that, contrary to the rumors, there are currently no front-runners on their “equal playing field.”

That Amazon is “energized” should come as no surprise. Most companies would also be energized by the taxpayer-funded windfall that is likely coming its way. Reporters speculate that the winner of the sweepstakes—in no small part to the bidding war format—could be forced to cough up hundreds of millions of dollars in state and local subsidies for the privilege of hosting Amazon’s expansion.

Amazon has long been the beneficiary of such subsidies, emerging in recent years as a formidable opponent to Walmart as the top recipient of corporate welfare. According to Good Jobs First, a Washington, D.C. organization dedicated to corporate and government accountability, Amazon has received more than $1 billion in local and state subsidies since 2000. With a business plan dedicated to amassing long-term market share in lieu of short-term profits, Amazon, under the leadership of its founder and chief executive, Jeff Bezos, operates on razor-thin profit margins in most industries, while actually operating at a loss in others. As such, these state and local subsidies have played an instrumental role in Amazon’s growth.

Advocates of free market enterprise should be irate over the company’s crony capitalist practices and the cities and states that enable it. But more so than simply ruffling the feathers of the libertarian-minded, Amazon’s shameless solicitation for subsidies capped off a series of summer skirmishes in the Democratic left’s emerging war against monopolies.

Earlier this summer when Amazon announced its $13.7 billion purchase of Whole Foods, antitrust advocates called upon the Department of Justice and the Federal Trade Commission’s Antitrust Division to block the sale and update the United States government’s legal definition of monopoly. Although the acquisition—which was approved in August—only gives Amazon a 1.5 percent market share in the grocery industry, it more importantly provides the tech giant with access to more than 450 brick-and-mortar Whole Foods locations. Critics say that these physical locations will prove invaluable to its long term plan of economic dominance, and that it is but the latest advance in the company’s unprecedented control of the economy’s underlying infrastructure.

Google also found itself in the crosshairs of the left’s anti-monopoly faction when, in late June, the European Union imposed a $2.7 billion fine against the tech company for anti-competitive search engine manipulation in violation of its antitrust laws. The Open Markets Program of the New America Foundation subsequently published a press release applauding the EU’s decision. Two months later, the Open Markets Program was axed. The former program director Barry Lynn claims that his employers caved to pressure from a corporation that has donated more than $21 million to the New America Foundation. The fallout emboldened journalists to share their experiences of being silenced by the tech giant, and underscores the influence Google exerts over think tanks and academics.

Most recently, Facebook faced criticism after it was discovered that a Russian company with ties to the Kremlin purchased $100,000 in ads from the social media company in an effort to influence the 2016 presidential election. Facebook, as a result, has become the latest subject of interest in Robert Mueller’s special investigation into Russian interference in last fall’s election. But regardless of whether the ads influenced the outcome, the report elicited demands for transparency and oversight in a digital ad marketplace that Facebook, along with Google, dominates. By using highly sophisticated algorithms, Facebook and Google receive more than 60 percent of all digital ad revenue, threatening the financial solvency of publishers and creating a host of economic incentives that pollute editorial autonomy.  

While the Democratic left—in an effort to rejuvenate its populist soul—has been at the front lines in the war against these modern-day robber barons, Stacy Mitchell, co-director of the Institute of Local Self-Reliance, suggests that opposition to corporate consolidation need not be a partisan issue. In a piece published in The Atlantic, Mitchell traces the bipartisan history of anti-monopoly sentiment in American politics. She writes:

If “monopoly” sounds like a word from another era, that’s because, until recently, it was. Throughout the middle of the 20th century, the term was frequently used in newspaper headlines, campaign speeches, and State of the Union addresses delivered by Republican and Democratic presidents alike. Breaking up too-powerful companies was a bipartisan goal and on the minds of many voters. But, starting in the 1970s, the word retreated from the public consciousness. Not coincidentally, at the same time, the enforcement of anti-monopoly policy grew increasingly toothless.

Although the modern Republican Party stands accused of cozying up with corporate interests, the history of conservative thought has a rich intellectual tradition of being skeptical—if not hostile—towards economic consolidation. For conservatives and libertarians wedded to the tenets of free market orthodoxy—or for Democrats dependent on campaign contributions from a donor class of Silicon Valley tycoons—redefining the legal definition of monopoly and rekindling a bipartisan interest in antitrust enforcement are likely non-starters.

But for conservatives willing to break from the principles of free market fundamentalism, the papal encyclicals of the Roman Catholic Church, the distributist thought of Hilaire Belloc and G.K. Chesterton, the social criticism of Christopher Lasch, and the observations of agrarian essayist Wendell Berry provide an intellectual framework from which conservatives can critique and combat concentrated economic power. With a respect for robust and resilient localities and a keen understanding of the moral dangers posed by an economy perpetuated by consumerism and convenience, these writers appeal to the moral imaginations of the reader, issuing warnings about the detrimental effects that economic consolidation has on the person, the family, the community, and society at large.

The events of this summer underscore the immense political power wielded by our economy’s corporate giants. To those who recognize the dangers posed by our age of consolidation, the skirmishes from this summer could serve as a rallying cry in a bipartisan war for independence from our corporate crown.  

Daniel Kishi is associate editor of The American Conservative. Follow him on Twitter: @DanielMKishi