In the United States, certain companies reign supreme: they are big, they are bold, and they make billions of dollars annually. Income inequality is at an all-time high, and the middle class is slipping away. This should sound familiar, but I’m not referring to 2018 (or necessarily to Silicon Valley giants alone). If history repeats itself, what feels so familiar in 2018 is also what the world saw in the latter third of the 19th century during the Gilded Age, the era of Rockefeller and Carnegie and JP Morgan. On February 20, 2018, Columbia professor, writer, and policy advocate Tim Wu delivered the Wesson Lecture on Problems in Democracy, and asked whether we are facing similar problems as that pre-trustbusting era and if so, whether we again need champions of antitrust like Louis Brandeis to correct the course. What can we learn from the past as we continue to shape our democracy for the future?
Today, like during the Gilded Age, we’re facing unprecedented industrial concentration. Income inequality and outsized political influence for these concentrated industries are only two repercussions of such industrial concentration; the middle class loses out because of both. A hundred years ago, the solution was to legislate and enforce antitrust laws, and Supreme Court justice Louis Brandeis was one of its advocates. For Brandeis, freedom was more multi-dimensional than we perceive it today, and according to Wu, included freedom from an oppressive economic order. Freedom was more than the right to exist—it was also about the right to thrive. Brandeis worried that the labor situation at the time would lead to slavery-like conditions, and was concerned that the bigger a company got as a result of acquisitions, the bigger its influence might become. Suffice to say, if Brandeis were alive in a time when Facebook now owns Instagram—once a competitor—and WhatsApp—once a competitor, and Google is under scrutiny for quashing competition, he might be sounding the alarm bells too.
But what about all that money these companies and their founders pour into the country to effect positive change? This question arose more than once in the 45-minute Q&A that followed Wu’s lecture. After all, Andrew Carnegie was a noted philanthropist for everything from libraries to education to the performing arts; the Bill and Melinda Gates Foundation has helped solve issues of global public health and has donated billions of dollars to education. The Chan Zuckerberg Initiative, noted one audience member, is working to address issues of justice and opportunity like affordable housing, a crisis in the Bay Area (though I think it’s notable that CZI is an LLC, not a private 501c3 foundation like the previously mentioned philanthropies).
Wu agreed that these were good steps. “You want people of virtue in positions of power so they shouldn’t be punished when they do good things,” he said. “But the discussion of economic justice has fallen off the radar.” He also reminded the audience that “it’s easy to adopt positions that don’t affect your bottom line. This is a democracy,” he said. “It should be about people.” As for Brandeis, well, dual morality was not his bag. Wu told the audience that Brandeis thought business should operate as a profession called to higher ethical duties—excellence should be part of the package, not an afterthought, and not what someone did only in their personal life while trampling everyone else in their business life.
So where do these questions leave us? Wu believes we need to get back to breakups. What ended the Gilded Age and transformed much of the American economy was antitrust laws. Now there are few, if any, consequences for mergers that eliminate competition (Facebook’s acquisition of Instagram, for one), though tech is not the only industry that has monopolies and oligarchies we need to fight. We have to bring these questions of competition and economic inequality to the fore, Wu believes, otherwise we run the risk of losing important liberties in our democracy.
SARA BUTTON is a writer and editor. She lives in Menlo Park.