BOOK REPORT: GOLIATH BY MATT STOLLER

GOLIATH: THE 100-YEAR WAR BETWEEN MONOPOLY POWER AND DEMOCRACY

I thought I would do a quick book report on Matt Stoller’s excellent history of monopoly capitalism in America over the last century. He makes what could be rather dry reading into a compelling narrative that weaves the politics of the early twentieth century with the major events of world wars, the Great Depression, the Baby Boomer generation, Reganomics, the Gulf Wars, presidencies of Bushes I &II, Bill Clinton, Obama and Trump. He brings to our attention the work of House of Representative Wright Patman who was first elected to congress in 1928. Matt outlines the politics and policies of previous administrations, as well as the rise of a business culture that promoted a rapacious form of capitalism which allowed for the creation of great corporate and financial empires whose sway over the production and sale of goods and services came with few controls over their growth as monopolistic entities. He gives fascinating biographies of such ‘titans of industry’ (aka “robber barons”), as John D. Rockefeller, J.P. Morgan and during the 1920s, Andrew Mellon in particular, whose aluminum monopoly (through Alcoa) controlled virtually every aspect of aluminum manufacturing in the country (aluminum was the “It" girl of metals, the new wonder product of modern American manufacturing and a vital component in everything from bombers to washing-machines.

Matt describes how Franklin Roosevelt came to power in the early 1930s, during the turmoil caused by the 1929 Stock Market crash and the growing Depression that afflicted much of the modern world, which in turn gave rise to dangerous political movements. Roosevelt's New Deal policies over his time in power did much to correct and rein in corporate rapaciousness. For example the famous Glass-Steagall Act of 1933 prevented banks from operating as both traditional banks and investment houses. The gradual erosion—and eventual evisceration of this financial “firewall”, during the Clinton presidency decades later—many cite as a major contributor to the “Great Recession” of 2007-8 where Americans lost an amount estimated in the trillions of dollars of their earned wealth, along with a massive wave of home foreclosures. Matt describes what was called “Mellonism”, named after the early Twentieth Century industrial magnate, and how Mellon strove to dominate not only the aluminum market but finance and banking as well. Mellon became Secretary of the Treasury during the 1920s and used his position to promote the growth of his own monopoly position and that of his fellow elites. Donald Trump is a piker compared to this billionaire grifter!

Wright Patman 1893-1976

As the title suggests, monopoly capitalism is the Goliath in the story while ‘David’ is portrayed by a House of Representative Texas politician named Wright Patman who waged a forty year struggle in congress against the power of giant corporations and their tendency to develop monopolistic control over their industries and markets. Patman, a Democratic representative on the important Banking and Currency Committee after 1963, brought in laws and amendments that sought to temper and modify corporate power, and arguably added to the maintenance of New Deal policies for several decades going forward.

One section I found particularly interesting is Matt’s description of the post-Vietnam induction into the Congress of the so-called “Watergate Babies”—a Democratic infusion of young, inexperienced House and Senate politicians who were determined to do things differently and make changes to the economy of the early 1970s which was tanking, and to change the political business-as-usual they saw as responsible for the war in Indo-China. As Stoller lays out his story, these idealistic new congressmen and congresswomen came with good intentions but were derailed in the decades ahead by the growth of a new business ethos that we now call “neo-liberalism”. Stoller outlines the growth of various think-tanks and the work by academics who promoted a form of capitalism that would gradually erode the checks and balances first established during the Roosevelt New Deal. Many of this new cohort of politicians ‘drank the neoliberal Kool-Aid’, so-to-speak, along with much of the media and the general public. Reaganomics was an outgrowth of this philosophy. "Morning in America", the Republican  president's famous slogan, indeed came, but it came mostly for the rich.

Ralph Nader b. 1934

One discussion I found fascinating was Matt's critique of the “consumer protection movement” of the 1960s and 70s, and its main proponent, Ralph Nader. I don’t think Matt is criticizing the elements of the movement that provided additional safety and protection for consumers, but he suggests that the movement’s emphasis on consumers (a word I’ve come to dislike when it takes the place of the word “citizen”) further eroded the traditional focus on small businesses, the ‘shop-keepers of the nation', who were central in many of the New Deal’s programs. The individual citizen AND small businesses were what mattered during Roosevelt's era—not the great corporations. Back then, the government acted to mitigate the impact corporations and the capitalist system had on citizen-workers.  “Consumerism”, on the other hand, added to the view that bigger was better, and that large systems were the venue for large, sweeping changes to be made effectively and efficiently. This emphasis on “efficiency” in today’s business world is one we hear all too often. And it's where small businesses became yesterday's news. Think: shopping malls, box stores and chain stores, and increasingly, on-line "One Stop" shopping. Convenience and efficiency, but at what cost? What price are we really paying for all those cheap plastic salad-shooters from China?

His details of changing governmental policies during those years, the under-girding of new views on the role of government, the role of central banks, the financialization of wealth and capital that we also hear more and more about today, are informative and well worth the read.

Today, Matt notes, there is little emphasis on regulating the size of corporations, either through monopoly and anti-trust legislation or even in seeing it as much of a problem. “Too Big To Fail” banks are an example of what happens as a result of the eroded checks and balances that in the past kept corporations to a size where freer competition can occur to everyone’s benefit. However, on a hopeful note, there is growing concern over the size and role of the current ‘Goliaths’—Google, Facebook and Amazon—and whether they need to be regulated more like public utilities. (Yes!)

Matt notes that because so much of the legislative work from the New Deal—continued and fought for in the decades following by Wright Patman and others—was overturned, particularly during the 1970s with the Watergate Babies and the rise of the neoliberal agenda under Reagan, and the later ‘corporatization’ of the Democratic Party under Clinton, many of the legal safeguards to rein in and regulate corporate power were gone. And Patman, increasingly isolated in his efforts,  would lose the Banking Committee Chair to an incoming "Baby" in 1975. He died a year later.

We have seen the results of these legislative changes: giant corporations (now they even have the legal identity of “persons”, due to the Citizens United Supreme Court decision a few years ago) have taken control of the media, manufacturing, agricultural, financial and banking sectors, etc., in the United States to the detriment of communities and citizens everywhere* (with neoliberal ‘free’ trade regimes and “globalization” practices of the corporate elites affecting the entire globe.) The 2007-8 economic crisis was a direct result of gutting such regulatory legislation. And the looming financial meltdown in the years ahead will also be as a result of repealing laws and regulations originating in the 1930s, laws that were safeguarded by politicians like Wright Patman until corporate power once more became ascendant. Capitalism, as Patman's work reminds us, is a force that must constantly be pushed back, else we fall beneath its wheels.

Matt recommends changes such as a return to more basic political ‘rules of engagement’ and, importantly, in educating future generations about the threats of monopoly capitalism.

On the YouTube news podcast The Rising, host Saajar Enjeti recently made a cogent and passionate argument for such necessary changes:

Saagar Enjeti

“They tell you that you’re stupid, and you’ve never taken an economics class, so you don’t know what you’re talking about. Who’s the actual stupid one? The smart person is the one who sits in their town and sees NAFTA get passed; sees the factory in their hometown leave, and sees everybody in that town suffer, lose their jobs, the opioid crisis, the destruction of the American family—all of this. Who’s the stupid one? Is it that person saying, ‘Hey, I want a little better trade policy for me and my family, and I want the government to help me out a little bit’. Or is it a Rick Wilson or one of these elite people telling you you’re better off because the TV in your living room is 8% cheaper than it was ten years ago. You tell me who the idiot is!”    

     

Couldn’t have said it better myself!

Cheers, Jake.



 *Including Canada. SW Ontario lost massive numbers of jobs, all going south to low-wage/regulation nations during these times due to globalization, for example.