U.S. President-elect Joe Biden’s foreign-policy advisors have been eager to convey that “America is back” and ready to resume leadership of the Western world. But Biden and his team may soon discover that a foundation of past U.S. leadership—a reputation for competence—has eroded beyond easy repair. Donald Trump was only a symptom of this erosion, which has developed over decades of military misadventures, financial debacles, and now the calamity of COVID-19. And underlying all these reasons, as Trump saw but could not remedy, has been industrial decline.

In America’s heyday, the dominant economic formation was the large industrial corporation. Giants like General Electric, General Motors, Ford, Bethlehem Steel, International Harvester, and IBM provided the backbone of U.S. military power and technological dominance on world markets. These firms grew up on American soil, survived the Depression, and were buttressed by the New Deal and the mobilization for World War II. In the postwar years, their power was balanced by strong trade unions, the organized voices of consumers and independent scientists, and an engaged government that weighed those voices against those of big business. This was the reality described and endorsed by my father, the economist John Kenneth Galbraith. That reality still exists out there—but America’s industrial firms are no longer the world’s leaders, and those that are, are not in the United States.

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As U.S. industrial corporations have declined, a new group of self-styled progressives has come to prominence in the United States. They include the writers Barry Lynn and Matt Stoller, the lawyer Zephyr Teachout, and their leading political representative, Sen. Elizabeth Warren. This group sees monopoly power as the great villain—the textbook problems of monopoly being too little output at too high a price and the squelching of new firms and new products. Their solution is to use antitrust laws to break up businesses, especially Big Tech firms: Google, Facebook, Apple, and Amazon. They presume that a promised land of optimal competition can be reached through aggressive economic decentralization, unleashing the virtues and powers of the capitalist entrepreneur. Their program is, in effect, free market romance parading as populism.