“We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”
-Supreme Court Justice Louis Brandeis
Ledger of Harms
Over the last 40 years, concentrated economic power in the United States has reached extreme proportions.
Across a wide range of markets—not just tech, banks, media, health care, and airlines, but everything from eyeglasses to baby formula and mattresses to meat processing—a few corporations dominate sector after sector of our economy. Often deeply integrated with Wall Street interests, these corporations wield tremendous power over our economy and democracy.
This means that the underlying structure of most markets are pre-programmed for driving inequality and producing unjust outcomes. Corporate monopolies extract more and more wealth and power from working people, independent businesses, entrepreneurs, ordinary investors, consumers, and entire communities. And they are often the vehicles through which a handful of individuals have amassed unprecedented fortunes.
Dominant corporations also wield tremendous power over our democracy to shape public discourse, influence government policy, and avoid accountability. Their political power entrenches and exacerbates economic and political marginalization among historically excluded communities. It also contributes to deep injustices in the application of the law; for the most powerful corporations, laws are often mere suggestions, in stark contrast to the abusive ways our legal system treats the poor and communities of color.
Below, we catalogue some of the ways that concentrated economic power causes or contributes to a broad range of social problems and injustices, drawing on a growing body of research and analysis.
Corporate Concentration Raises Prices
Combined with lower wages, corporate consolidation costs the average American household $5,000 a year in lost purchasing power. Mergers between companies result in a 7 percent price increase, while markups—how much companies charge for products beyond their production costs—have tripled since 1980.
Corporate Concentration Inhibits Good Job Creation
Employment falls as employers’ power over the labor market increases—and is roughly 13 percent less today because of concentration. Concentrated firms hire fewer workers, produce less output, and earn higher profits than would otherwise be the case.
Corporate Concentration Undermines Community Well-Being
Large corporations increasingly dominate local economies, pitting states and cities against each other to win pro-corporate policies. Yet counties where small, locally-owned businesses account for a larger share of the economy have higher income and employment growth and lower poverty rates.
Corporate Concentration Depresses Business Dynamism
The startup rate has collapsed, by nearly half and the remaining dynamism is often an illusion. Existing corporations open 40 percent of new businesses, while “high growth” firms—young companies that play an especially important role in employment, productivity, and wage growth—have declined.
Corporate Concentration Threatens the Supply of Critical Goods
Dominant corporations expose American consumers to significant risks of disruption from concentrating supply chains, including shortages of essential drugs. Parts suppliers have also consolidated in recent decades, exposing supply chains to greater risk of product shortages if disaster strikes.
Corporate Concentration Corrupts Our Politics
Dominant corporations spend unprecedented amounts to influence policy outcomes. Lobbying spending reached an eight-year high in 2018, totaling $3.4 billion. But corporations also invest heavily in unregulated lobbying, likely more than doubling their total influence spending.
Securing economic liberty for everyone in America means empowering consumers, workers, and communities and freeing them from discrimination, extortion, and abuse from unchecked monopolies and predatory finance. It means ensuring entrepreneurs and businesses are able to succeed on the merits of their ideas and hard work. And it means broadly distributing wealth and market power to promote equitable political power and safeguard American democracy.
There’s no one-size-fits-all solution or single bill to pass to guarantee economic liberty for all. Instead, our democratic institutions must aggressively and vigilantly wield a suite of powerful policy tools — like aggressive corporate oversight, antitrust enforcement, anti-corruption measures, financial regulation, international trade arrangements, and a reinvigorated administrative state — to challenge monopolies’ dominance over our economy and democracy. It is up to us — as consumers, workers, business people, and citizens — to make sure that they do.