The Powers Of Concentration (Or How We Got Here)

One of the features of American society in the current era is the concentration of power in the hands of an ever-shrinking circle of the few. That is true both in the economic and political spheres. As history has illustrated many, many times, with such concentration of power comes corruption and abuse, usually on a significant scale. And that concentrated power becomes both self-sustaining and self-regulating as it uses its existing power to expand its control over more and more of the levers of accountability and restraint. The growth of such concentrated power is no accident, but the result of conservative efforts, often aided both wittingly and unwittingly by so-called centrist Democrats, for the last 50 years.

The seeds of today’s concentration of power, both political and economic, were actually planted in the 1970s. Politically, the driver was the conservative backlash against the liberal gains of the 1960s and early 1970s where Blacks, women, and even gays were empowered like never before – for Blacks, gaining political power; for gays, the ability to come out of the closet; for women, an entry to the workforce – as well as the opposition to the war in Vietnam. Economically, the seed was the conservative exploitation of two separate food and energy supply shocks, one in 1973 and the other in 1978-79, which created a period of high inflation, low or even negative economic growth, and high unemployment in what became known as stagflation. More urgent for those driving the backlash, however, was the fear of the incipient regulatory state that was imposing restrictions and responsibilities on the unfettered power of business elites. For them, the emergence of new regulatory agencies like the EPA, Naderism, and the albeit disastrous but threatening left-wing campaign of George McGovern in 1972 required an immediate and coordinated response. It is this reaction to the liberal gains of the 1960s, the rise of the regulatory state, and the economic crises of the 1970s that have scarred policy makers for the last half century, and we still live with the consequences of both the responses and the failures to respond to the destructive policy outcomes driven by those reactions.

There are two seminal documents that laid the groundwork for conservative policies for the last 50 years. Economically, it was a 1970 article by Milton Friedman that promulgated the doctrine of the primacy of the shareholder. In that article, Friedman expanded on what he had written eight years earlier, that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits”, now adding that to do otherwise would be “undermining the basis of a free society…In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business…Insofar as [a business executive’s] actions in accord with his ‘social responsibility’ reduce returns to stockholders, he is spending their money”.

Politically, it was the 1971 memo to the US Chamber of Commerce by future Supreme Court Justice Lewis Powell titled “Attack On American Free Enterprise System” that was a clarion call to restore corporate power and fight the culture war in “the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences”, and, of course, in politics. According to Powell, the survival of the free enterprise system required corporate strength “in organization, in careful long-term planning and implementation, in consistency of action over an indefinite period of years, in a scale of financing available only through joint effort, and in political power available only through joint action and national organizations”. Powell continued, “That is the lesson that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination – without embarrassment and without the reluctance which has been so characteristic of American business”, adding ominously yet presciently, “Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic, and political change”.

While Powell’s memo itself was not widely distributed and clearly did not have anywhere near the reach of Friedman’s theory, its importance lies in the fact that it reflected the conservative views of the business and moneyed elites of the time as opposed to actually shaping them. The memo is a clear call to arms but reflects more of a synthesis of the thoughts and ambitions of the Chamber of Commerce types to whom he was writing, and, although those moneyed interests may not have specifically referenced the memo as a template for the future, it certainly laid out pretty clearly the actions and efforts they would undertake for the next few decades.

Both Friedman and Powell reflected the fear of incipient socialism, the perpetual and yet invariably fallacious canard of the right that was again prevalent at the end of the 1960s and almost laughably hyperbolic and unhinged in retrospect. Powell stated, “the assault on the enterprise system is broadly based and consistently pursued…gaining momentum and converts” and Friedman wrote that corporate social responsibility was a “fundamentally subversive doctrine” and would mean “that collectivist ends can be attained without collectivist means”, adding that a business executive who felt he had responsibilities for anything other than shareholder value “were unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades”.

Ironically, when taken at their word, the Powell memo and the Friedman doctrine were contradictory, with Friedman claiming that the business executive’s sole focus should be on maximizing profits to the neglect of all else and Powell demanding that the very same executive should amass political power and wage a conservative culture war. The way these two directives were reconciled was by using umbrella organizations, such as the very Chamber of Commerce that Powell was addressing, as well as private charitable foundations that usually relied on inherited wealth but most importantly did not have to report their political activities. Those organizations then worked on ensuring that the executive and shareholder class were highly compensated by dramatically expanding the share of income they received at the expense of the rest of society so they would remain committed to corporate power and would have plenty of spare cash to fund the efforts to manipulate the political system to further their profit maximization and culture war goals. These were the methods for ensuring the “scale of financing” and the “political power through united action and national organizations” that Powell outlined.

It is probably difficult for readers under age 60 to grasp what a departure the Friedman doctrine was from the post-Great Depression self-envisioned role of business. For the prior 50 years, corporations were responsive to all stakeholders – the employees, the communities they both served and in which they were located, and investment in future markets and future employees. The Friedman doctrine laid the intellectual foundation for destroying that social compact which eventually and inevitably led to the corporate pathologies that plague us today. The doctrine was especially insidious because, by making the CEO strictly answerable to shareholders, it separated the corporate executives from both the employees that worked for them and the communities in which they operated. And the way the shareholders ensured that the executives were only working for their interests was by tying compensation to the share price. This led not only to short-term thinking with constant focus on quarterly earnings but also an explosion in CEO pay. In 1965, the median CEO pay was just 20 times their typical worker; by 2021 it was just under 400 times the average worker, with CEO pay actually outperforming the stock market from 1978 to 2021.

Of course, the destruction of the social compact embedded within the Friedman doctrine did not occur immediately, but the economic distress of the 1970s were critical in moving the process along. In 1979, Robert Bork, the ultimate triggerman in Nixon’s Saturday Night Massacre, published the Antitrust Paradox which abandoned the long-held goal of antitrust policy of protecting small business from larger predatory competitors and focused it solely on whether consumers would benefit, so-called “consumer welfare”, a phrase concocted by Bork and a concept that existed nowhere in the antitrust legislation of the prior century. (Interestingly, Bork’s theory was also driven by the irrational fear of incipient socialism, writing in the early 1960s that the “socialists” were using antitrust law to keep the American economy weaker and more inefficient in order to undermine our free society. And all this was before Bork became a martyr on the right and an excuse not to even give Merrick Garland a hearing simply because he was rejected from joining the Supreme Court by a bipartisan majority vote in the Senate.)

There is a concept of consumer welfare in traditional economics, but, just like he misstated the intent of earlier antitrust legislation, he also misstated the economic meaning of consumer welfare. As Leah Samuel and Fiona Scot Morton write, “[Bork’s] model of ‘consumer welfare,’ unlike that found in standard economics textbooks, included not just the consumer surplus but also the producer surplus—the area above the supply curve and under the price. That area represents producer profits, or how much the producer earns above its cost of production. In conventional economics, the combined producer and consumer surplus is called ‘total welfare’, not ‘consumer welfare'”. Under Bork’s theory, a merger that raised prices for consumers but, through increased efficiencies, raised profits even more would meet his consumer welfare standard. In addition, according to Bork, any vertical integration was, by definition, an increase in efficiency and therefore not subject to antitrust restrictions.

In practice, of course, it didn’t even need to work that way simply because companies simply claimed that the future increases in efficiencies, mythical or actual, would be passed along to consumers in lower prices. And, of course, when those future efficiencies actually went to profits instead of lower prices, the proverbial horse had already left the barn and there was no recourse. As the economist Sandeep Vaheesan notes, “[R]etrospective analyses of corporate mergers have found that they often lead to higher prices and markups. And they generally do not yield productive efficiencies and indeed have often produced inefficiencies. Second, research has found that dominant firms can use below-cost pricing to eliminate and discipline rivals and maintain or augment their power”. Regardless of the actual impact, by 2004 the Supreme Court was actually providing rulings that specifically stated that “The mere possession of monopoly power, and the concomitant charging of monopoly prices, is not only not unlawful; it is an important element of the free-market system”.

While Friedman and Bork provided the intellectual framework for the consolidation of economic power, it was Ronald Reagan’s administration that ensured that the spoils of that power would also go to a concentrated few. One of the great economic myths of the mid-20th century and especially the stagflationary period of the 1970s was that it was driven by a wage-price spiral, a situation where an initial bout of inflation would then, because of cost-of-living adjustments in union contracts, raise wages which would raise costs and then prices again, creating another round of wage and price hikes that continually fed on itself and sustained a prolonged period of high or higher inflation.

Among others, Alan Blinder and Jeremy Rudd have shown the fallacy of the wage-price spiral story of the 1970s. The initial round of inflation in 1973-74 was caused by supply shocks in the food and energy sector.  An El Nino event had caused worldwide crop failures (perhaps a relevant warning for today) and the imposition of an oil embargo by the Arab members of OPEC in response to the Arab-Israeli war quadrupled the price of oil. Those shocks were exacerbated by the lifting of wage and price controls that President Nixon had implemented to aid his 1972 re-election campaign. But by 1976, headline inflation had fallen to less than half of its peak in 1974. Similarly, a similar supply shock in the energy and food sectors in 1978-79 prompted the second round of inflation, but, again, that fell by over a half by 1982. In both cases, the relatively quick decline in inflation, as well as the fact that high unemployment was actually providing downward pressure on wages, provides no support for the idea that wage increases tied to cost-of-living adjustments prolonged those two recessions of the 1970s. Further evidence of the fallacy of the wage-price spiral can be seen today where the inflation cause by the pandemic-created supply shock has finally eased without the need for massive unemployment even as wage growth remains high.

The myth of the wage-price spiral, however, supported the idea that business executives and unions were colluding to work against both the interests of the shareholders and consumers. For shareholders, that argued for greater enforcement of the Friedman doctrine. For consumers, especially those who never saw the wage gains and job protections that union members received, it created public antipathy toward unions. So it was no surprise that the public largely supported Reagan when he fired over 11,000 air traffic controllers in 1981 for striking for shorter working hours and upgraded equipment after failing to reach a contract agreement with the FAA. In addition, Reagan banned those fired from government employment for life and the union, PATCO, was decertified. (Ironically, the cost of training replacement controllers ended up far exceeding the demands of the strikers and constrained air traffic for years afterward.)

Reagan’s destruction of PATCO and replacing those controllers with, let’s call them what they were, scabs, signaled open season on unions for American business using the very tactics Reagan employed. The number of major work stoppages dropped by around 75% between 1979 and 1985. It became acceptable for companies to use scabs, euphemistically called replacement workers to this day, as well as to attempt to decertify striking unions in order to break strikes, as multiple major firms like International Paper and Phelps Dodge soon illustrated. In addition, companies became more aggressive at fighting attempts at unionization, developing tactics like mandatory meetings to spout anti-union propaganda, forcing drawn-out unionization elections even after a majority of workers had card-checked, or simply and illegally firing union activists, knowing that toothless labor laws provided workers with little or no recourse. Companies also began farming out what were formerly union jobs to non-unionized (lower paying and often overseas) subcontractors. Even in a decade that was not good for labor, around 70% of the first attempts to form a union and win a contract succeeded in the 1970s. By the end of the 1980s, that rate had fallen to around 55%.

Neutering the bargaining power of unions was just one half of the equation in shifting the spoils to the few. The second part was making sure those spoils got routed to the executive and investor class. Reagan disguised this effort as a way to shrink the size of federal government and the federal debt, relying on a now thoroughly debunked economic theory sketched out on a napkin by one of Friedman’s cohorts at the University of Chicago in 1974, Arthur Laffer.  Reagan and the Republicans used this theory, the Laffer Curve, to argue that tax cuts would not only just magically pay for themselves but also actually increase federal revenue. Reagan, with plenty of help from centrist Democrats as well as a failed assassination attempt, cut the top marginal tax rate from 70% to 28%. In addition, the corporate tax rate was cut from 46% to 35% and the top capital gains tax was temporarily reduced from 28% to 20%.

Unsurprisingly, the tax cuts never delivered on Reagan’s stated goals. Rather than increasing, revenues declined by a whopping 13% over the next four years and by 1992 the debt had nearly tripled. As David Stockman devastatingly illustrated, the federal government did not shrink either. But the unstated goal of shifting economic power to the executive and investor class was an unmitigated success. By the end of G.H.W. Bush’s term in 1992, the top 10% had seen their income grow by over 35% while the bottom 50% had seen their incomes decline by over 12%. That the bottom 50% of wage earners saw their incomes decline by such a shockingly large amount over a period where interest rates dropped from over 19% to below 3% and GDP growth averaged 2.3% shows just how effective Reagan’s policies of wealth transfer worked.

It was under Reagan that we also saw the fusion of a resurgent Christian right with the ever-present white nationalism becoming a significant force within the Republican party, which soon transformed into an often uneasy but unholy alliance between the budding theocrats and the emerging oligarchs. Like Powell, this new white Christian nationalism was interested in dominating the important areas of civic life. Seven Mountains Dominionism emerged in the mid-1970s focused on gaining influence in the seven arenas of civic society – family, religion, education, media, entertainment, business, and government. Christian Identity, an often violent racist and anti-Semitic theological movement surfaced in the early 1980s. William Gale’s Posse Comitatus, a citizens sovereignty movement started in the 1970s, joined forces with the Christian Identity movement in the early 1980s. Randall Terry, a disciple of Christian nationalist Francis Schaeffer who saw the world as a battle between Christians and secularists, founded the anti-abortion Operation Rescue in 1985 with an almost explicit advocation for violence against abortion providers, which soon occurred.

These fringe grass roots movements soon found fertile ground in rural America where Reagan’s laissez faire economics and deregulation undid the New Deal’s farm policies and devastated farmers, ranchers, and their communities. Punishingly high interest rates, implemented to break the mythical wage-price spiral, devastated land values and caused over 250,000 farms to foreclose. Those lower-priced land values allowed the big agriculture companies to scoop up struggling and foreclosed farms for virtually nothing, a massive wealth transfer that consolidated more power in the hands of a few.

It is a tribute to Reagan’s rhetorical skills as a salesman, the impotence of his Democratic opposition at the time, and the implicit racism of some of these groups that he was able to unite these emerging factions under the Republican banner using the culture war slogan of “family values”. In that effort, he was helped by a far more well-funded group founded by Jerry Falwell and Paul Weyrich in 1979, the Moral Majority. While the Moral Majority claimed it was driven by abortion politics, its primary mission was to protect the segregated private religious schools that had originally been formed starting in the 1950s and 1960s in the wake of Brown v Board of Education and the Civil Rights Act. Weyrich was specific about aligning with Powell’s vision, saying, “When political power is achieved, the moral majority will have the opportunity to re-create this great nation.” Under Reagan, the Christian right had very few legislative victories in pursuing their “family values” agenda on abortion and school prayer, as well as opposition to LBGTQ rights, women’s rights, and pornography. Those failures pulled the movement in two directions – one more violent and one increasingly focused on judicial power, a power they saw as not only fostering the conditions they opposed but also the most useful tool for (re)creating and then protecting the Christian nation they imagined and desired.

While the efforts under Reagan to shift power and wealth to the investor class were ongoing in the legislative arena, the judicial branch was also abetting the expansion of corporate power and responding to Powell’s demand for “social, economic, and political change”. By the time Powell had written his memo, the brief, less than two-decade long liberal dominance of the Supreme Court had ended. With the retirement of Chief Justice Warren and the resignation of Judge Fortas (for far less corruption than Clarence Thomas today), President Nixon had already changed the ideological balance on the Court. Nixon replaced Warren as Chief Justice with Warren Burger and, after two other nominations could not get confirmed in the Senate, Harry Blackmun finally replaced Fortas. When Justices Hugo Black and John Marshall Harlan both retired within a week of each other in September 1971, Nixon was able to further shape the Court with the confirmations of Powell, who was basically a racist corporate lawyer defending the tobacco companies and had never been a judge, and the now-acknowledged racist and future Chief Justice, William Rehnquist. Those four appointments, all within the span of three short years, became the conservative bloc, voting with each other a remarkable percentage of the time, and created a conservative majority that has lasted for over 50 years and threatens to last another few decades in the future.

The appointments of Powell and Rehnquist were the catalyst for a process that we saw up until the Trump era from the Supreme Court – rarely explicitly overturning established precedents, but rather whittling them away until there is little left of them. (In the Trump era, the Court has ceased caring about precedent at all.) In the months preceding the ascension of Powell and Rehnquist, the Court upheld a plan to use busing to integrate schools in Charlotte, North Carolina, a decision that was consistent with the Warren Court’s decision in Brown v. Board of Education. Three years later, the Court, in a 5-4 decision with Burger, Blackmun, Powell and Rehnquist providing four of the five majority votes, that decision was whittled down to allow busing only within district. That result was presaged a year earlier when the Court ruled that states had no constitutional obligation to equally fund public schools, enabling continued segregation by economic power instead of explicitly race. Similarly, the Burger Court took the Warren Court’s Miranda rule and riddled it with so many exceptions that it is basically null and void today. The Court also began its long effort to neuter the Voting Rights Act with a 1980 decision that effectively enshrined white rule in the city of Mobile.

While the Burger Court was whittling away the rights of actual citizens, it was expanding the rights of corporations, with Powell leading the way. In 1976, Powell helped cobble together a majority that allowed a candidate to spend unlimited amounts of his own money, but, more importantly, enshrined the concept that money equals speech and that outside groups could also spend unlimited money as long as they didn’t formally endorse a specific candidate. This ruling opened the door for the creation of what are now independent-in-name-only political action committees (PACs) that pretty openly coordinate with candidates’ campaigns. Perhaps Powell’s crowning achievement was writing the 5-4 majority opinion in a 1978 case that declared that corporations have First Amendment protections that allow them to spend money on politics, a decision that paved the way for Citizens United (speech) and Hobby Lobby (religious liberty and the right to discriminate). That 1978 decision specifically overturned a Massachusetts law that barred corporate money in ballot initiatives unless the corporation was directly impacted. What’s perhaps more interesting is that the ballot initiative that prompted the case was an attempt by three multinational corporations to block modifications to the state personal income tax, something that would have had no direct impact on the corporate business per se but certainly would greatly affect corporate executives and shareholders.

Guided by Powell and the Burger Court, by the end of the decade of the 1970s the pro-business slant of the courts had become so ingrained that judges were citing Bork’s “consumer welfare” standard in antitrust cases almost immediately after he proposed it in 1979. Powell then capped off his judicial career by again joining a 5-4 majority in a 1986 case that allowed non-profits to use their corporate treasury funds for political advocacy as opposed to for-profit corporations that would still be required to raise money for their PACs through voluntary donations. This new loophole for non-profits just so happened to align perfectly with Powell’s original design in 1971 for corporations to use umbrella organizations, such as the non-profit Chamber of Commerce, to engage in pro-business political activity.

While Powell was (ab)using the power vested in him as a Justice of the Supreme Court, the conservative infrastructure that he envisaged in his memo was being built, financed largely by inherited wealth. In 1972, the Business Roundtable, a corporate lobbying group that specifically declared Friedman’s primacy of the shareholder as the raison d’etre of a corporation, was created. The Roundtable was open only to the CEOs of major corporations, and it soon consisted of over half of the CEOs in the Fortune 200. The Heritage Foundation was founded in 1973 and was initially primarily funded by Joseph Coors and then by future Clinton nemesis Richard Mellon Scaife. Coors’ inherited money also founded the Castle Rock foundation in 1993, focusing on a “better understanding of the free enterprise system”. In 1973, John Olin, who had made his money providing ammunition to US and allied forces in World War II, began using his fortune to “to help to preserve the system which made its accumulation possible in only two lifetimes, my father’s and mine”. The Olin Foundation created the academic discipline of “Law and Economics” and funded conservative think tanks like the American Enterprise Institute, the Center for Individual Rights, the Heritage Foundation, the Hoover Institution, and the Manhattan Institute. The Cato Institute, the libertarian think tank, was founded by Charles Koch in 1977.

While the millionaire-funded think tanks were providing the intellectual cover for the policies that transferred wealth to the investor class and its rentier brethren, a similar structure was being built in order to ensure those policies became both legislation and law. ALEC (the American Legislative Exchange Council) was co-founded in 1973 by one of the founders of the Heritage Foundation with the express purpose of creating model right-wing legislation that would be adopted by both Congress and state legislatures. The Chamber of Commerce itself, the organization to which Powell’s memo was addressed, set up its own litigation department in 1977, the National Chamber Litigation Center, to “fight for business at every level of the US judicial system”. According to Ann Southworth, “New conservative and libertarian PILFs [Public Interest Legal Foundations] and legal advocacy groups founded during the 1980s included Christian evangelical groups such as the Rutherford Institute (1982), Home School Legal Defense Association (1983), Concerned Women for America Education and Legal Defense Foundation (1983), National Legal Foundation (1987), and Liberty Counsel (1989). They included law and order groups, such as the Criminal Justice Legal Foundation (1982) and Crime Victims Legal Advocacy Institute (1985), and libertarian organizations such as the Competitive Enterprise Institute Free-Market Legal Program (1986), Manhattan Institute’s Center for Legal Policy (1986), Cato Institute’s Center for Constitutional Studies (1989),16 and Center for Individual Rights (1989)”. Of course, what turned out to be the big daddy of them all, The Federalist Society for Law and Public Policy Studies, was founded in 1982 with funding from the aforementioned Olin Foundation with additional help from Richard Mellon Scaife and the Koch brothers. The Society saw itself as “a group of conservatives and libertarians dedicated to reforming the current legal order” as well as creating “a
conservative network that extends to all levels of the legal community”.

Half a century on, all these policies and pressure groups have created a toxic stew of consolidated and unaccountable economic, political, and judicial power that is simply astounding, probably surpassing any of the expectations of their now deceased architects. Worse, these consolidated centers of power continually feed even more power to each other as the influence of their benefactors and beneficiaries increases in a corrosive cycle of corruption and self-dealing – economic power fuels political power which fuels judicial power which fuels even more economic and political power, and on and on it goes.

As Powell predicted and the Federalist Society plotted, the judiciary has been the most transformative force in fueling the rise of concentrated power. Unsurprisingly, then, the courts have used that transformational force to arrogate more power for themselves. They have usurped power from ordinary citizens by diluting their vote through partisan gerrymandering, restricting voting rights, and making it almost impossible for a poor or working-class person to run for federal office by creating a campaign finance system made for billionaires; by preventing women from controlling their own bodies and preventing doctors from providing necessary health care; by consistently limiting the power of workers to form unions. The courts have grabbed power from Congress by overruling laws that passed with wide bipartisan majorities and had been previously held as constitutional for decades. They intentionally ignore or misstate the meaning of congressional statutes in order to overrule them. The Supreme Court has now restricted the ability of the executive branch to actually implement laws as directed by Congress, opening agencies up to perpetual legal challenges of both new and long-established rules. The Court has impinged on the powers of Congress and the executive branch by allowing venue-shopping where conservative plaintiffs can guarantee the legal outcome they desire from a hand-picked judge who will often institute a nationwide injunction if desired. And finally, the Supreme Court has arrogated power from its own lower courts, consistently using the shadow docket to both involve themselves in cases before lower courts have even established a full record and make actual merit decisions before the lower court has ruled. In addition, the Court destroys existing precedent without providing any workable framework with which lower courts can comply, meaning even more cases get funneled to the Supreme Court.

The courts are now both a cesspool and enabler of corruption. Hundreds of federal judges preside over cases where they have a financial interest. Current Justices on the Supreme Court have taken millions in improper gifts, (many unreported as required by law), and allow themselves to be wined and dined by wealthy benefactors who have either cases or an agenda before the Court. Justices refuse to follow ethics guidelines on recusal and rule on cases where their families have a direct or indirect interest. The Court’s incredible narrowing of what constitutes bribery and its decimation of campaign finance laws have fueled rampant political corruption. It constantly invents new “doctrines” like “history and tradition” and the “Major Questions doctrine” while blowing up decades of precedent. Its radical interpretation of the Second Amendment has turned America into a killing zone. Its extension of First Amendment rights of religious freedom to corporations has created a right to discriminate and that same expansive and ahistorical theory of religious freedom is opening the door to public funding of religious schools. Incredibly, the Court has now ruled that presidents possibly have absolute immunity from criminal acts they commit while in office, (although they again arranged it so that they would have the ultimate power to be the final arbiter of which criminal act would or would not be protected by not providing any guidelines for determining official and unofficial acts).

In stark contrast to the neutering of Congress and the executive branch stands the leniency and expanded power afforded to certain privileged actors, primarily moneyed interests. The advent of what is essentially legalized bribery, the rollback of campaign finance laws, and the associated explosion of dark money gives the billionaire class astounding level of both access and control over the political arena. Billionaires can direct the policies of state governments solely through the power and breadth of their campaign contributions as well as individually float entire presidential campaigns as the Adelsons did for Gingrich in 2012, the Mercers for Trump in 2016, and Steyer and Bloomberg for themselves in 2020. They can also kill a campaign by withholding dollars and/or extorting elected representatives to trash members of their own party, as they just did with Biden. Members of Congress can now be bought and paid for by special interests and then become rich themselves by trading on insider information or taking bribes from interested parties. It is clear that foreign money regularly exploits the weakness in campaign finance enforcement in order to illegally influence US elections and policies. The courts consistently block advances in workers’ rights, (often using tortured logic and ignoring decades of precedence), to the advantage of corporate power. As mentioned earlier, the neutering of the administrative state also contributes to expanded corporate power. In addition, corporations are able abuse the legal system to avoid accountability for their illegal, even criminal, actions, often by litigating fines or cases for decades, as well as intimidating workers, consumers, suppliers, and competitors through mandatory arbitration and/or the high cost of litigation.

Today, in the economic sphere, virtually every major industry in the country is dominated by just a handful of companies, having eliminated or marginalized other competitors through acquisition or predatory pricing. Just eleven companies control vast majority of the food, drink, and other consumer goods Americans buy. Each of these eleven companies own dozens of brands, creating the illusion of competition and choice to the unknowing consumer. One of those eleven is also one of the eight firms that control the personal hygiene and beauty products we buy, again all sold under an illusory blizzard of brands. Four companies dominate the retail grocery market with Walmart on its own comprising 25%.

In health care, three companies control virtually all US drug stores and one of those companies just purchased one of the four companies that dominate the US health insurance market. Three prescription drug wholesalers are intermediaries between those insurance companies and the handful of pharma companies that have a monopoly on the drugs they produce. Finally, hospital mergers have created both local and regional health care monopolies and, correspondingly, health care deserts. In agriculture, whatever small farms are left are squeezed by the pricing power of both the four companies that dominate the chemical and seed market and the four companies that control beef, pork, chicken, and soybean processing. As the recent Crowdstrike update that crippled business and governments internationally illustrated, the level of concentration and domination in the tech sector is potentially destabilizing.

The list goes on and on: in travel, airlines (four firms), hotels (three firms), internet booking of hotels and flights (two firms), and rental cars (three firms); cable and internet services (four firms, one of which now owns one of the four major TV networks); wireless carriers (four firms); tech (four firms); banking (four firms); consulting (four firms); satellite radio (one firm); ride-sharing (two firms); music labels (three firms); live entertainment ticketing, promotion, and venue management (one firm); home improvement (two firms); fast food (four firms); film and TV production (five firms); book publishing (five firms), but Amazon alone has nearly 60% of all book sales; beer (two firms); wine (four firms); toothpaste (two firms); cat food (two firms); sun and eyeglass manufacturing (one firm); canned tuna (three firms); pasta (three firms); breakfast cereal (three firms); baby formula (three firms); baby food (three firms); tacos/tortillas (three firms); mayonnaise (two firms); yogurt (two firms); etc., etc.

This concentrated economic power has resulted in the disappearance of small businesses and mom-and-pop stores that cannot compete with the big box retailers and online behemoths. It’s responsible for the decades-long stagnation of wages concurrent with an explosion in income inequality and the wealth gap between workers and owner/investors. Today, just 806 Americans have nearly 60% more wealth than the bottom 65 million households combined and the effective tax rate for billionaires is actually lower than that for ordinary workers. It has created news deserts and food deserts. It has decimated the regional balance of the country’s economy as “anchor” corporations disappeared – since 1980, for example, St. Louis has seen the number of Fortune 500 companies headquartered in the city drop from 23 to 7. It has encouraged economically unproductive schemes like stock buybacks and abandonment of any long-term planning in favor of focusing on the next quarterly report. It has allowed for rampant wage theft, both price and salary collusion, the abuse of contract workers to avoid the legal requirements of actual employment, and the proliferation of non-compete clauses that restrain salaries and worker mobility. It has created an implicit legal acceptance of the use of both undocumented and child labor, as well as ongoing efforts to make that acceptance explicit.

As in banking, many of the firms that dominate their sector have not only become too big to fail but also too big to effectively regulate and control. We see continued corporate recidivism for illegal actions that are merely treated as a cost of doing business. Uber, for example, built its business by simply ignoring local regulations, engaging in blatant predatory pricing, and categorizing its drivers as subcontractors bound by coercive contracts. Amazon uses its vertical monopoly to drive business to its own products. Most of today’s large language models are built on the illegal use of copyrighted data.  The barriers for entry in these concentrated sectors are enormous, limiting new business formation, and buy-to-kill strategies against any emerging competitors are fairly common. In 2014, nearly 50% of all profits by American companies went to just 500 companies and a large portion of the latest bout of inflation can be directly tied to corporate greed rather than solely increased costs. Private equity uses firm-financed debt to buy companies, essentially loot them, and then leave a bankrupt or near bankrupt shell behind. The sacred mantra of the primacy of the shareholder has decimated the culture that creates well-functioning companies, with Boeing being the latest example. Finally, horizontal shareholding (where large investors own significant stakes in multiple companies in a concentrated sector) and interlocking directorates (where the same people sit on the board of directors of theoretically competing firms) further enhance the probability of price and wage collusion as well as divvying up markets, and further reduce any incentive for real competition.

With that concentrated economic power came political power. In the early 1970s, most companies had no lobbying presence at all; by the mid-2010s, they were spending over $2.5 billion on lobbying efforts in Washington. While there is obviously some overlap between the two, corporate lobbying has morphed from its original efforts to ensure government did not interfere with business into an attempt to use government policy and funds to create/protect/enhance an individual firm’s or group of firms’ competitive advantage. As one lobbyist described it, “it was ‘just keep the government out of our business, we want to do what we want to,’ and gradually that’s changed to ‘how can we make the government our partners?’”

Hugely profitable cartels like Big Oil, Big Pharma, and Big Ag still receive tens, even hundreds, of billions in government subsidies. Similar cartels have captured federal agencies and built a revolving door between the supposed regulators and those they supposedly regulate. At the state level, corporate power creates an environment of rampant corruption, both actual and perceived, at all levels of government, from outright bribery to the infiltration of entire state’s political apparatus, while at the same time eliminating the few remaining checks on such unethical/illegal behavior. Today, corporations literally write the bills legislatures are considering, often without even the legislators who actually sponsor the bills, much less those simply voting on them, bothering to read them.

In the cultural arena, Powell’s goal of moneyed interests’ dominance in “the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences” is perhaps not complete but clearly well established. Reagan’s 1987 repeal of the fairness doctrine blurred the line between news and propaganda, between journalism and entertainment, and encouraged extremism. Mainstream media organizations are now either a relatively small cog inside a small group of larger corporate conglomerates or a plaything for billionaires, both of which have no compunction about exerting editorial control over their content and purely respond to financial considerations. Smaller news outlets, especially at the state and local level, have been sucked dry by hedge funds and vulture capital and replaced by propaganda outlets, leaving both news deserts and an expansive void in the oversight of corrupt state and local governments. The explosion of politically oriented privately funded foundations and think-tanks regularly produce flawed and biased research and analysis for intellectual journals and newspapers that are purely designed to be tools for political propaganda. Since Reagan, the evangelical movement has been the core of support for the prior documented efforts to concentrate power over the last four decades. The movement has largely abandoned any moral compass based on theological teachings in order to focus on abortion and the further pursuit of its own power in the hopes of establishing some version of a Christian theocracy. Its unflinching support of its corrupt and morally bankrupt leaders, who are often a combination of charlatans, perverts, rapists, and criminals, can only be described as cult-like.

Because the core Renaissance values of free speech, free expression, and the scientific method are so deeply embedded in the culture and that has made it far more difficult for oligarchic power to control the areas of education, arts, and sciences. To be sure, there were plenty of efforts to suppress certain speech and knowledge, as well as to restrict government support for the arts and education. And there were occasional efforts to force the teaching of bogus “science” such as creationism and abstinence-only sex education. But education, arts, and sciences were also marvelous vehicles for whitewashing the images of the billionaires whose fortunes were often built on toxic and deadly exploitation while getting tax breaks for such philanthropy. While the recipients of that money were well aware of the danger of seriously offending their patrons, they usually also had a fair degree of freedom of how that money would be used.

More recently, however, philanthropic money for education and arts has increasingly come with strings attached. Donors are now able to direct the firing of university presidents who protect the right of free speech and assembly as well as the expulsion of students who engage in those rights in support of positions inimicable to those donors. The corporate/billionaire nexus, using the political power purchased with its dollars, is now eliminating entire educational disciplines, removing scientific evidence from policy discussions, banning books, criminalizing librarians for simply doing their job, and employing vouchers to destroy public education by siphoning that public money to private interests that include religious schools which the Supreme Court now allows to engage in religious indoctrination and discriminatory behavior.

Today, the men and women who control the levers of this destructive concentrated corporate, financial, and political power live in a land of lawlessness, a region in which they are nearly unaccountable.   Individually, they can literally rape and pillage as they please, with little or no fear of any censure or accountability. Similarly, the corporations they control can figuratively and literally rape and pillage the world with little fear of being held to account. These oligarchs’ impunity is now so great that they are hostile to democracy itself, either because they view it as a threat to their position of privilege and dominance or treat it as an annoying hindrance to the exercise of their power. And they are abetted by their corporate peers who remain silent on this concentrated power’s threat to our democracy and to the stability and confidence in the rule of law that business requires possibly in the hopes of getting their own set of tax cuts and/or regulatory relief.

The world that we live in today, with its loci of increasingly unaccountable concentrated power, is largely the result of the vision laid out by Powell and Friedman half a century ago. They were the architects, and, like the pyramids, it has taken years to build, from Reagan to Roberts, Murdoch to Musk, the Bushes to Barr, the Kochs to Kavanaugh. There is a dark irony in the fact that the language that Powell and Friedman used to sell their vision, whether as true believers or as simple rhetoric to wield power with results they would be satisfied with today, was that it was necessary to save democracy and capitalism from the bane of socialism. Instead, what they created is a kleptocratic oligarchy that threatens democracy and pretends it is capitalism even as it actively subverts that very system.