My rating: 5 of 5 stars
This is the third book of Wu's that I have read, and I continue to be impressed with his weaving of history and law, particularly when it comes to complex concepts. In this book, as the subtitle suggests, Wu tackles the antitrust.
Wu meticulously and efficiently lays out the legal history and justifications of antitrust, its origins in the Sherman Antitrust Act back in the 1890s, the Supreme Court's decisions that upheld its enforcement to protect competition, and thus led to the break up of the big trusts, such as Standard Oil. He goes on to show how that spirit was kept alive up until the 1970s (including an anti-merger act in 1950), until legal theories were developed that contended that the purpose of antitrust was not to protect competition, but was "consumer welfare."
While enforcement still permitted the break up of AT&T in the 1980s, this "consumer welfare" standard eventually won out over the last 30 years, and we have had no real antitrust enforcement. Thus, we are left with out current economy governed by the tech giants (Facebook, Alphabet, Amazon), as well as a lack of competition in vast areas of the economy (airlines, cable, phones, beer, etc.).
I believe that Wu's analysis and argument conclusively demonstrate three truths, which are the opposite of much conventional wisdom when it comes to the arena of antitrust and monopolies: (1) monopolies, at a certain point, are no longer more efficient (the breakup of Standard Oil and the book of its "broken-up companies" are evidence of this); (2) monopolies, because they truly decrease competition, tend to reduce and stifle innovation (this is easily seen in the vast growth, diversification, and innovation that occurred in the communications industry once AT&T was broken up, as well as AT&T's own history); and (3) that legal review standards are much more manageable and easily applied when concerned with protecting a process (such as determining whether a merger will permit competition or reduce it) versus being concerned with protecting a certain value (such as, consumer welfare).
I have long thought that antitrust enforcement is a necessary element of any movement to reform parts of our economy, and our government. As Wu notes, antitrust is concerned primarily with the concentration of economic power and the harm that results. Understanding that such concentrations have significant impacts on political power means knowing that antitrust can address both economic and political inequalities, and make both the economy and government more democratic.
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