Much like in the first Gilded Age, antitrust enforcers today are hitting labor, not capital. This is thanks to Robert Bork’s radical and influential reinterpretation of antitrust law. In helping successfully rewrite antitrust, Bork left a legacy of corporate supremacy and individual powerlessness.
In his June speech on democratic socialism, Senator Bernie Sanders lamented that “income and wealth inequality today in the United States is greater than at any time since the 1920s.” As Sanders noted, the new Gilded Age was not inevitable and is the product of many political choices. Presidents from both parties, Federal Reserve chairs, titans of industry, and libertarian thinkers restructured the economy to confer supremacy on the very wealthy and, accordingly, disempower everyone else.
Robert Bork belongs in this pantheon of parents of the new Gilded Age. Although Senate Democrats led by Joe Biden famously denied him an appointment to the Supreme Court in 1987, the late Bork, in his positions as a law professor and a judge, played a critical role in recreating the antitrust law of the original Gilded Age. During that period, antitrust enforcers largely allowed corporations to merge and control markets in, for instance, chemicals, steel, telegraphs, and tobacco (notwithstanding the early 20th century trustbusting memorialized in history textbooks) and instead targeted the organizing campaigns of industrial workers.
Due to the extraordinary influence of Bork’s writings as a scholar and judge, the Department of Justice and Federal Trade Commission today mostly leave Google, Walmart, and other powerful businesses across the economy alone and seek to suppress the collective action of workers in the service economy. Antitrust enforcers have targeted Uber drivers, home health workers, music teachers, and public defenders, among others. As I detail in a recent law review article, antitrust law again resembles its Gilded Age form—accommodating capital and policing labor—and has given us corporate monopoly and individual powerlessness. Creating an equitable society requires nothing short of wholesale reform of our antitrust law and policy and renouncing the ideology and prescriptions of Robert Bork.
A Radical Reinterpretation of Antitrust Law
Following the growth of national railroads and other large corporations in the mid and late 19th century, Congress enacted the Sherman Act to ensure the public would be the master of these state-chartered entities and not their servant. Senator John Sherman made the stakes clear in a speech on the Senate floor and declared, “If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessaries of life.” Along with taming monopoly directly through law, the principal drafters of the Sherman Act believed that organizations of farmers and workers were desirable and indeed critical to checking corporate power.
Despite Congress’ grand antimonopoly aims, the Gilded Age judiciary quickly neutered the effectiveness of the new law and unleashed the first merger wave in American history. In an 1895 decision, the Supreme Court held that, under its then-narrow interpretation of Congress’ power to regulate interstate commerce, the Sherman Act did not prohibit even monopolistic mergers in the manufacturing and mining sectors. With this judicial green light to control markets through consolidation, corporations went on a merger frenzy that transformed the US economy. Landmark antimonopoly suits under Presidents Theodore Roosevelt, Taft, and Wilson and new federal antitrust statutes, including the Clayton and Federal Trade Commission Acts, barely dented this concentrated economic structure. This period birthed many of the giants (think Du Pont, General Electric, Nabisco, and US Steel) that dominated American industry for much of the twentieth century.
At the same time as they allowed corporate consolidation, big business-friendly administrations and courts used the Sherman Act to restrict the freedom of workers and their unions. An infamous antitrust case of the 1890s was against the Pullman strike, the 1894 railroad strike that ultimately led to the creation of Labor Day. The government used the Sherman Act to prosecute railroad workers and union leaders for striking in sympathy with the labor walkout in the company town where Pullman rail cars were manufactured. The railroad workers, led by Eugene Debs, sought to pressure their employers to stop hauling Pullman cars until George Pullman recognized his workers’ union. This antitrust suit against labor was not an aberration but representative of how the Sherman Act was used during this period. Describing the misuse of antitrust, the historian Richard White wrote, “The Sherman Act was directed at capital, but hit labor.”
Franklin Delano Roosevelt’s New Deal remade the relationship between the government, business, and labor, including the enforcement and interpretation of the antitrust laws. Beginning in the late 1930s and following a burst of great policy experimentation, the federal government stepped up antitrust prosecutions of big businesses. For the next four decades, businesses had far less autonomy to control markets through mergers and predatory practices and were compelled to grow through product improvements and investment in new plants. While capital was constrained, labor had substantial autonomy and faced a diminished threat from antitrust. Legal and institutional reforms gave workers much greater freedom to organize industries and reduced the antitrust risk to labor.
Capturing a common view during the postwar era, Supreme Court Justice Thurgood Marshall described the antitrust laws as a constitution restraining corporate power. In a 1972 case, Justice Marshall, speaking for a high court majority, stated, “Antitrust laws . . . are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms.”
| “At the same time as they allowed corporate consolidation, big business-friendly administrations and courts used the Sherman Act to restrict the freedom of workers and their unions.” |
As conservative attacks on the New Deal gained traction starting in the mid-1970s, antitrust was an early target. Corporate executives resented how antitrust law and New Deal regulations in general restricted their freedom of action. For the corporate class seeking to overthrow these public rules, Robert Bork, a law professor at Yale, would be a savior. He had been concocting the theories by which corporations would overthrow the antitrust fetters of the postwar period.
Bork offered a radical reinterpretation of antitrust law. Inventing a legislative history out of whole cloth, he argued that Congress enacted the Sherman Act only to protect “consumer welfare” and not to control the broader economic and political power of corporations. Further, based on hypotheses with little or no empirical support, he asserted that mergers and trade restraints allowed businesses to lower costs and improve services and thereby benefit consumers.
Bork did believe in one antitrust prohibition. He argued that collusion among rivals should be aggressively prosecuted. His conception of collusion swept broadly and did not differentiate, for example, between pharmaceutical companies conspiring to raise prices on prescription drugs and public defenders banding together to obtain a living wage.
In the 1970s and 1980s, corporate attorneys, citing and quoting Bork on behalf of their clients, found increasingly receptive audiences in the federal courts and agencies. The Supreme Court, starting in the Nixon years, and the Department of Justice and Federal Trade Commission, beginning with Reagan, were eager to read the theories of Bork into case law and policy. (In 1982, Reagan appointed Bork as a court of appeals judge and gave him the opportunity to directly rewrite antitrust doctrine.) For instance, in a 1979 decision, the Supreme Court, quoting Bork’s Antitrust Paradox and relying on his fabricated account of congressional intent, stated “Congress designed the Sherman Act as a ‘consumer welfare prescription.’”
Bork’s intellectual clout reflected a larger shift in judicial philosophy during the period. The big business-funded law and economics movement preached a particular brand of economic theory (aligned with Bork’s) through judicial training programs. They persuaded federal judges to protect the privileges of the wealthy and large corporations.
In applying the theories of Bork and his ideological companions, the courts and agencies (in a largely bipartisan project) lifted restrictions on corporate consolidation and freed dominant companies to engage in unfair practices to exclude rivals. Paired with this restoration of corporate prerogatives, the federal antitrust agencies and courts took a hostile attitude toward collective action by professionals and other independent contractors.
With functional similarities to its Gilded Age form, Bork-inspired antitrust helped recreate Gilded Age conditions. Due to few limits on consolidation and monopolization, markets and industries across the economy have become highly concentrated. This systemic market concentration means Americans pay more for essentials, earn less at work, and have fewer opportunities to start businesses. While the internet once promised decentralization and dispersal of power, Amazon, Facebook, and Google have established online bottlenecks over commerce, social media, and search and wield extraordinary power. Corporate power is not restricted to the marketplace: large corporations rule our politics. Their political preferences shape Congressional decision-making, while the views of ordinary Americans hardly register at all.
| “Antitrust law needs root and branch reconstruction. The government undoubtedly should challenge more mergers and monopolies.” |
As it defers to corporate power, the Federal Trade Commission, in particular, has applied Bork’s directive to root out collusion everywhere. It has sued associations of independent contractors (who, unlike workers in traditional employment arrangements, do not have an antitrust exemption) and attacked laws granting them collective bargaining rights. For example, it has targeted concerted activity among public defenders, home health workers, and music teachers. Workers in the gig economy have not been spared. The Federal Trade Commission and Department of Justice, partnering with the Chamber of Commerce in court, stopped Seattle from granting collective bargaining rights to Uber and Lyft drivers. In a 2015 blog post, an FTC official made clear in that these worker cases are not anomalies but represent agency policy—under a Democratic administration at that. The threat of antitrust investigations and lawsuits hangs over the organizing efforts of millions of workers.
Antitrust law needs root and branch reconstruction. The government undoubtedly should challenge more mergers and monopolies. A more aggressive enforcement posture, however, must be based on a rethinking of the prevailing philosophy of the field. Until this happens, the solidarity of ordinary people will remain in the antitrust crosshairs. In remaking antitrust, legislators and policymakers should renounce consumer welfare and promotion of competition (both ill-defined concepts) as objectives. Instead, they should embrace antimonopoly, which seeks to rebalance power rather than deepen existing inequalities.
What would an antitrust rooted in antimonopoly do? It would constrain the discretionary authority of dominant and near-dominant corporations to buy out and stifle competitors and control others and protect the right of workers, small businesses, and consumers to organize and build power. In this system, antitrust enforcers would make concentrated corporate power, not the cooperation of the powerless, their target.
Like in the first Gilded Age, antitrust enforcers in our present Gilded Age are hitting labor, not capital. They have tolerated the growth of corporate behemoths and attacked the solidarity of working people. While Robert Bork did not become a Supreme Court Justice and make law sitting on the highest court, he still changed the structure of our society. By exercising influence during a time of reaction against the New Deal, he left a legacy of corporate domination of the economy and politics that will take democratic vision and public determination to overcome.
Sandeep Vaheesan is the legal director at the Open Markets Institute. He previously served as a regulations counsel at the Consumer Financial Protection Bureau, where he helped develop and draft the first comprehensive federal rule on payday, vehicle title, and high-cost installment loans.
The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy.
