The resurgence of antimonopolism in progressive policy over the past decade has been based on a critical misreading of the history of the New Deal state that emphasizes the fight against big firms. In fact, government regulation of prices and wages across entire industries and the economy—through public rate-setting, progressive income taxation, and union-friendly policies—was always far more important than antitrust litigation to an agenda that delivered record equality after World War II.
Attempts by antimonopolists in the Biden Administration to turn a campaign against monopoly—and the promotion of its inverse, competition—into the cornerstone of the progressive fight against economic inequality produced a set of quixotic initiatives. A Rube Goldberg plan to compete drug prices down by importing drugs from a country that directly sets their prices Canada never got off the ground.
Another victory in an effort to use antitrust to help the average worker served only to protect the seven-figure royalties of bestselling authors like Stephen King. The average American worker or consumer would be hard pressed to identify any personal financial gain from four years of progressive antimonopoly policy. Looking forward to or , one way to do that would be to strive for a goal that even the New Deal state did not achieve: the creation of a universal price regulator along the lines proposed by Teddy Roosevelt in The first step is for progressives to rediscover the concept of economic rents, which served as the intellectual basis for the price and wage regulation of the New Deal state.
Rents explain why, for the original progressives, antimonopoly policy was always an afterthought—and should be for progressives today as well. Scholars belonging to the original Progressive movement of a century ago understood that markets as such—and not just monopolized markets or big firms—are the source of the inequality that characterizes industrial economies. Antitrust was absent. Rent, in other words, is the share of revenue that does not actually need to be paid to firms to ensure that they will produce.
It can be taken from the firm and given to anyone without discouraging production, by definition. It follows that owners have no special claim to rent, but because they control firms, they can usually keep rent for themselves.
