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“Who’s the Octopus Now?”
April 23, 2024
Leave to economic historian Amity Shlaes to put our 21st century’s version of class warfare into historical context.
In The Coolidge Review, Shlaes takes President Biden’s chief architect of his progressive antitrust policies, Tim Wu, to task for abusing history to advance bad policy.
Shlaes elegantly dismantles Wu’s heroic retelling of the trust-buster era. The trust men’s dominance arose not from abuse of laissez faire capitalism, but from their manipulation of tariffs “tailored to the preferences of the giants, that raised prices of basic goods for farmers and workers, right down to prices of tin plates.” I would add that much of the power of the trusts also came from the outright corruption of Congress and state legislatures. It was government dysfunction, not a failure of the market, that made the trusts so dominant.
Shlaes points out that the railroads in the early 20th century getting hit with antitrust actions as “trucking waited just around the bend.” That is good to remember as Big Tech, bolstered by network effects, awaits sure disruption from some AI-inspired new technologies we cannot yet imagine.
I’ll leave it you to read the rest of Shlae’s clever piece. But I must quote her best line well suited to the age of Wu and Khan. When J.P. Morgan met with Teddy Roosevelt in the White House, the president likened trusts to a scheming octopus. Shlaes speculates that it must have crossed the mind of J.P. Morgan as he listened to the president’s bombastic lecture: “Who’s the octopus now?”
Shlaes thus strikes at our current danger: “To be sure, those who advocate a vast expansion of federal antitrust powers haven’t managed to win those power. But give them time. Though the courts have – for now – frustrated her, Federal Trade Commission chair Lina Khan is the most radical commissioner in recent memory.”
For all the assault on “bigness” by Biden’s regulators, we should look at the breathtaking ambition of modern progressive antitrust as the coiling tentacles of the Washington Octopus, the ultimate Cephalopod predator.