On Bigness and Reform

“The continuing survival of classical (economic) beliefs protects business autonomy and its income and serve to obscure the economic power exercised as a matter of course by the modern enterprise by declaring that all power rests, in fact, with the market.” — John Kenneth Galbraith

Michael Sandel is a professor at Harvard, who is distinguished in the last few years for one reason; he’s written on the history of American liberalism, particularly its economic roots, from an American perspective. In a new piece, he points out how until a few decades ago, American politicians weren’t so deferential to concentrated economic power. To which one can only reply, “Who would have thought?” Today, it seems groveling to concentrated economic power is a prerequisite for elected office. Nonetheless, Sandel shows how it was in the American tradition for both parties to not simply be suspicious of concentrated economic power, but actively hostile. But after WWII, this changed. The reasons for this were plenty, but an essential one was European Bismarkianism slipped into American politics, and centralized economic power became a way to provide general welfare through a centralized state.

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In liberal or progressive circles, the replacement of American economic egalitarianism with Bismarkian welfarism became so total as to rarely be debated. Today, there is certainly no organized political force promoting American economic egalitarianism. In fact, it’s so off the radar, after writing a nice piece about the importance of confronting concentrated economic power in American history, Sandel throws in his lot with the Bismarkians, concluding,

Social-welfare liberalism seems a more practical doctrine than the anti-bigness version of earlier progressives. It is hard to imagine how to break up the large financial institutions and corporations that dominate modern economic life.

I find this dumbfounding. Contrary to Sandel’s notion of finding it hard to imagine, it is more accurately a critical lack of imagination, at a time when a continued dearth of imagination will sink us. Concentrated economic power is what is failing America. It is in fact anti-American — anti-democratic-republican. We need to begin reviving the American system by breaking up power. You don’t even need an imagination; the break-up of AT&T in the early 1980s created more economic vitality, allowing the Internet to flourish, than any other government act of the past three decades. Even more exciting is that the Internet has shown new avenues for creating distributed network order — that is, ways to start thinking about 21st century democracy and revitalizing the distributed American system, with power distributed in the states, counties, local governments, associations, and the citizen. Real reform in America starts with the breaking up of failed power.  More than imagination, it requires political will and courage.

Joe Costello was communications director for Jerry Brown’s 1992 presidential campaign and was a senior adviser for Howard Dean’s effort in 2004.