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The Curse of Bigness

Antitrust in the New Gilded Age

By Tim Wu
19-minute read
Audio available
The Curse of Bigness: Antitrust in the New Gilded Age by Tim Wu

The Curse of Bigness (2018) deals with topics and questions that have become especially pressing in recent times. How and why have markets become dominated by a handful of corporate giants? And what can we do about it? To answer these questions, the author recounts the political, economic and legal history of economic concentration. Along the way, he examines the dangers that come with it, and how they can be mitigated.

  • Citizens worried about unchecked corporate power  
  • People interested in the intersection between politics, economics and law
  • Late-nineteenth and twentieth-century US history buffs

Tim Wu is a professor at Columbia Law School. He was formerly a senior advisor to the US Federal Trade Commission, a senior enforcement counsel at the New York Office of the Attorney General and a member of the Obama administration’s National Economic Council. As a policy advocate, he is best known for the phrase "network neutrality," which he coined in his influential 2003 paper, “Network Neutrality, Broadband Discrimination.” He is the author of The Master Switch and The Attention Merchants.

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The Curse of Bigness

Antitrust in the New Gilded Age

By Tim Wu
  • Read in 19 minutes
  • Audio & text available
  • Contains 12 key ideas
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The Curse of Bigness: Antitrust in the New Gilded Age by Tim Wu
Synopsis

The Curse of Bigness (2018) deals with topics and questions that have become especially pressing in recent times. How and why have markets become dominated by a handful of corporate giants? And what can we do about it? To answer these questions, the author recounts the political, economic and legal history of economic concentration. Along the way, he examines the dangers that come with it, and how they can be mitigated.

Key idea 1 of 12

Economic concentration arose in the Gilded Age and culminated with the creation of monopolies.

The story of economic concentration began in the Gilded Age – the period of American history that ran roughly from the 1870s to 1900. In recounting this story, we will focus primarily on developments in the US, which exemplified the trends that were unfolding in industrialized economies all over the world.

At this time, the overall trend could be described as economic concentration on steroids. During the Gilded Age, the industrialized economies became tremendously concentrated, as one company after another merged into larger and larger corporations. These were called trusts. Between 1895 and 1904, about 2,274 American manufacturing companies consolidated into just 157 trusts.

Many of those trusts became dominant players within their particular industries. Out of the 93 major consolidations of the era, 72 of the resulting trusts captured market shares of more than 40 percent, and 42 of them reached more than 70 percent.  

Beyond those heights, the most dominant of the dominant trusts became monopolists. A monopolist is a company that has gained almost total control over an entire industry – a condition that is called a monopoly. The word “monopolist” can also refer to the leaders of those monopolistic companies.

By the early 1900s, trusts formed monopolies in nearly every major industry in the United States. Their domains included steel, shipping, railroads, telecommunications, oil, cotton, tobacco, sugar and rubber. The largest monopolists of the Gilded Age became the most famous names of the era, such as John D. Rockefeller’s Standard Oil and Andrew Carnegie’s Carnegie Steel Company. These men became two of the wealthiest individuals in history, with fortunes worth over $300 billion each, when adjusted for inflation.

However, the most successful monopolist of them all was the banker JP Morgan, who achieved monopolies in a range of industries. These included the Northern Securities Company (a railroad trust), the International Mercantile Marine Co. (a shipping trust), AT&T (a telecommunications trust) and US Steel, a steel trust that he formed by fusing together hundreds of steel companies and then buying out his chief rival, the Carnegie Steel Company, in 1901.

Together, Morgan, Carnegie and Rockefeller became the main proponents of the pro-monopoly trust movement, which we’ll look into next.

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