End of the line for Reaganomics
Reagan turned the country upside-down, in a very bad way. The “Reagan revolution” was indeed revolutionary (or, rather, counter-revolutionary), reversing a half-century of progress on social safety nets, workers’ rights, and environmental protections.
When we take stock of the Reagan years, we tend to focus on the actions that had immediate effect, like dismantling labor protections or the racist, homophobic refusal to confront the AIDS pandemic.
But for my money, the most profound act of the Reagan revolution was a slow-burner that has quietly chugged along for four decades, profoundly reshaping American society and the world. It’s a wonky, technical change, largely overlooked in our political discourse.
That change? The “consumer welfare” theory of antitrust enforcement.
Prior to Reagan, US antitrust enforcers relied upon a theory of “harmful dominance,” cracking down on monopolies when their scale allowed them to hurt workers, or the environment, or suppliers.
Harmful dominance is the theory that unaccountable power is dangerous — that giving corporate leaders control over the market lets them pervert the political process and inflict harms on the rest of us in ways that are hard to detect and even harder to prevent.
That principle created a policy that was designed to keep companies weaker than the democratically accountable state, rather than allowing them to grow so large that the could capture their regulators and start to write their own regulations.
Reagan nuked “harmful dominance,” replacing it with radical theories from one of Nixon’s top crooks, Robert Bork, whose book THE ANTITRUST PARADOX advances a conspiracy theory about US antitrust — that the framers of these laws never meant to protect us from monopoly at all.
Bork said that a the true purpose of antitrust law was — and always had been — “consumer welfare.” He said that so long as a monopoly didn’t use its market power to raise prices, that was fine -even if its scale let it screw workers, or suppliers, or whole communities.
This was a profound shift, because under “consumer welfare,” companies were allowed to grow big…