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Trust Busters 

Why strengthening antitrust policy is essential to our economic well-being

click to enlarge CALEB WALSH ILLUSTRATION
  • Caleb Walsh illustration

I come from a tradition of independent business owners on both sides of my family. Grandpa Harvey quit working at a JC Penney in small-town Montana when it refused to honor the Depression-era tradition of selling goods to farmers on credit until their next harvest came in. He opened Bryan's family-run department store across the street, which outcompeted what became JC Penney and proudly serves the community to this day.

click to enlarge mariahmckay.jpg

On the other side of the Rocky Mountains, Grandpa Bob bootstrapped McKay Shows Carnival out of an early Spokane watch repair and novelty shop called "The Museum." As watches became mass-produced, he opened Fun and Fancy, selling knickknacks to furnish school carnivals with prizes. With his mechanical genius for repairing old equipment and requests for games, rides and other amusements, he was able to acquire enough attractions to operate multiple carnival routes traveling throughout the Northwest.

As I look back on my grandfathers' ventures, it's hard to ignore the profoundly different conditions under which our economy operates today. In the 1980s when I was born, independent retailers supplied about half of the goods Americans bought in stores; today's census data shows that share has shrunk to about one-quarter. Across sectors, the Brookings Institution reports that "the number of business deaths now exceed business births for the first time in the 30-plus year history of our data." By most measures, it is more difficult to start and run your own business today than it was just a few decades ago.

What happened?

While forces such as technological change and globalization have received a lot of attention, another underlying factor exerts additional downward pressure on American small business: the systemic exercise of anticompetitive market power by dominant megacorporations. Now that a plutocrat has seized the presidency, installing a corporate caste of millionaires and billionaires to oversee key functions of government, it is time to dust off and revisit American antitrust laws.

For starters, meet the Robinson-Patman Act. Passed in 1936 with the explicit goal of preventing powerful interests from using their size to game markets and stomp out competition from smaller businesses, this clearly defined legislation resisted reinterpretation for decades. In the '80s, however, antitrust enforcement took a bipartisan turn for the worse. The Department of Justice and Federal Trade Commission abandoned enforcement of the law, favoring faulty criteria of "market efficiency" over fair market access when reviewing applications for mergers and acquisitions.

The results have been devastating. For example, nearly 80 percent of local economic development dollars provided through the federal farm bill now benefit the top 10 percent of agricultural producers. State and federal tax laws further exacerbate competitive disadvantages for small businesses. The larger that big business becomes, the better able it is to defend its market position and buy additional preferential treatment.

Small businesses are engines of innovation in our country. Their viability is an indicator of the degree of economic opportunity that exists in a society. Contrary to common assumptions, they are actually able to offer goods and services more efficiently because of their nimble size, not in spite of it. It is time to demand higher standards in antitrust enforcement to allow a larger variety of small businesses to flourish. The prosperity of our grandchildren depends on it. ♦

Mariah McKay is a fourth-generation daughter of Spokane and a community organizer campaigning for racial, social and economic justice. She currently serves as a public health advocate.

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