Monopolized: Life in the Age of Corporate Power

"Speaking as someone who wrote a book about monopolies , telling the monopoly story is really hard. The ways that monopolies extract income (rent) from the rest of us is performatively complicated. Some things are hard to understand because they’re complicated, but, very often, things are complicated specifically so they will be hard to understand. Think about the Great Financial Crisis and the way that collateralized debt obligations, synthetic collateralized debt obligations, and derivatives of collateralized synthetic debt obligations all work. They were complicated so that you would not be able to understand them. The term in finance is MEGO, which stands for My Eyes Glaze Over. The idea behind it is that if you give a mark a prospectus that’s thick enough, they will assume that there’s something good in it. If you have a pile of shit that’s big enough, there must be a pony underneath it. Dayen pulls these apart in a way that is very entertaining, and he does it sector by sector. He’s got a very good throughline. In one part, he writes about military procurement, which seems to be a very weird and esoteric area. The US military builds a lot of jets. It relies on four primary aerospace contractors, such as Boeing, to build those jets, and then it services the jets in-house. I live in Burbank, which is a city basically created by Lockheed Martin, one of these primary contractors. When we bought our house, we got a letter from the council saying: “When Lockheed Martin left, they left a bunch of unmarked fuel depots. If you find out that your yard is full of cancer, just let us know, because we’ve got this trust fund. We will come and remove all your dirt and give you some clean fill.” Support Five Books Five Books interviews are expensive to produce. If you're enjoying this interview, please support us by donating a small amount . These primary contractors rely on secondary contractors to build the components. Some private equity weirdos got together, and they did a research project to identify all the single-source component manufacturers. The private equity weirdos bought every manufacturer who makes a widget that no one else makes and they rolled them up into a single firm. Then, they reduced the price for primary aerospace contractors to below cost. As many of these widgets as possible are now appearing in the materiel owned by the US Air Force, US Army, and so on, and they charged Uncle Sucker a 25,000 per cent markup on replacement parts. It’s such a scam! Abraham Lincoln refused to buy guns for the Union Army unless they used interoperable tooling and ammunition, specifically because he was worried about this shit. But here we are, in the 21st century, building billion-dollar fighter jets without the nous of a guy who learned to practice law while ploughing his dad’s field. It’s incompetence that must be deliberate. Once is accident; twice is coincidence; three times is enemy action. They have bought these jets more than three times—many more. Dayen says that even if you hate American imperialism and know that the only thing those jets are doing is bombing Yemenis , it doesn’t matter. In addition to the sins of those American jets, there’s also the fact that a bunch of people out there are getting unbelievably rich and using that wealth to corrupt our public processes, including by demanding that America fight in more wars. This requires building more airplanes, and they’re doing it through this scam. Dayen lays it all out in a very relatable way. He takes this performatively complicated material and opens the outer shell of the matryoshka. He removes the next shell, and the next, until he gets to the middle, and he says, “Do you see? There’s nothing good in the middle. If you keep on unwrapping it, it’s a pile of shit in the middle.” It’s really quite masterful. Dayen is a great researcher, writer, and investigative journalist—he’s the current editor-in-chief of The American Prospect , which is a wonderful magazine. He’s a great writer on many subjects but on monopoly, I think he’s one of the best. Chokepoint Capitalism is about labor markets in the creative industries, but it’s mostly a book about market concentration . You can’t talk about labor markets in the creative industries without talking about the fact that we have five publishers, four studios, three labels, and two ad tech companies that are also app companies. One of them is the same company that does all the audiobooks and e-books. That is the result of deliberate policy choices that arise out of a right-wing doctrine called consumer welfare, that says monopolies are beneficial because they allow the latent giants who walk among us–heroes from Ayn Rand novels –to run big enterprises better than any normal human being could. Think of the way that weirdos worship Elon Musk. “I think that we underrate solidarity” That is how we got to this place. It’s not a mystery how these companies grew to the scale they’re at. The way that Universal, Warner and Sony became the three labels that control 70 per cent of all sound recordings and 65 per cent of all compositions was not by investing in the best music that other people didn’t have the vision to invest in; they used their access to capital markets to do anticompetitive acquisitions. The reason we did not enforce black letter law to prevent those acquisitions—such as the Clayton Act or the Sherman Act—was because of this right-wing doctrine that came out of the Reagan era, has spread all over the world and is at breaking point. It is finally reaching the point where people are no longer willing to tolerate it. In the UK, you have the Competition and Markets Authority taking very muscular action, and in the European Union, you have the European Commission. Here in the United States, there’s the Federal Trade Commission. Congress has introduced bipartisan legislation, co-sponsored by Ted Cruz and Elizabeth Warren, to break up the ad tech giants. Canada, where I’m from, has the world’s least fit-for-purpose competition law, which allows for the most grotesque anticompetitive mergers. They are finally reopening the question of whether that law is fit for purpose and contemplating amendments to it. There is, at least, some progress in the frozen north."