WHAT HAPPENED TO THE SHERMAN ANTITRUST LAW OF 1890?

John Sherman Author of The Sherman Antitrust Law

 

Over the past decade or so I have often felt as if I was the only one paying attention in my High School American History Class and just to be fair it might be a fairly accurate assumption given the immanent call of the  wild that kept even the most devoted student a bit distracted from the studious rigors of “Superius Educationis”.  But just for the sake of gentlemanly argumentation I will briefly revisit that yellowed photograph of the mid 1970’s in Father Brogardus’ American History class, specifically to the amber negative of the day we discussed; the Sherman Antitrust Act. 

 

On July 2, 1890 Senator John Sherman, an Ohio republican was fortunate to see the bill he authored turned to law.  Basically the Sherman Antitrust law was enacted to ensure that there would be a healthy climate of competition in the busting American economy.  The act made it difficult for the large monopolies which characterized The Gilded Era to wipe out competition by buying it out or bankrupting it through other means.  The Sherman Antitrust Act ushered in the era of the great workers unions protecting the individual rights of workers from the unscrupulous greed of large companies and corporations focused more on profit than human rights. 

 

Much of the hard-earned rights and protections the little man won during this time have been systematically erased by the modern republican congress since Ronald Reagan in 1980.  In cities like Washington, D.C. and Manhattan the cost of real estate and the costs of starting up and running a small business are out of the reach of the average, hardworking American, only large chains and franchises can afford to open businesses.  Entrepreneurs who might have otherwise been gifted to watch their visions blossom are perpetually locked out of the competitive commercial market by the ubiquitous icons of commercial mediocrity.  Nobody should have to tell any American how the loss of small and family owned businesses in America has helped keep employment down.  It has forced everyone to work for a someone else who almost certainly does not have their best interest at heart.  The day of the American Entrepreneur is being hacked away by Big Business against which no one, especially not the small business man or entrepreneurial dreamer can compete. 

In large American cities family business and small privately owned businesses  that once populated the ground floors, basements and upper levels of nineteenth and twentieth century urban retail districts have virtually disappeared.  This is largely because the nineteenth century row houses and structures that once housed them, including living space in the upper storeys have been replaced by larger structures designed to max out commercial area and bulk at per square-foot leasing costs that represent many times what they had historically been.  The movement toward increased density has crossed over into residential districts as well where rising property values have demanded extra bulk for rental units so that property owners can afford to pay their own mortgages.  The result is that older, more generous accommodations are being hacked away and redesigned into smaller units at higher costs to the consumer.   One has only to tour the average condominium in a city like Washington, D.C. to see how apartment descriptions that read  like a suburban dream house sprawled over acres of land has been crushed into a small box with rooms barely large enough for a bed and living/dining rooms that reek of kitchen odours and sights, some even with balconies that barely fit one chair.  Large residential and commercial spaces are generally owned and managed by the same companies over and over again.  Small businessmen rarely have a chance at prime downtown real estate before these huge companies buy it up and in today's slower economy it is clear that they have the ability to float them while they remain vacant, sometimes for years at a time.  Who can compete with such madness that clearly does not follow the rules of competitive marketing.  In the old days someone who built a brand new office or apartment building would go bankrupt if it did not fill up immediately whereupon another buyer would purchase it and offer the space for more reasonable prices... In today's market wealthy corporate property owners are holding out for elusive retail and office tenants that financing banks thought would pay top dollar.  By floating these companies and bailing them out the entire spirit of free market competition is lost.  Much of corporate America has become nothing more than an elderly cow no longer able to produce milk but propped up in the barnyard to consume resources that might be better utilized by younger, healthier, more creative and viable cows... The cumulative result is that in every arena of the American economy consumers are being force-fed products that  mis-represent their actual quality and value in a controlled market where  price, quality and quantity are fixed by some corporate monopoly pretending to be competitive.

At the All-American Suburban Mall, the hallmark of American prosperity and consumerism the shopper will find that most of the retail establishments are owned by one or two mega-companies and their banks who systematically fix the prices of all commodities from a new t-shirt, to an electrical appliance right down to a new pair of shoes.  The ancient concept of  a shopping Bizarre, a magnificent array of one of a kind and similar shops with which one might wheel and deal finding ones own bargains has completely died in the malls.  Outside of a standard 10 - 20 percent manager discount any hopes of real price negotiation are dashed at the register.  Corporate policies, ironically the same policies crafted by corporate attorneys, governing every sibling company under its great corporate umbrella are nearly identical for a reason... "Price Control"!  If large corporations can control the price of commodities by owning all the stores forcing them to agree upon on uniform price it has always been what I have understood as, "Price Fixing",  "Collusion", both of which are illegal in this country or at least that is what I thought.  One has to ask if oneself if corporations ever considered that consumers would notice they were being railroaded by price-fixing or if they cared?  Do these companies believe that Americans are so brainwashed with mindless consumerism that they don't know or care that they are being harvested.  One has to ask the obvious question, “Why are these stores no longer owned by the original owners?”  "Why wold anyone want to create the artificial illusion that a business was independently owned when in fact it is only a cookie cut in a larger machine of centrally controlled retail establishments?" What happened to genuine competition and diversity in the marketplace?  What happened to that elusive but compelling element that truly made capitalism an amazing phenomenon? 

Residential developments in the suburbs are also affected by corporations who buy large tracts of land and artificially inflate the prices of dwellings offering less for more in spite of obvious economic indicators that show consumers are being pinched at every turn and cannot actually afford the commodities they will ultimately be financially locked into for the rest of their lives.  Consumers who might save money having a home custom built, negotiating prices with architects, contractors and manufacturers and doing some of the logistical work themselves are outwitted at every turn.  Few consumers have time or focus to mange such an enterprise and all the good land is already swallowed-up by large developers anyway. 

These are "Paper-Value" times, when virtually everything is not actually worth its cost or value on paper... In a healthy economy this might be sustainable as long as the paper value was not hundreds of times greater than its worth as it is today.  Americans have to take a history lesson again.  They have to question why they are paying so much for so little and they have to question the source of the price point itself!  A few years ago when what has been called by some, an artificially induced fuel oil shortage, large corporations were able to justify raising the price point for every commodity in the economy on a global level.  City dwellers who have experienced the rise in rents, taxes and every price point from paper to food  and to the clothes on their backs during times of economic hardship know that something is fundamentally wrong.  Who raises prices of commodities when they know people are having greater trouble paying bills due to income freezes, lay-offs and unemployment?  Is this logical?  One criticism of and challenge to the classic but now virulent concept of supply and demand is that if you know a product is in high demand and you know you have plenty of that product why artificially and arbitrarily raise the price when you know you have a sure thing?  The answer is greed!  Greed is why it is so very important to cultivate a competitive free market and to sanction companies that grow large enough to single handedly fix the prices of any commodity making it impossible for a competitor to offer lower prices that may represent a lower profit and actual value.  Although the task of managing corporate growth is a tedious and artificial thing in nature lending itself to bias with regard to what companies get regulated at what times "et omnes" it is a far better safeguard if managed properly to ensure salvation from economic imperialism or even communism... I do not use the term "communism" to infer that communism is bad or that those who believe in it are evil, but lets face it, communism is not the American way at all!  Capitalism is a concept which, like communism has come to a point at which it must be revised in order to remain viable in a global market with no possibility of physical expansion.  When the robber barons of the Gilded Era practised capitalism, manifest destiny was a real expectation.  There are no more unexplored continents and populations to exploit, mankind had maxed his occupation of this planet out!  If capitalism does not reinvent itself in ways that do not choke the life out of consumers it will fail!  The problem is not just American it is global and will take perhaps many decades to play itself out.  In the final screenplay we will discover that on this finite planet there are a finite amount of resources which, when managed effectively can allow everyone to live and compete in a healthy free market.  America is a hallmark of how humans can choose to free themselves from tyranny, it has played itself out many times in our short but brilliant history.  The first time America rose up against political slavery, the second time it was against human slavery and the next time, in our lifetime it might well be against economic /corporate slavery...

When one or two corporations own everything it’s like living in the historic communist U.S.S.R. where the state owns and issues everything at a standard rate.   It can be argued that by manipulating the type of diversity in the economy i.e., the range of the price point relative to any given commodity or service we are growing close to that archaic Russian model.  Free market capitalism must remain free even if it begins to look, taste and smell like communism?  I think not!  this is all the more why it is vital to closely monitor the size and influence of competitive business not as a means of exerting biased growth limitations upon them while allowing others to grow but as a uniform practise that does not insult the intelligence of the American consumer.  Why are we allowing companies to make our choices for us?  Why are we allowing unique, interesting and superior products, companies and ideas vital to the growth of the American economy to be lost in an economic wasteland of what ifs because they cannot be cultivated by small competing businessmen without being controlled by huge corporate interests?  Why is congress not enforcing The Sherman Antitrust Law?

Late Nineteenth Century Cartoon of an American Robber Baron

 

Every American should try to answer, "What happened to The Sherman Antitrust Law of 1890 and why is congress not enforcing it?"  Every American who is unemployed and has viable ideas for a new business but no start-up capitol to compete with established business chains who choke out the competition needs to hold their elected politicians accountable!  Capitalism is The Great American Way of life but it is being threatened by the Robber Baron economy of the 21st century, a Keynesian nightmare of mid nineteenth century flavor that is no longer viable in a global economy on a planet in which humans have already maxed out potential for geographic expansion as a catalyst for economic growth...  Wake up Americans this is not the socioeconomic reality envisaged by the framers of the constitution!  It is an affront to the very idea of economic freedom, fairness and diversity!

 

Written by David Vollin