by Barry C. Lynn and Phillip Longman published in the Washington Monthly
The National Review recently described Bernie Sanders and Donald Trump as “two populist peas in a pod.” This was not a compliment. Across the political spectrum, people stick the “populist” label on politicians they see as exploiting the worst resentments and envies of some tribe or another. The segregationist George Wallace, by this reckoning, was a populist. So, too, Jean-Marie Le Pen.
Yet there is a richer tradition of populism in the United States that has new relevancy today. The term itself dates to the early 1890s, when, as the historian Michael Kazin notes, journalists used it to describe members of the newly formed People’s Party. These Populists with a capital P were men and women who, like us, faced an America in which monopolists were fast tightening their grip on all realms of the economy and concentrating immense wealth and political power.
These first Populists drew upon a political philosophy with roots back to the American Revolution. Part of this tradition is familiar—a belief that government must be run by the people. Populists called for direct election of senators and led the push for referendums and initiatives to bypass corrupt legislatures. But another part is largely forgotten—that the people are sovereign over the economy and have a responsibility to structure markets to promote the common good.
This was the “democratic republicanism” of Thomas Jefferson and James Madison. It holds that, just like political power, economic power must be distributed as widely as possible. Thus, the Populists focused much of their energy on combating efforts to monopolize commerce and natural resources, especially land. They also closely studied how to govern large corporations, and strongly supported unionization of workers and farmers to counter the power of concentrated capital.
In almost every key respect, the Populists succeeded in their revolution. In 1896 they captured the Democratic Party and ran William Jennings Bryan for president. He lost the election, but over the next sixteen years, even as the plutocrats tightened their grip, Bryan helped keep the fires of rebellion burning.
The turning point came in 1913 when Democratic President Woodrow Wilson, guided closely by future Supreme Court Justice Louis Brandeis, enacted key parts of the Populist agenda, modernizing anti-monopoly law, creating the Federal Reserve System, and reforming trade policy. It was these years that teed up the achievements of the 1930s, when the administration of Franklin Roosevelt and Populist members of Congress like Wright Patman carried anti-monopoly principles back into almost every realm of American life.
By the 1960s, the anti-monopoly movement championed by the Populists existed no more, but largely because it had become thoroughly institutionalized. In 1962, the Supreme Court upheld an antitrust case, brought by the Eisenhower administration, that prevented the merger of two shoe companies because it would have given a single distributor a 2 percent share of the national market.
It is important to understand what the Populists were not. In 1892 they did call for public ownership of railroads, but the movement generally looked askance at “socialistic” actions that might undermine wide-scale ownership of private property. Populists also parted company with those who, like Teddy Roosevelt, argued that the way to control Big Business was to regulate it with Big Government. Populists did favor using the federal government, but mainly to break up monopolies so as to make them small enough to be regulated by competition in open markets.
Some historians have judged all Populists by the actions of a racist minority. It is true that one early Populist leader, Tom Watson, later became one of the most virulent segregationists and anti-Semites in American history. And Woodrow Wilson himself segregated the U.S. government and U.S. military. But most Populists kept their focus on restructuring the economy to better promote equality and democracy. In many regions, Populists pioneered inter-racial organizing, often drawing the ire of established political groups. In one county in Texas, Democrats formed a “White Man’s Union” specifically to combat the alliance of whites and blacks in the local People’s Party.
In the late 1970s, policymakers in both parties, under the banner of “free markets” and “deregulation,” began dismantling the highly successful economic regime put in place by the Populists.
In the late 1970s, policymakers in both parties, under the banner of “free markets” and “deregulation,” began dismantling the economic regime put in place by the Populists and their followers. The concentration of wealth that resulted is now so extreme that even the Economist has chided Americans for failing to stand up to monopoly.
The Populists would certainly have supported Sanders’s call for public financing of campaigns and his embrace of “Break Up the Banks.” But the men and women who rose against America’s oligarchs of a century ago would have been deeply dismayed that no candidate in 2016 has taken a strong stand against monopoly.
And so we ask: If a candidate for office in 2016 were truly guided by traditional American Populist principles, what would he or she aim to do?
1. PROTECT DEMOCRACY BY RESTORING MARKET COMPETITION
In the campaign of 1912, Woodrow Wilson made one of the most powerful attacks on monopoly in American history. Wilson condemned monopolists for harming not only the economy but also democracy. “If monopoly persists, monopoly will always sit at the helm of the government,” Wilson said. “[W]hat we have to determine now is whether we are big enough, whether we are men enough, whether we are free enough, to take possession again of the government which is our own.”
Here is the Populist philosophy of competition at its purest. To ensure the liberty of the individual and protect democracy, citizens must force the powerful to compete. Adam Smith’s economics plays a role. But it is the stark realism of Jefferson and Madison, with their intense distrust of concentrated power, that governs. The fundamental aim of government is to extend the system of checks and balances to the political economy, and to break or neutralize all big concentrations of private power.
As Senator John Sherman, author of the Sherman Antitrust Act of 1890, put it, “It is the right of every man to work, labor, and produce in any lawful vocation and to transport his production on equal terms and conditions and under like circumstances. This is industrial liberty, and lies at the foundation of the equality of all rights and privileges.”
In this tradition, breaking up monopoly has little to do with promoting efficiency or better deals for consumers, and everything to do with protecting political equality, self-government, and democratic institutions. As Brandeis explained, “The doctrine of the separation of powers was adopted . . . not to promote efficiency but to preclude the exercise of arbitrary power.” The way to “save the people from autocracy,” he said, is precisely by building “friction” into the system.
Over the following decades, these principles guided how Americans distributed economic power and protected industrial liberty. Despite wave after wave of technological change, concentration declined in almost every realm of the economy.
But in the 1970s, a small group of intellectuals—some, like Alfred Kahn, with roots in mainstream liberalism; and others, like Robert Bork, with roots in conservative Chicago school economics—systematically targeted the achievements of the Populist tradition. While anti-monopoly laws remained on the books, they were reinterpreted in ways that defeated their historical purpose. No longer would the aim be to promote economic and political liberty. Instead, according to guidelines enacted in 1982 by Ronald Reagan’s Justice Department, big corporations would be allowed to get bigger so long as they did not immediately hike prices to the “consumer.”
In retrospect, the evidence is close to irrefutable that adoption of this philosophy of “efficiency” unleashed a process of concentration that over the last generation has remade almost the entire U.S. economy, and is now disrupting our democracy.
What would a True Populist do today? Immediately restore America’s traditional anti-monopoly philosophy, most importantly in the guidelines that determine how enforcers view the purpose of these laws, and start breaking up today’s monopolies.
2. USE TRADE POWER TO RESTORE AMERICAN INDEPENDENCE
The Boston Tea Party, every schoolchild knows, struck a blow for America’s independence from Britain. Less well known is that the Tea Partiers were specifically protesting domination by corporations.
As Samuel Adams and John Hancock put it in a 1773 letter, the Tea Act was dangerous precisely because, in giving a huge tax break to the British East India Company, it was “introductive of Monopolies which, besides the trains of evil that attend them in a commercial view, are forever dangerous to public liberty.”
For the next 200 years, these twin goals—independent citizens in an independent nation—shaped America’s trade policies. The basic aim was to protect the freedom of action of the United States and of individual Americans. The method was to break or deflect the power of all foreign state-directed, or “mercantilist,” trading systems. The principles were those of anti-monopoly, extended to the international sphere.
Populists opposed any permanent tariff wall that would reinforce the power of domestic monopolists. At the same time, they were aware, as were Americans of all stripes, that monopoly abroad was just as big a threat as monopoly at home. That’s why both Democratic and Republican presidents straight through Ronald Reagan aggressively used everything from temporary embargoes to temporary tariffs and quotas to disrupt attempts by trading partners to monopolize control over any vital manufactured good.
But starting in the 1990s, the U.S. largely abandoned any effort to use trade policy as a weapon against monopoly. Instead, in joining the World Trade Organization (WTO), the Clinton administration and Congress effectively outsourced the making of trade policy to a body dominated by immense international trading companies. Even when headquartered in the United States, these giants have little inherent concern for the independence of America as a nation or of Americans as individuals.
As a direct result, America today has been made to rely on single offshore sources for many of the basic goods we use every day. In the case of democratic allies like Japan and Germany, the risks of such dependence are limited. In the case of China—which now controls production of most or all of U.S. supplies of many vital drugs and electronics—the threats to U.S. political sovereignty are potentially immense.
Populists were aware that monopoly abroad was just as big a threat as monopoly at home. They applied the principles of anti-monopoly to international trade.
Almost as shocking, recent U.S. administrations have allowed foreign state enterprises to essentially rule large swaths of the U.S. economy, and many of the people who work in those industries. Control of America’s big beer, beef, and processed food sectors, for example, is increasingly in the hands of Brazilian state corporations like Anheuser-Busch InBev and JBS. Chinese state corporations control much of America’s pork supply, and have gained leverage over Hollywood’s cultural production through control of AMC theaters.
What would a True Populist do today? Not erect protectionist tariffs like those proposed by Donald Trump. Nor simply bad-mouth the Trans-Pacific Partnership trade agreement. A True Populist would abandon the WTO and apply the principles of anti-monopoly to international trade, to protect America and Americans from all foreign monopoly.
3. BAN PRICE AND DATA DISCRIMINATION
By the time the Populists took their stand, Americans had been fighting railroad tycoons for a generation. The problem, in their eyes, was not merely that the railroad monopolists charged too much. It was that these absentee corporations had the power to control, through the common railway practice of charging different people different prices for the same service, whether they and their communities succeeded or failed.
Charles Francis Adams Jr., the grandson of John Quincy Adams and son of one of the founders of Abraham Lincoln’s Republican Party, helped lead the railroad reformers. Adams described the practice of price discrimination as “favoritism of the grossest character,” which turned the railway into “a law unto itself.” The fortunes of even large cities including Philadelphia, Baltimore, St. Louis, and Cincinnati rose and fell according to how various railroad financiers, or “robber barons,” set their rates.
Some observers called for public ownership of railroads, pointing to the model that since ancient times has applied to most roads and highways. Most reformers, however, settled on an all-American approach that combined private ownership of the railroad with strict bans on most price discrimination. Drawing on the legal tradition of “common carriage,” under which American and English governments had for centuries prohibited private carters, cabbies, and innkeepers from charging different prices to different customers, railroads would be banned from favoring some shippers and passengers over others.
The reformers generally recognized that railways should be allowed to offer different terms to different classes of goods—charging less, say, for timber than for manufactured goods. But they condemned all discrimination within any given class, which the railway scholar Arthur Hadley described as the “most serious evil.”
Many states formed railroad commissions to enforce this principle of nondiscrimination, which, as Adams put it, should aim to permit “an unchecked flow of travel and commerce, the continuation of which may with safety be calculated upon.” With passage of the Interstate Commerce Act of 1887, the principle became federal law.
By 1913, this approach to railway regulation was so successful that, once in office, Wilson and Brandeis began to extend common carrier rules to many other realms of commerce—from electricity to retailing. The very first lines of the Clayton Antitrust Act set out to eliminate “discrimination in price, services, or facilities.”
Populists passed laws that prevented railroads and other monopolistic corporations from favoring some customers over others. But today, price discrimination by monopolists is increasingly the rule.
Yet in today’s America, price discrimination by monopolists is increasingly the rule. In hospital care, insurance, seeds, cable, and even books and news stories, we see monopolists discriminating among producers and increasingly among consumers. And with the rise of Big Data, the ability of today’s biggest companies to discriminate profitably grows almost by the day. The one exception is telecommunications, where the FCC’s “net neutrality” rules have restored traditional order to large parts of the industry.
What would a True Populist do today? Immediately apply common carrier principles to every realm where we see monopoly combining with Big Data, and ban individualized price and data discrimination—against both the producer and the consumer—everywhere.
4. BREAK UP AMAZON, FACEBOOK, GOOGLE, AND COMCAST
By the time Woodrow Wilson took office, Americans had long since learned that simply outlawing price discrimination was not always enough to ensure that a monopolist in control of a vital service would treat all customers the same.
The lesson was driven home by the rise of Carnegie Steel and Standard Oil. In both instances, their bosses—Andrew Carnegie and John D. Rockefeller, respectively—had captured de facto control over the railways that carried their goods to market. In both cases this control enabled them to exclude their rivals from the market and thereby to concentrate power and control.
The result was a new focus on banning certain forms of “vertical integration,” as when a railroad buys a coal mine and then favors that mine in ways that harm other coal mines that depend on the railroad to get their product to market. The goal was to prevent the actions of the monopolist from being warped by any “conflict of interest.”
Into the 1970s, America had hundreds of populist laws to ensure that farming, banking, services, and light manufacturing would remain open to the smallholder and controlled by the community.
At the federal level, the first effort to draw clear lines between particular types of business dates to the National Bank Act of 1863, which limited bankers to “the business of banking.” But it wasn’t until around 1912 that Americans made a concerted effort to ban vertical integration by other private providers of vital services.
Now courts blocked big manufacturers from buying retailers and using them to exclude rivals, as in the American Tobacco case of 1911. And Congress used the Clayton Antitrust Act of 1914 (and later the Robinson-Patman Act of 1936) to prevent giant trading companies and retailers from leveraging each other’s power. And Congress and the Roosevelt administration in 1935 banned electrical utilities from investing in unrelated businesses like street trolleys.
When it came to production goods like cars or chemicals, enforcers largely allowed managers of a corporation to decide what manufacturing activities to bring in-house. But for corporations that provided vital services to other firms, enforcers all but banned most direct ties. Their goal, as with anti-discrimination laws, was to ensure that such vital middlemen treat every customer the same.
This practice remained in effect even after the overturning of most other traditional anti-monopoly law in the early 1980s. The Reagan administration pushed for de-integration of AT&T in 1982. The FTC in the 1990s continued to enforce clear lines of separation between drugmakers, drug managers, and drugstores. In 1998, the Clinton administration demanded the complete separation of Microsoft’s DOS business from its browser business.
But about fifteen years ago, the Bush administration dropped the guard against vertical integration. Since then Comcast, which distributes television shows, has been allowed to merge with NBC, which produces shows. Amazon, the dominant retail marketplace for books, has been allowed to go big time into publishing books. And Google, which dominates search, has been allowed to compete directly with companies like Yelp, which rely on Google’s search engine.
What would a True Populist do today? Break up Amazon, Facebook, Google, Comcast, and any other essential network monopoly by banning them from owning companies that depend on their services.
5. LOCALIZE BANKING, RETAIL, AND FARMING
The spirit of America, Woodrow Wilson wrote in 1913, lies in “the enterprise of the people throughout the land. . . . [I]f America discourages the locality, the community, the self-contained town,” he said, “she will kill the nation.”
Wilson’s localism was not simply nostalgia for an age of general stores and town wheelwrights. Instead he was articulating a core principle of “democratic republicanism.” This holds that to be truly free, the citizen must be independent and self-governing, and must share equally in ruling a political community that controls its own fate.
A century ago, both the citizen and the community were under grave threat. Giant corporations increasingly determined how the farmer and skilled laborer worked and lived, and distant lords wielded growing sway over the local community. Just as Wilson took office in 1913, the Woolworth’s chain store corporation opened an immense office tower in Lower Manhattan. Here was a physical manifestation of concentrated power, the wealth of hundreds of American communities piled into the tallest structure on earth, on Wall Street.
True Populists would be appalled that most of the work of the federal government is today outsourced to contractors, whose employees outnumber the ranks of actual government workers by nearly fourfold.
Louis Brandeis, in 1933, described the threat posed by such giants. Speaking of the authors of an anti–chain store law, he said, “They may have believed that the chain store, by furthering the concentration of wealth and of power and by promoting absentee ownership, is thwarting American ideals; that it is making impossible equality of opportunity; that it is converting independent tradesmen into clerks; and that it is sapping the resources, the vigor and the hope of the smaller cities and towns.”
Beginning under Wilson and continuing into the 1970s, Americans passed hundreds of laws to ensure that farming, banking, services, and light manufacturing would remain open to the smallholder and controlled by members of the community. These included the Packers and Stockyards Act of 1921, to preserve competitive markets for the farmer; the McFadden Banking Act of 1927, to prevent banks from expanding across state borders; and the Robinson-Patman Act of 1936, to stem the rise of giant retailers like the A&P.
The laws worked. Between 1920 and 1980 the percentage of the market controlled by the top four meatpackers fell from more than 80 percent to about 25 percent. In 1966, the Supreme Court blocked a merger that would have combined 7.5 percent of the Los Angeles grocery market under one roof. And the resulting competition drove down prices in almost every sector of the U.S. economy.
But since the 1970s, both Democrats and Republicans have undone almost all these laws. The result has been a concentration of power and wealth that would have horrified True Populists. In groceries, pharmacies, hardware, and office supply, control has been consolidated in as few as one or two giants. So, too, wealth—the Walton family alone is now as rich as 140 million other Americans combined. And with the rise of online goliaths like Amazon, which aims to be the “Everything Store,” control will only be yet further concentrated.
What would a True Populist do today? Besides neutralizing large online retailers, a True Populist would revive the laws Americans used to localize banking, farming, and retail through the heart of the twentieth century.
6. MAKE ALL GOVERNMENT PUBLIC
In his 1904 book, The Shame of the Cities, the muckraking journalist Lincoln Steffens described how the “privatization” of government services had corrupted communities across America. Describing St. Louis, he wrote, “Along about 1890, public franchises and privileges were sought, not only for legitimate profit and common convenience, but for loot. . . . The riff-raff . . . drove out the remaining respectable men, and sold the city—its streets, its wharves, its markets, and all that it had—to the now greedy business men and bribers.”
Populists and reformers in all parties used various means to push such forms of corporate self-dealing out of government, sometimes under the banner of “No use of public powers or public property for private profit.” One early example was the Pendleton Civil Service Act of 1883, a bipartisan move to ensure that public officials were fully independent of private corporations.
In the case of companies that provide vital services like gas, water, and electricity, the Populists took a similar but more hybrid approach. As with railways, the Populists often chose to leave these businesses in private hands, then focused closely on preventing all discrimination in pricing and service. One goal was to ensure that executives received some sort of reward for good management. Another was to limit the ability of the masters of these public monopolies to exploit the power inherent in the monopoly to serve themselves or their friends. In the early years of the twentieth century, many communities established independent public service commissions to formalize this work.
But beginning in the 1970s, this legacy of Populism came under assault across America. In the name of “efficiency,” policymakers in both parties “privatized” more and more government functions, and more and more control over public utilities.
Today, most of the work of the federal government is outsourced to contractors, whose seven million employees outnumber the ranks of actual government workers by nearly fourfold. Similarly, hundreds of localities have cut regulation of monopoly utilities, like electricity.
One result is precisely the self-dealing that Populists worked so hard to abolish. Many of today’s federal contractors pay themselves lavish incomes, even though all or most of their work comes from the government. The CEO of Lockheed Martin, the federal government’s largest contractor, earned $20 million last year—100 times what taxpayers gave Defense Secretary Ash Carter, whose department oversees most of Lockheed’s work. Similarly, the managers of many utilities pay themselves kingly salaries for overseeing public businesses. The results can lead to a grotesque warping of incentives. In the nation’s capital, the CEO of the Washington Metro earns close to $400,000 annually; the CEO of the local electrical utility Pepco made $15.4 million in 2014.
What would a True Populist do today? Insist that the managers of any corporation receiving more than a quarter of its revenues from taxpayers—including defense contractors, universities, and hospitals—work at government wages. And require that the bosses of local public utilities earn no more than the public servants who regulate them.
7. PROTECT THE INDUSTRIAL ARTS
In 1892, the banker J. P. Morgan, taking advantage of an economic bust, bought up the patents of that most prolific of American inventors, Thomas Edison. He later combined Edison’s patents with those of George Westinghouse and Nikola Tesla and launched a new company, General Electric. The banker was now boss, and the industrial corporation was his tool.
By 1912, what to do with such industrial monopolies had become a major topic of debate. Most Americans welcomed such technological marvels as the mass-produced light bulb, telephone, automobile, and steel girder. But many also fretted about how to govern these immense corporations, which exerted so much power over people and places.
Teddy Roosevelt believed that the answer was to use the federal government to directly regulate the industrial corporation. But the idea of combining the power of the federal government with that of the giant corporation horrified the Populists. It is far safer, Brandeis said, to “regulate competition” than to “regulate monopoly.”
Over the next generation, the Populists came up with two answers. One was introduced by Thurman Arnold, the head of antitrust under Franklin Roosevelt. Arnold’s idea was to have at least three or four corporations manufacturing any particular item. This achieved Brandeis’s goal of external regulation through competition, but it also left the industrial corporations big enough—both horizontally and vertically—to provide scientists and engineers enough room and resources to work their wonders, at scale.
The second answer was to check the power that financiers and speculators exercised over the internal operations of corporations so that scientists and engineers, as well as their managers and frontline workers, could do their jobs. Rigorous antitrust enforcement suppressed the flow of mergers—hence the need for finance. But the Populists reinforced that measure with other actions. This included the Glass-Steagall Act of 1933, which stated that banks couldn’t use depositors’ money to make deals, and the Securities and Exchange Act of 1934, which buttressed the power of small shareholders. It also included support for unionization by skilled workers, to empower them to better resist the demands of the financier.
Since the 1980s, however, a general reversal of these policies has once again shifted power over the industrial corporation into the hands of the financier. One result is what’s happened to Pfizer. In 1950, it was this company’s scientists who discovered the antibiotic oxytetracycline. But in recent years, Pfizer’s managers have devoted themselves mainly to putting cash into the hands of the bankers who now effectively control the company. One way they have done so is by engineering a long line of giant mergers and then firing thousands of scientists. As one of Pfizer’s own top executives wrote, the impact of these firings “on the R&D of the organizations involved has been devastating.”
What would a True Populist do today? Besides forcing all industrial corporations to compete (see #1), a True Populist would use labor law and securities law to shift power away from the predatory financier to the scientist, engineer, and skilled worker.
8. TAKE BACK LEISURE
On July 4, 1915, Louis Brandeis delivered a holiday oration at Faneuil Hall in Boston that gave voice to an ideal deeply shared by his fellow Populists. “A short workday is as essential as adequate food and proper conditions of working and of living,” Brandeis declared. “The worker must, in other words, have leisure.”
By leisure, Brandeis did not mean idleness. As his biographer Jeffrey Rosen explains, he meant the free time necessary to pursue one’s deeper needs and to play a meaningful role in the life of one’s family and community. “Leisure,” Brandeis said, “means ability to work, not less, but more, ability to work at something besides breadwinning. . . . Leisure, so defined, is an essential of successful democracy.”
In America, this vision dates back to the Declaration of Independence, and Thomas Jefferson’s idea that Americans had a right to “the pursuit of happiness.” As the historian Benjamin Kline Hunnicutt details in Free Time: The Forgotten American Dream, from the founding until about forty years ago Americans defined progress mainly as the attainment of more time to pursue what really matters in life—like one’s family, one’s community, one’s arts, one’s hobbies, or one’s god.
In the nineteenth and early twentieth centuries, this meant fighting not merely for higher wages but also for an eight-hour workday and a forty-hour workweek. It meant fighting for the end of child labor and the ability to retire. It meant supporting unions. In many communities, it even meant “blue laws,” which closed stores on certain days and after certain hours, so people could have that time free.
And the policies worked. Between 1830 and 1930, the average American’s working hours fell nearly in half. Indeed, by the 1960s, futurists were predicting that, thanks to ever-increasing automation, the principal challenge facing the next generation of Americans would be what to do with an abundance of free time.
Populists found ways to check the power of financiers so that scientists, engineers, frontline workers, and professional managers could do their jobs. Productivity never grew faster.
Yet today, even as American workers as a whole produce almost three times more in an hour than did their counterparts in 1960, they are typically working at least as long and often much longer. Among adults working full-time in the U.S., the average workweek is now forty-seven hours, with fully a quarter working at least sixty hours. Worse, many workers now have virtually no control over their schedule, as they are required to remain on call for shifts that could come at any time of day or night. The resulting conflicts between work and family life are now widely seen as a spreading crisis that is particularly hard on women and children and on social institutions that depend on volunteers to donate time.
What would a True Populist do today? Besides restoring competition for labor (see #1 and #5), a True Populist would immediately push to cut the workweek back to forty hours. He or she would do so by promoting a living wage and stronger unions, and by cracking down on companies like Uber that deny their workers labor protection by misclassifying them as contractors.
9. KEEP PLANES, TRAINS, AND ROBOTIC CARS OUT OF THE HANDS OF PLUTOCRATS
As Americans glimpsed the possibilities for mass air travel in the 1930s, they faced the same challenge their parents had confronted with railroads. If airlines were allowed to monopolize, they would discriminate in ways that determined which cities, which businesses, even which individuals, rose or fell.
Populists defined progress mainly as the attainment not of more stuff, but of more time to pursue to what really matters- like devoting more attention to one’s family.
In many other countries, the result was public ownership. But Americans wanted to preserve a role for private initiative, so they applied the same model of competition they had mastered with railroads. As expressed in the Civil Aeronautics Act of 1938, the goal was to promote “adequate, economical, and efficient service by air carriers at reasonable charges, without unjust discrimination, undue preferences or advantages, or unfair or destructive competitive practices.” In effect, this meant that private airlines operated flights, while a government board ensured the service was of high quality and fairly distributed.
The airline industry soared, and America did as well. Airfares fell dramatically, and by 1977, 63 percent of Americans over the age of eighteen had taken a trip on an airplane, up from 33 percent in 1962. Regulators succeeded in keeping all cities more or less equally connected to the world.
But in the late 1970s, the Carter administration repealed this body of law, in the name of “deregulation.” In the years since, airlines have been allowed to consolidate to a degree unknown even to the railroad barons. Today four super-carriers control 80 percent of traffic, and enjoy outright monopoly on many routes.
These monopolists do just what monopolists of the past did. They charge different passengers different prices for the same flight. They cut the quality of air service even as they pocket record profits. And they discriminate among people who live in different cities, cutting service and hiking fares to places like St. Louis, Memphis, and Minneapolis, in ways that make it harder to attract and keep business.
Bad as all this is, the future looks even bleaker. On-demand transport and self-driving cars are fast ushering in the next major transportation revolution. These services have the potential to fundamentally alter how people and goods travel. Yet the destruction of the principles used to run the U.S. airline network has created an intellectual and legal void. As a result, a few private corporations, such as Google and Uber, are left free to write the rules of twenty-first-century transportation, with little coherent consideration for the interests of the American public or the individual American citizen.
The basic problem is that these private for-profit monopolists are increasingly able to combine their control of mapping software, the operating systems of vehicles, and the vast reams of information they collect on each rider in ways that give them alone the power to regulate who goes how fast, by what route, and at what cost.
What would a True Populist do today? Restore public regulation of all transportation to ensure fair service for all Americans.
10. POWER (AND IDEAS) FROM THE PEOPLE
In September 1932, campaigning in Oregon, Franklin Roosevelt described how he wanted to develop the nation’s electrical infrastructure. After railing against “public utility barons,” and dubbing one magnate’s empire a “monstrosity,” he detailed the principles that guided his thinking.
First, the supply of electricity should be “satisfactory and cheap” as well as “fair,” with no discrimination by region, business, or household. Second, although electricity should generally remain “a function for private initiative,” when a community is not happy with the service or rates offered by a private company “it has the undeniable right” to set up a “governmentally owned” system. Third, when power is generated from a public resource like water, that power is, Roosevelt said, “our power.”
Over the coming decades, these principles shaped thinking at both the federal and state levels. To this end, Congress and the White House in 1935 broke up electrical utilities along state lines, to keep them small enough to regulate effectively. And in 1936, they passed the Rural Electrification Act to help citizens organize and pay for locally owned electric cooperatives.
The result was something new in the world—universal, world-class, affordable, fairly distributed power. This system was a main factor behind the flourishing of the twentieth-century U.S. economy, and of communities and families from coast to coast.
Then, in the 1980s, two new visions of America’s power future began to compete.
One looked to update Roosevelt’s original vision for America’s electrical system to take advantage of new technologies. An early result was a 1992 law designed to separate the business of distributing electricity from the business of generating electricity. The goal was to create markets to promote the building of cleaner and cheaper power plants. More recently, with the advent of affordable solar and wind power, it meant a more radical vision, in which every home, every farm, even every car, could become a generator of electricity, with the electrical network serving as a commonly owned balancer of supply and demand—or, more simply, a two-way open-access highway for electricity.
Uber and self-driving cars are ushering in a transportation revolution, yet without the guidance of the Populists principles Americans long used to keep monopolists from controlling our mobility.
The other vision of America’s electricity future was to restore multistate centralized giants run largely by financiers. This vision was brought into effect by a 2005 law, the Energy Policy Act, strongly supported by then Vice President Dick Cheney, which undid most of the 1930s-era prohibitions on size and ownership. Since then a growing number of corporations, such as Exelon and Duke Energy, have focused on buying up smaller, neutral utilities wherever they can. They then use these local monopolies to block the introduction of new technologies and to force entire communities to consume power generated by antiquated coal and nuclear plants.
What would a True Populist do today? In addition to prohibiting discrimination (see #3) and banning vertical integration (see #4), a True Populist would follow Roosevelt’s lead. This means doing whatever it takes to provide world-class power and broadband service to all Americans. And it means freeing Americans to generate and share power (and ideas) in whatever way they will.
