Over the past couple of months our mind-set has shifted dramatically. In March, the focus which had been on the economic globalization of five tech giants turned to the vicious plague launched by the microscopically small covid19. The widespread desire, which had been developing to examine how to switch from the ever larger, bigger or gigantic that range for buildings, cities, or corporations, may now focus on smaller more human units. Driven by fear, the larger vision escapes us. We shall be struggling to comprehend the scientific complexities of the tiny viruses that threaten us.
We may ponder over what is right, but we have no problem knowing what is wrong when it comes to big and small in economics, architecture and even in sports. While in our daily lives the small is understandable and often desirable, when it comes to the universal level, the big often seems as overwhelming as it is environmentally destructive. We seem incapable of limiting the rampant impositions of such international giants as Facebook, Apple, Kraft, Microsoft, Shell or Unilever.
I was therefore thrilled to open the New York Times in February to find this headline in the business section: “She wants to break up all the giants.” The article describes how an anti-trust activist, Sarah Miller, 37, struggles to rewire the American economy. This former aide at the US Treasury Department and then a deputy director of the Open Markets Institute, spent three years guiding a coalition of liberal groups in Silicon Valley to break up Facebook for violating anti-trust laws.
Miller’s aims to break up giant corporations like Facebook, Microsoft, Google, and Apple that are all monopolies seizing control of how billions of people communicate online and make billions of dollars a year from their often dangerous services. Miller and her associates believe these big tech monopolies are subverting democracy. Their platforms enable the spread of nefarious misinformation, profit from deceptive promotion of critical health supplies, and the collapse of local news sources.
I admire Miller’s efforts to introduce worker representation in all corporate administrations. Indeed, her latest organizations are bringing up-to-date Schumacher’s “small is beautiful” proposals. Earlier this year she took the lead at the American Economic Liberties Project to confront the corporate concentrations which were furthering global inequality. She told the New York Times: “If you look at meat processing, if you look at baby formula, if you look at pacemakers, everywhere you look you see markets that have been rolled up and monopolized.”1 In calling for reform of the anti-trust laws she also advocated “working with groups that look at work through a civil rights lens.”
From Miller’s perspective, while corporations claim to be engines of wealth creation, in truth they are engines of wealth extraction. Their bottom lines of profit are dependent on the enormous sums paid by the public’s tax payers for everything from health provisions to the costs of education, infrastructure, and national defense. At the American Economic Liberties Project, Miller and her associates are now focusing on proposed federal guidelines to evaluate mergers and abuses by national and global conglomerates. Their aims are not only to push the Federal Trade Commission and the Justice Department into action but also to alert voters on how the detrimental effects of the uncontrolled growth of corporate giants threaten democracy.
Barry Lynn, one of Miller’s top collaborators contends that the giant monopolies are squelching innovation and destabilizing financial and industrial systems. He has argued that the US anti-trust laws must be revived to recover true open markets and democratic freedoms. Lynn also is eager to expose the extensive violations of privacy by groups like Google and Facebook as well as their kinetic intrusions and invasive social advertising.
When Congress passed the CARES Act to protect those financially impacted by the coronavirus, the legislation also expanded unemployment insurance and created an emergency small business lending program. But this act also authorized the Federal Reserve to lend to large publicly traded corporations and financial institutions — in other words, it licensed bailouts for the giants and Wall Street. This extension of $4 trillion of credit was the equivalent of a $13,000 loan to every American, but that isn’t going primarily to workers, communities or small businesses. It may be used to bail out the large corporations, and high-risk investors with few significant restrictions and limited oversight, possibly including private equity funds.
The Fed has been buying assets on a frantic scale. It is committed to purchasing corporate debts and even high yield “junk bonds”. This has forestalled the anticipated cascade of bankruptcies in large firms. All of this increases the power corporate monopolies wield in the United States and pushes the eager monopolies to prey on the vulnerable small businesses that are struggling to stay afloat.
What is now needed from Washington is more aggressive oversight of the corporate giants, antitrust enforcement, much stronger financial regulation and the introduction of a more powerful administrative executive. What is now missing is a road map to a more humane program in which SMALL matters.
For the past 47 years I have enormously admired E.F. Schumacher’s book “small is beautiful a study of economics as if people mattered.” He saw the true nature of mankind being distorted by our pursuit of economic growth. He pushed for the break-up of the giant corporations and the introduction of worker representation across the board:
“The economics of gigantism and automation … is totally incapable of solving any of the real problems of today. An entirely new system of thought is needed, a system based on attention to people, and not primarily attention to goods …Industrial development only pays as large projects are invariably more economic than small ones … and capital intensive projects are invariably preferred against labor- intensive ones.”2
As machines do not make the mistakes which people do, the drive is for ever larger units.
If this was true then, how much more obvious this should this be now. Today the global economy is dominated by a few enormously rich financial speculators and investment groups as well as the dozen or so international mega-corporations that are able to manipulate prices and drive competitors from the market.
Over the past two decades of mergers and acquisitions the unaccountable corporations concentrated in the financial, technological and communication sectors have dominated the market to the extent that they are able to manipulate prices, drive out competitors, and corrupt democratic politics. Today in the US the launching of new companies is restricted by the powers of the Big Tech. The small businesses are likely to suffer in the post-pandemic era where there will be fewer low-wage jobs for millions of desperate job seekers.
The coming consolidations through mergers, acquisitions and strategic alliances also means fewer jobs: The big swallowing the small. This also means fewer jobs as the enlarged units tend to cut jobs after combination. Because there will be fewer employers to hire or retain workers by the post-plague corporations, the pressure on the economy generally will be to lower wages. Large projects are generally more economic for corporations than multiple small ones. It is also true that giants like Microsoft and Apple have turned through agglomeration into groupings of smaller semi-autonomous units.
In my technology driven alternative, Dollars or Democracy, an economic revolution is led by workers introducing small, independent stakeholder-owned and community-based networks.3 As Schumacher wrote: “People can be themselves only in small comprehensible groups. Therefore we must learn to think in terms of an articulated structure that can cope with a multiplicity of small-scale units.”4 Yes. We must conceive and plan our evolution into an overall successful economy with sustainable growth and a more inclusive and equitable base. In sum: A life-serving planetary collective. A place where large and small mix harmoniously.
As John Ruskin cautioned us: ”He who can take no interest in what is small will take false interest in what is great.”5
1David McCabe, “She wants to break up all the giants,” The New York Times, February 13, 2020.
2E.F. Schumacher, small is beautiful, (1973) p.68
3Yorick Blumenfeld, Dollars or Democracy (2004)
4Schumacher, op.cit. p 67
5John Ruskin, Modern Painters, (1846)