In his 1952 book American Capitalism: The Concept of Countervailing Power, the great 20th-century economist John Kenneth Galbraith wrote:

Increasingly, in our time, we may expect domestic political differences to turn on the question of supporting or not supporting countervailing power. Liberalism will be identified with the buttressing of weak bargaining positions in the economy; conservatism — and this may well be its proper function — will be identified with positions of original power.

Ah, “countervailing powers.” You rarely hear the term today, but it’s time to bring it back. It’s key to understanding the debate playing out in the Democratic primary. And it offers a clearer way of thinking about the endless balancing act of political reform.

Let’s start with the Democrats. For all the talk of our socialist moment, there’s relatively little socialism being proposed. The only industry anyone is contemplating nationalizing is the health insurance industry, and now that Sen. Kamala Harris (D-CA) has backed off that position, it’s only Sen. Bernie Sanders (I-VT) left arguing for it.

Here’s the truth: What the Democrats — including Sanders — are discussing isn’t so much a socialist agenda as a countervailing powers agenda.

A bit of history is helpful. In American Capitalism, Galbraith was picking three fights simultaneously. As his biographer Richard Parker wrote, the book was a critique of conservatives “with their property-equals-freedom argument,” of economists who believed that “competition equaled efficiency,” and of liberals who believed that “economic concentration inevitably undermined democratic politics.”

Galbraith’s theory, put simply, was this: Capitalism inevitably leads to big corporations, and thus requires other big institutions powerful enough to counter them. This is true between corporations, as a big buyer, like Amazon, forces the consolidation of small sellers, so they can better negotiate prices. But it’s true across spheres too. Big corporations require big government, as the public demands regulation and redistribution, and big unions, as workers band together to build clout.

The problem with the conservative theory, Galbraith thought, was that it was obvious that freedom to contract was insufficient. The problem with the economists was their idealized models blinded them to the way power choked off competition. And of the liberals who loathed the anti-competitive effects of bigness, Galbraith argued that their “most plausible alternative to competition is full public ownership,” which few seriously proposed, either then or now.

Competition was, and is, important. Antitrust law can be used to dismantle the worst monopolists. But Galbraith believed that in an advanced capitalist economy, the inevitability of bigness needed to be recognized, even embraced. “People want large tasks performed,” he wrote, and “large tasks require large organizations. That’s the way it is.”

Once you accept that premise, the implications are clear. Bigness can only be checked by bigness. A healthy economy was one in which these countervailing powers balance each other. An unhealthy economy is one in which one or more of these powers was left to run roughshod.

We are, today, in an unhealthy economy.

Our bigness problem

There is no doubt that corporate concentration is increasing. As law professor Tim Wu writes in The Curse of Bigness: Antitrust in the New Gilded Age:

In the United States, between 1997 and 2012, 75 percent of American industries became more concentrated. Similarly, since the year 2000, across U.S. industries, the Herfindahl-Hirschman index, which measures market concentration, has increased in over 75 percent of industries. The stock markets have actually shrunk, as the U.S. public markets have lost almost 50 percent of their publicly traded firms.

And it’s not just economic power that corporations and their owners have amassed. In the post-Citizens United era, they’ve been unleashed to purchase political power, which has made government, from the corporate perspective, into more of a cooperative power to corporations than a countervailing one. And a decades-long legal and regulatory onslaught has weakened labor unions as a check in the workplace and the political sphere.

But for the past few decades, the power debate was one-sided. The Democratic Party was more or less comfortable with the power status quo, while the Republican Party sought to amplify the influence of the moneyed. Now some leading 2020 Democrats — though certainly not all — are developing a countervailing power agenda.

Sanders wants to weaken corporations and the rich while strengthening labor unions and mass politics. South Bend Mayor Pete Buttigieg and Washington Gov. Jay Inslee have put forward a raft of ideas to strengthen democracy, which would strengthen the public’s power to act through the government. Sen. Elizabeth Warren (D-MA) has also endorsed a pro-democracy agenda, and she’s paired it with an ambitious vision for using the government to break up concentrations of economic power, increase worker influence over corporate governance, and restructure markets.

“We’re not going to live in a world where corporations don’t have influence,” Felicia Wong, CEO of the liberal Roosevelt Institute, told me. “So you need to build a system that doesn’t wish away power, but thinks of the other kinds of power you can build.”

Democrats love to talk policy; they’re less comfortable talking power. And so their debates over power lack the precision of their debates over policy. A rediscovery of Galbraith’s ideas could clarify the deeper argument they’re having and permit clearer questions: Which institutions would they like to see gain power, and how would they do it? Which sectors would they like to see lose power, and what would that mean?

Another benefit to thinking in terms of countervailing power is that it’s an antidote to the false rigidity of much ideological discourse. We tend to discuss politics in terms of end states. Socialism. Capitalism. Democracy. Authoritarianism. But a lot of people are signing up with the socialist left not because they are themselves socialists, but because they see a need to rebalance power at a time when corporations have too much and the public has too little.

If the left was successful beyond its wildest dreams and the government amassed too much power, choking off competition and innovation, that too would be a problem, as in some areas it already is (consider occupational licensing laws). If the question is framed as socialism or capitalism, it’s difficult to state the obvious: We may need a bit more socialism now, even if that may create a need for more capitalism later.

But if it’s framed as the balance of countervailing powers, that truth becomes more obvious. There is no end state in a liberal democracy. There is only the constant act of balancing and rebalancing. The forces that need to be strengthened today may need to be weakened tomorrow. But first they need to be strengthened today.

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