C ORPORATE C RIME R EPORTER

Robert Bork, William Baxter and the Monopolization of America

24 Corporate Crime Reporter 7(12), February 13, 2010



You walk into your local convenience store and head to the cold walk-in beer room in the back.

The choice is overwhelming.

Budweiser, Michelob, Bud Light, Busch Light, Stella Artois, Grolsch, Kirin,Tsingtao, Corona, Negra Modelo, Rolling Rock, Widmer, Miller and Coors.

In fact, all of these beers are controlled by two companies.

MillerCoors under the direction of South African Breweries (SAB) and AnheuserBusch In Bev.

Two multinational corporations controlling the beer choices of 300 million Americans.

And it’s not just beer.

One single multinational corporation dominates the world supply of eyeglass stores.

One dominates the milk supply.

Barry Lynn goes down the list of industries.

And he finds a similar story across the board.

A handful of multinational corporations controlling each industry – or the supply chains of each industry.

Such dominant monopolies were illegal just thirty years ago.

But that all changed with Ronald Reagan and Robert Bork.

A corporatist oligarchy took hold.

President Obama has promised aggressive antitrust enforcement.

But Lynn says it’s pie in the sky.

“It will take more than a lawsuit or two to overthrow America’s corporatist oligarchy and restore a model of capitalism that protects our rights as property holders and citizens,” Lynn argues in his new book – Cornered: The New Monopoly Capitalism and the Economics of Destruction (Wiley, 2010).

Antitrust law was developed to protect the political economy from extreme concentrations of corporate power.

Then came Reagan and Bork.

In 1978, Bork said we should have a consumer welfare test.

If economic concentration is good for the consumer – think Wal-Mart – then let it be.

Never mind the citizen.

In 1981, William Baxter, head of Reagan’s Antitrust Division, announced that he would be guided by “an efficiency test.”

“When Baxter first talked to the press in 1981, he said – we are going to impose an efficiency test,” Lynn told Corporate Crime Reporter last week. “Those were the words he used. It was only a little bit later that they framed it as a consumer welfare test. And Robert Bork came up with that. Bork’s book – The Antitrust Paradox – came out in 1978 and he floated this idea of a consumer welfare test.”

“It took Baxter a couple of years to get the messaging together. They locked into the consumer welfare test. And it helped to bring along so many folks in the consumer movement. And for some reason, after focusing on safety, which is a fantastic thing that Ralph Nader did, they began fixating on prices. And there is a whole political analysis as to why they began fixating on prices. What groups were they targeting with that fixation?”

“In 1981, that marked a revolutionary change in how we applied our anti-monopoly laws. No longer was the primary consideration political. The primary consideration was prices and consumer welfare.”

Lynn says that Bork didn’t understand why the consumer movement didn’t come after him on the consumer welfare test.

“In 1993, Bork put out a second edition of the Antitrust Paradox,” Lynn said. “And in the introduction, he says – I don’t understand what happened here. I thought the socialists were doing to come out and fight us tooth and nail on this. And they never did. We didn’t think we were going to get this through. And we did.”

Mention the word “socialist” in this context, and Lynn sees red.

“In this country, the group that tends to point its finger and calls the other people socialists most effectively tends to win,” Lynn said.

“And when they win – they get to socialize their own risks.”

“So, you have this elite in this country that for a generation has been raving about socialism.”

“And what were they doing in the meantime? They were socializing all of their risks.”

“As was laid bare to us in September 2008. Larry Summers put it best – what the bankers did, he said, was they privatized all of their profits and socialized all of their risks.”

“You really have to target the other people and call them socialists.”

“We have just seen the most massive era of socialization in this country that we’ve ever seen.”

(For a complete transcript of the Interview with Barry Lynn, see 24 Corporate Crime Reporter 7(12), February 15, 2010, print edition only.]

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