The Democrats’ defeat in the 2024 elections has put progressives’ antimonopoly program in jeopardy. If the party’s current crisis of legitimacy compels a broader reconsideration of political strategy, that is a good thing, because antimonopolism has always been a less desirable alternative to more direct means of redistributing wealth in America. The resurgence of antimonopolism in progressive policy over the past decade has been based on a critical misreading of the history of the New Deal state that emphasizes the fight against big firms. In fact, government regulation of prices and wages across entire industries and the economy—through public rate-setting, progressive income taxation, and union-friendly policies—was always far more important than antitrust litigation to an agenda that delivered record equality after World War II.
Attempts by antimonopolists in the Biden Administration to turn a campaign against monopoly—and the promotion of its inverse, competition—into the cornerstone of the progressive fight against economic inequality produced a set of quixotic initiatives. A Rube Goldberg plan to compete drug prices down by importing drugs from a country that directly sets their prices (Canada) never got off the ground. The administration’s major monopolization victory came against a firm (Google) that already offers its product for free to consumers. Another victory in an effort to use antitrust to help the average worker served only to protect the seven-figure royalties of bestselling authors like Stephen King. And the administration’s plans to use antitrust to fight inflation that had been unleashed by pandemic supply disruptions predictably fizzled. The average American worker or consumer would be hard pressed to identify any personal financial gain from four years of progressive antimonopoly policy.
In the wake of the Democrats’ defeat, progressives should jettison antimonopoly and replace it with the focus on direct regulation of prices and wages that characterized progressive policy in the postwar years. Looking forward to 2026 or 2028, one way to do that would be to strive for a goal that even the New Deal state did not achieve: the creation of a universal price regulator along the lines proposed by Teddy Roosevelt in 1908. The first step is for progressives to rediscover the concept of economic rents, which served as the intellectual basis for the price and wage regulation of the New Deal state. Rents explain why, for the original progressives, antimonopoly policy was always an afterthought—and should be for progressives today as well.
Inequality and the problem of rents
Scholars belonging to the original Progressive movement of a century ago understood that markets as such—and not just monopolized markets or big firms—are the source of the inequality that characterizes industrial economies. Indeed, as Thomas Piketty observed more recently, inequality “has nothing to do with market imperfections and will not disappear as markets become freer and more competitive.” For a century, Progressives therefore had three main demands: direct regulation of consumer prices, the unionization of workers, and taxation to extract any surplus profits retained by firms. Antitrust was absent.
The original Progressives’ critique of markets rather than monopolies flowed from a foundational concept in left-wing economic analysis: rent. Rent is the surplus revenue generated by a firm above and beyond the revenue required to pay the firm’s cost of production, where “cost of production” is defined to include profits demanded by investors or founders, research and development costs, compensation for risk, labor and raw materials costs, and anything else that could conceivably be needed to make a firm ready, willing, and able to participate in the market.
Rent, in other words, is the share of revenue that does not actually need to be paid to firms to ensure that they will produce. It can be taken from the firm and given to anyone without discouraging production, by definition. It follows that owners have no special claim to rent, but because they control firms, they can usually keep rent for themselves. Rent therefore poses a legal and political, as opposed to economic, question: who should be allowed to share in the wealth and in what amount? Progressives’ answer was that rent should go to the people rather than to the owners of firms. The most direct ways to achieve that were to force firms to eliminate rent by charging lower prices, to help workers to appropriate rent from firms by demanding higher wages, and to tax away any rent that firms might still be able to retain.
Antimonopoly did not have a place in this toolkit because, as the original Progressives saw it, even firms operating in perfectly competitive markets generate rents. If antitrust or some other antimonopoly initiative sometimes made its way into Progressive policymaking, it was as a fallback when Progressives could not get what they really wanted.
Firms can generate rents in perfectly competitive markets because all firms have at least slightly different production costs. Competition drives price down to the cost of production, but in a market in which every firm has a different production cost, that means competition can only drive price down to the cost of one firm—the marginal firm. All other firms will either have costs that exceed the competitive price and so will exit the market or will have costs that fall below the competitive price, allowing them to generate rents. Given that competitive markets generate rents, only price regulation, taxation, or unionization can prevent firms from appropriating them. Targeting monopolies for breakup or regulation doesn’t work because in competitive markets there is no monopoly to target.
For the original Progressives, that did not mean that antimonopoly policy could never be useful. When firms monopolize markets, they push prices away from competitive levels in order to extract even more rent than they can under competition. By introducing competition, antitrust could be useful in eliminating that extra rent. But progressives’ preferred approaches had the advantage of being able to eliminate all rents, including both monopoly rents and those in competitive markets, by lowering prices or raising wages directly.
The struggle to regulate prices, to unionize, and to tax
Over a period of seventy years starting in the late nineteenth century, Progressives waged a massive struggle to place the regulation of prices by government administrative agencies on a firm legal footing. Opponents argued that when the government dictated the price at which a business sold its goods, the government was depriving the business of full enjoyment of its property rights without due process of law, in violation of the Fourteenth Amendment to the US constitution.
The challenge to price regulation on constitutional grounds would have surprised Americans who had done business in the first decades of the republic. Up until the mid-nineteenth century, price regulation had been the norm in American life. The courts were willing to force corporations to charge low prices even when there was no regulator present to tell the corporations what prices to charge. Given this history, how could price regulation suddenly become unconstitutional?
The answer is that the ideology of economic liberty—or as its detractors call it, laissez faire—swept the West in the middle of the century, transforming attitudes toward regulation. Progressives and their political forbears fought back. Their first major victory came in 1877, when the Supreme Court ruled that an Illinois law setting maximum prices for grain storage—a matter of great concern to farmers—did not violate the Fourteenth Amendment, thereby clarifying that governments could engage in price regulation.
But twenty years later, Progressives suffered a major loss. The State of Nebraska passed a law capping the prices railroads could charge to haul freight across the prairie. The Union Pacific, Burlington, St. Paul, Fremont, Omaha, St. Joseph and Kansas City railroads sued, arguing that due process required that the cap be high enough to cover their costs. A unanimous Supreme Court held that due process required that the cap be even higher than that. “[T]he rights of the public would be ignored,” wrote Justice John Marshall Harlan, if rates were set “in order simply that the corporation may meet operating expenses, pay the interest on its obligations, and declare a dividend to stockholders.” According to the Court, regulators had to ensure that firms earned more than what they required to do business. The Court euphemistically called this surplus “a fair return [on] fair value.” Another name for it was rent.
For the next two generations, the Court became a price regulator in its own right, reviewing the prices set by a growing number of state and federal administrative agencies to ensure that businessmen would continue to appropriate rents. Progressives responded by developing the argument outlined above that owners have no special claim to rent. But it was not until 1944 that the Court, now staffed with a majority of Roosevelt appointees, at last repudiated the businessman’s right to rent. Over the same period, Progressives fought equally important struggles to establish the worker’s right to unionize and the government’s right to tax.
Antitrust as afterthought
To the extent that antimonopoly had ever captured the Progressive imagination, it had done so very early, when, in the mid-nineteenth century, Congress tried and failed to create competition in the telegraph market. Every time Congress brought competitors into the market, they would knit themselves into a new monopoly. As Richard R. John put it, “the demonstrated perversity of antimonopoly left regulation as the only viable legislative solution.” The lesson easily generalized to the rest of the economy, leading to the establishment, in 1887, of the Interstate Commerce Commission, which went on to set prices for the railroad and freight trucking industries for nearly a century.
Antimonopoly policy only continued to advance through the foiling of Progressive attempts to regulate prices. The origins of America’s foundational federal antitrust law, the Sherman Act, reflect the compensatory politics of antimonopoly. Import tariffs on consumer goods were common in the nineteenth century and operated as a kind of domestic price regulation because they effectively set the minimum price at which domestic producers could sell their goods without fear of foreign competition. In 1890, the Republican Party rammed through a tariff increase that threatened to drive up prices across the economy. To mollify farmers and other groups concerned about the price increases, Republicans cast about for additional legislation that could be spun as addressing this concern. The result was a federal statute, introduced by Ohio Senator John Sherman, that outlawed persons “who shall monopolize.”
The Sherman Act initially languished little-used and affirmatively disliked by the emerging Progressive Movement. The Justice Department turned the statute against labor unions on the ground that they were fixing wages, using the act to jail Eugene Debs during the Pullman Strike in 1894. Theodore Roosevelt, who is inaccurately remembered today as a trustbuster, called the Sherman Act a “positive evil.” In 1908, the future founder of the Progressive Party pushed instead to create a federal Bureau of Corporations empowered to regulate the prices of every corporation in America. Congress thwarted him and a compromise emerged six years later: the creation of a new antitrust enforcer in the form of the Federal Trade Commission and the passage of other legislation that strengthened the antitrust laws.
When Franklin Delano Roosevelt’s plan for ending the depression was struck down two decades later, antitrust reemerged as a compromise. The New Deal began as an aggressive regime of economy-wide government-sponsored cartelization and price setting meant to bring about broad-based redistribution of wealth in the economy. FDR responded to the defeat of this experiment by creating price regulators on the model of the ICC in a number of key industries. To impose some semblance of discipline on prices in all other markets, FDR turned to antitrust, kicking off three decades of vigorous enforcement looked upon as a golden age by antimonopolists today.

The intellectual trajectory of the leaders of this golden age reflects its character as a fallback. Thurman Arnold, whom Roosevelt tapped to direct his charge into antitrust enforcement, had once “ridiculed the antitrust laws as empty symbolic vehicles designed to assuage popular fears of bigness and power without actually constraining the behavior of the modern business corporation,” according to his biographer. After his appointment, Arnold walked those views back.
Walton Hamilton, one of the most prominent Progressive thinkers to join the new antitrust effort, had once written that “in their attempt to ‘stay the development of large scale enterprise and to make big business behave as if it were petty trade’,” the antitrust laws “embody and ‘express the common sense of another age’.” Even after joining the antitrust effort, Hamilton continued to believe that the regulatory approach described in his magnum opus, “Price and Price Policies,” was correct.
Even the judge who wrote perhaps the most celebrated opinion of this golden age hated antitrust. Judge Learned Hand, regarded by many as the greatest American jurist never appointed to the Supreme Court, found Alcoa liable for monopolization even while he privately lamented the Sherman Act: “I despise this whole method of dealing with a very real and very serious problem in industrial life,” he wrote. Hand preferred price regulation.
New Deal Progressives never achieved their dream of an economy-wide price policy. Despite this failure, price regulation, taxation, and unionization became the defining features of postwar American economic life. During the 1950s and 1960s, 35 percent of workers were unionized, 25 percent of the economy by GDP was price regulated, the corporate tax rate was 53 percent, and the top marginal income tax rate was 94 percent. Inequality fell to the lowest levels on record. The antitrust bandaid taped over the gaps in this regulatory web was of limited importance to this Progressive triumph.
Progressive antitrust today
One might have expected progressives today to pick up where the original Progressives left off. They might have made rents the centerpiece of their movement. They might have made the restoration of the price regulation, unionization, and taxation torn down over the past five decades of political reaction their principal demand. Instead, they have pursued antimonopoly, embracing policies that their intellectual forbears were disappointed to institute without having first tried and failed to achieve the policies their forebears preferred and often won.
This may be partially explained by progressives’ acceptance of conservative critiques of big government or progressives’ frustration at continuing voter hostility to some elements of the original Progressive synthesis, such as taxation. But it is also explained by something almost too parochial to be believed: an attempt by the media industry to use antimonopoly to smite the social media companies that have devastated newspaper ad revenues.
Newspapers were once themselves some of the most durable monopolies in the United States, but disaster struck in the 2010s, when millions of Americans put down the local paper in favor of the infinite scroll on social media. Journalists and, more importantly, senior management of newspapers, blamed their misfortune on monopoly—and started lobbying for antitrust action. Newspapers promoted antitrust action against the social media giants in hundreds of news and opinion articles that started appearing in 2016. They lionized progressives who advocated antitrust action and painted the social media giants as sinister monopolies.
Ben Smith, then the media columnist at the New York Times, explained the business motivation behind the antitrust revival in 2020:
[T]he power of the press, even nowadays, makes it a formidable political force. Rupert Murdoch’s bare-knuckled News Corp . . . has long led the fight to claw back revenue from the tech giants, and hostility to Google bleeds through the pages of The Times of London and Fox News’s airwaves. . . . While much of the American media rejects the idea that it is crusading in its pages to support its publishers’ business agenda, most news executives in this country share a viewpoint on the platforms, having seen them pull advertising dollars from the news business and . . . politicians remain eager to please the press that covers them.
Politicians in both parties responded. By 2020, the Trump Administration had filed antitrust cases against Google and Facebook, and House democrats had convened major antitrust hearings. It is easy to see how progressives could have mistakenly seen in the deluge of reporting on antitrust, and the receptivity of the major parties to antitrust action, a grassroots antimonopoly movement that had a real shot at influencing policy. They found that recipe hard to resist.
The consequences of applying antimonopoly to a problem that can only be solved through redistribution of rents were predictable. Progressives rushed about jamming the round peg of antimonopoly into the square hole of redistribution across a range of industries, failing to get much done and letting good opportunities go to waste.
Perhaps the most obvious example was the Biden Administration’s insistence that monopoly caused America’s post-pandemic inflation. That would only have made sense if firms had monopolized the entire American economy all at once during the pandemic. But there was no such dramatic drop in the number of firms in American markets—as basically everyone other than antimonopolists pointed out. Pandemic stimulus spending increased demand across the economy, in both competitive markets and monopolized ones. That gave both the grandest monopoly and the pettiest storefront alike the ability to raise prices and extract more rent from consumers.
Antitrust litigation, which can take a decade to run its course, would never have been able to respond in time, and even if it could have, it would only have reduced the prices charged in relatively concentrated markets, rather than across the economy as a whole. Rather than seize a golden opportunity to impose price controls or, as the Tories did in Britain, a windfall profits tax, Biden suggested antitrust action instead. The proposal was rightly laughed off the stage, and the administration landed to the right of British conservatives, who got their tax.
Antimonopolists’ monomaniacal focus on prosecuting the tech giants was another missed opportunity. It is an inconvenient fact about tech platforms that the more people use them, the better they get. Because size makes tech platforms better, antitrust is not a good way to respond to their excesses. Breaking them up makes them less useful—the better way to make sure that the tech giants behave well is to regulate them.
That is just what the original Progressives did with the dominant tech platform of their day: the telephone company. Rather than break Ma Bell into pieces, progressives used price regulation to transform the company into a major engine of redistribution in its own right. AT&T charged high prices for the long distance calling services used by businesses and the wealthy, and used the profits to subsidize low prices for the local calling services used by regular Americans. Regulators famously pegged AT&T’s local calling rates to the cost of a medium pizza with two toppings. Progressives also unionized the company, transforming it into a model of progressive labor practices that paid above-market wages to the hundreds of thousands of workers who maintained the wires. AT&T’s role as a progressive success story made it a target of conservatives, which is why the AT&T breakup, which is mistakenly celebrated by antimonopoly progressives today, was actually initiated by the Nixon Administration and brought to a conclusion by the Reagan Administration. In the tech giants, progressives had a golden opportunity to create new icons of regulation along the lines of Ma Bell. Biden Administration antimonopolists chose to walk in Reagan’s footsteps by prosecuting all four major tech platforms for antitrust violations instead.
The biggest missed opportunity has been tax policy, which Thomas Piketty insists is the only way to reduce inequality. One might have hoped that antimonopolists would reverse the Trump Administration’s massive 2017 corporate tax cut because the corporate tax was first enacted in 1909 to target monopoly profits (although it also reaches competitive rents). The Biden Administration never even proposed a full rollback. It was too busy pursuing a flashy but ineffective antimonopoly policy.
Rediscovering TR’s universal price regulator
Modern-day progressives seeking to return to their roots by ditching antimonopoly in favor of price regulation should consider reversing the early twentieth century defeat that led to the creation of the Federal Trade Commission. As President, Teddy Roosevelt sought what he described as “a general scheme to provide for [the] effective and thoroughgoing supervision by the National Government of all the operations” of corporations. The legislation that he championed would have vested in a federal Bureau of Corporations the power to pass judgment on every contract entered into by a corporation, including those relating to prices, realizing the Progressive dream of an economy-wide price policy.
If Teddy Roosevelt had succeeded, FDR would not have needed to fall back on antitrust to fill in the gaps created by piecemeal, industry-specific price regulation. More importantly, Teddy Roosevelt might have prevented the deregulatory movement that destroyed the New Deal state starting in the 1970s from ever getting off the ground. The piecemeal approach made price regulation the business of numerous obscure government commissions. Public oversight was impossible and conservatives used the resulting capture by industry as a pretext for tearing down the administrative state. But a unitary price regulator cannot escape public scrutiny—and democratic accountability.
By winning a single battle to create a single new government office, progressives today could reverse deregulation, expand price regulation, and undermine conservative small government arguments all at once. But they will only be able to advance the original Progressive agenda in this way if they resist the lure of antimonopoly.
Filed Under