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The American Prospect: Monopoly and its Discontents

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Goliath: The 100-Year War Between Monopoly Power and Democracy

By Matt Stoller

Simon & Schuster


In 1974, the Watergate babies swept into Congress to clean house and revolutionize government. This new generation of Democrats rewrote presidential nominating and committee appointment rules, and transformed the party’s economic agenda from equality to national competitiveness, innovation, and entrepreneurship. Among the displaced was the longtime chair of the House Banking and Currency Committee, Wright Patman. It made no difference that Patman initiated the Watergate investigation, or that he had led the fight to rein in corporate power since the New Deal. The New Democrats saw an anachronism who deified small business, the family farm, and restrictive labor unions in an age of global competition, stagflation, and technological change.

The deposing of Chairman Patman is a pivotal moment for Matt Stoller, author of Goliath: The 100-Year War Between Monopoly Power and Democracy. It signaled not only the Democratic Party’s abandonment of anti-monopolism; it ushered in an era of political amnesia that makes Americans unable to understand the relationship between financial oligarchy, commercial monopoly, and authoritarian politics in our own time.

A history of and for the present, Goliath seeks to recover and explain the anti-monopoly tradition of the 20th century. Wright Patman is center stage. Anti-monopolism, Stoller explains, is much more than an ideology. As Patman—and Louis Brandeis before him—teaches us, anti-monopoly is a mode of democratic inquiry, necessary for political and economic agency. For anti-monopolists, democracy and markets are fragile, easily undermined by concentrations of power and a people insufficiently independent from oligarchy to shoulder the burdens of positive liberty and democratic citizenship. Democracy and markets necessitate vigilant inquiry: How is monopoly power acquired, consolidated, concealed, abused? How is it unmasked, taken down, and prevented? Anti-monopolists are not, as is so often charged, anti-intellectual. Committed as they are to democratic agency, they are hell-bent on unmasking academic obscurantism, false necessity, and apologetics for power.

There is no greater way to entrench power, Patman said, than to convince plain people that finance is too hard for them to understand. For Patman, as for populists before him, democratic government was a schoolroom. He used congressional committees to study and publicize the techniques of monopoly power. With Patman as his guide, Stoller explains with great clarity how bankers took control of industry and politics in the 1920s and the 1970s by inventing byzantine financial instruments to hide double-dealing, circumvent regulation, monopolize industry, and mobilize a broad constituency for their anti-democratic project.

While Goliath begins with Woodrow Wilson’s efforts to dismantle the House of Morgan’s vast network of monopolies in oil, manufacturing, and transportation, Stoller’s most original contributions involve the revolt against Andrew Mellon’s empire in the New Deal, the role of anti-monopolism in the New Deal order, and the formation of financial oligarchy and commercial monopoly since 1960.

Andrew Mellon learned his trade from J.P. Morgan. By the time he became Secretary of the Treasury for three straight Republican presidents in the 1920s, Mellon owned a network of 99 banks through which he controlled critical junctures in the economy—coal, steel, aluminum, electricity, chemicals, and rails. Though Mellon’s empire paled in comparison to Morgan’s, he developed an asset Morgan lacked: control over the administrative state. Harding appointed Mellon Secretary of the Treasury in 1921, a job he held until 1932. As progressive Senator George Norris said, three presidents served under Secretary Mellon.

Stoller imaginatively reconstructs “Mellonism” and Patman’s revolt against it. The stock market crash of 1929 unleashed a series of public investigations and lawsuits, which elicited a detailed record of financial manipulation, predatory competition, self-dealing, and political corruption. Stoller mines those archives to explain how Mellonism worked, how Patman led anti-monopolists in his party to dismantle it, and how the Democrats created institutions to prevent it from reconsolidating. Anti-monopolism became a keystone of the New Deal order, turning banking into a quasi-public utility, fragmenting industrial power, nurturing independent farming and commerce, and reining in employer power over unions.

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In America today, wealth and political power are more concentrated than at any point in our country’s history.

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