The Curse of Bigness Revisited: Private Power, Public Goods, and Democracy in the New Gilded Age

In the modern economy, income inequality is magnified by an equally troubling trend of growing disparities in accessto foundational goods and services.  These services are essential to facilitating equal economic opportunity, yet increasingly the provision of these services is dominated by powerful private corporate actors that are so large as to defy conventional forms of market or regulatory accountability. There is a growing concern about concentrated private power in a number of industries that, like finance and the internet, serve a foundational, backbone function in the modern economy.  In conventional economic thought, so long as these private actors do not overcharge consumers, there is nothing inherently problematic with such concentrations of private control. This paper challenges these conventional economic policy arguments in two respects.

First, the paper argues that the problem of private control over these infrastructural, foundational goods and services are better diagnosed not as problems of economic efficiency and prices, but rather as political problems of power, domination, and control. In short, the challenge is that certain private actors possess relatively unchecked and uncontested control over the distribution of and access to these goods.  Conceptually, this is best understood as a problem of domination—of arbitrary, unchecked influence.

Second, the paper argues that to address this problem of power, we must look beyond economic redistribution and economic policy to develop political institutions that facilitate greater democratic control, contestation, and accountability for these private actors.  Indeed, understanding problems like TBTF and Net Neutrality in terms of domination in turn raises a number of under-emphasized responses that focus not on economic efficiency or consumer welfare or prices, but rather on securing mechanisms for limiting such arbitrary power, by approximating methods of contestation and accountability for these private actors.  Specifically, this paper considers the role of regulation as a way of facilitating the contestation and accountability of such concentrations of private power.  This represents a similarly different view of regulatory responses to private power: the focus here is not on closing market failures or optimizing market efficiency, but rather on creating vehicles and mechanisms through which social actors can contest and check the power of private actors who have accumulated a concentrated power over key social goods, services, and functions.