American History Tellers - The Gilded Age | What America Failed to Learn from the Gilded Age | 7

Episode Date: September 2, 2020

Throughout our series, corporate giants and their exploitation of workers was disturbing evidence of capitalism run amok. That greed and disregard for the working class defined the Gilded Age. But the problems of that era haven’t disappeared. The economic disparities that were forged in the Gilded Age are still affecting our country. And monolithic companies like Facebook and Apple continue to grow, leaving a burning question of whether big tech has too much power. Today, Lindsay speaks with Tim Wu, a Columbia law professor and author of “The Curse of Bigness: Antitrust in the New Gilded Age,” about the economic and social changes that took place then, and how they set the stage for modern America. For more on Tim Wu: http://www.timwu.org/about.htmlListen ad-free on Wondery+ hereSupport us by supporting our sponsors!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wondery Plus subscribers can binge new seasons of American History Tellers early and ad-free right now. Join Wondery Plus in the Wondery app or on Apple Podcasts. Imagine it's December 1900 in Westchester, New York. You're just finishing off a round of 18 holes of golf with your boss, Andrew Carnegie, and now you're sitting down for dinner at his cottage near the course. You're the president of the Carnegie Steel Company, but you have a much bigger vision in store. You're hoping to engineer a merger of the nation's largest steel firms, and you've brought in top banker J.P. Morgan to lead the venture.

But first, you have to do the unimaginable. You have to convince your boss to sell his steel empire to Morgan. Carnegie chuckles as he takes a sip of brandy. I have to say, Charles, not your best game today. You feign a sheepish grin. Guess I'm out of practice. Too much time behind a desk, but clearly your swing has never been better. That's because I have natural talent.

I'd say you've been spending more time on the course lately. Why not go all the way? I hear Louise is ready for you to retire. Uh, she told you too, huh? Yes, she's been nagging me for years to spend more time at home. Carnegie then narrows his gaze. But why do you ask? You brace yourself. This is a delicate matter, but there's no way around it. Well, what would you say if I told you that Morgan wants to buy you out? Ah, there it is. Now I see why you played so poorly today.

You're just trying to butter me up. Louise may have hinted that winning a round of golf tends to make you more cooperative, so... Yes. Anyways, what do you say? What do I say? I say? I say that I don't submit to anyone, and certainly not J.P. Morgan. That's not the way I do business.

You follow Carnegie as he gets up to take a seat beside the fire. Yeah, but what else is left? You've achieved new heights of production, maximized efficiency, squeezed every last dollar out of your workers. Surely business can only go downhill from here. The European steelmakers are growing, and you never know when the next depression will hit. Carnegie looks unconvinced, so you try a new tack. And then finally, you'd be free to pursue your other passions. Don't think I didn't read your book. I think more people should have read it. I'm glad you did, though. Yes, I would like more time for my charitable endeavors. Precisely. And if you sell, just think what you could do with the extra money.

That's a new century. Leave the day-to-day grind to the rest of us. There is so much more to do. To advance knowledge, boost scientific research. You know, I consider it my duty to devote my wealth and talents to promoting the greater progress of society. Yes, all the more reason. Name your price. I'll take it to Morgan. Carnegie reaches into his pocket and pulls out a scrap of paper and a blunt pencil stub. All right. I'll agree to sell if Morgan can meet this number.

He hands you the slip of paper. Your eyes go wide as you read the figure he scrawled. $480 million. And mind you, I want payment in gold-backed bonds, not watered stock. Noted. I'll take this to Morgan myself tomorrow. You tuck the paper into your pocket and stare off into the fire, your head swimming with visions of your future,

reigning atop the American steel industry. If Morgan agrees to Carnegie's terms, he'll form the largest corporation in the world, and if all goes to plan, place you in charge. With Audible, there's more to imagine when you listen. Whether you listen to stories, motivation, expert advice, any genre you love. You can be inspired to imagine new worlds, new possibilities, new ways of thinking. And Audible makes it easy to be inspired and entertained as a part of your everyday routine

without needing to set aside extra time. As an Audible member, you choose one title a month to keep from their ever-growing catalog. Explore themes of friendship, loss, and hope with remarkably bright creatures by Shelby Van Pelt. Find what piques your imagination. Sign up for a free 30-day Audible trial, and your first audiobook is free.

Visit audible.ca to sign up. For more than two centuries, the White House has been the stage for some of the most dramatic scenes in American history. Inspired by the hit podcast American History Tellers, Wondery and William Morrow present the new book, The Hidden History of the White House. Each chapter will bring you inside the fierce power struggles, the world-altering decisions, and shocking scandals that have shaped our nation. You'll be there when the very foundations of the

White House are laid in 1792, and you'll watch as the British burn it down in 1814. Then you'll hear the intimate conversations between FDR and Winston Churchill as they make plans to defeat Nazi forces in 1941. And you'll be in the Situation Room when President Barack Obama approves the raid to bring down the most infamous terrorist in American history. Order The Hidden History of the White House now in hardcover or digital edition, wherever you get your books. From Wondery, I'm Lindsey Graham, and this magnate Andrew Carnegie, to play 18 holes at St. Andrew's Golf Course in New York. After a relaxed afternoon and a quiet dinner in Carnegie's cottage, Schwab finally broached the real reason for his visit to persuade Carnegie to sell his company to J.P. Morgan,

Wall Street's most powerful banker. Schwab succeeded by convincing Carnegie that selling would leave him more time to pursue his charitable endeavors, and Carnegie agreed. The sale merged Carnegie's empire with nine other companies to form the United States Steel Corporation, creating the world's first billion-dollar enterprise. The deal made Carnegie the richest man on earth, and after selling his company, he did devote himself fully to philanthropy. Carnegie knew that his unimaginable wealth was built on the back of

working people, and he sought to justify his fortune by giving it away to fund libraries and universities. He believed that extreme inequality was a necessary price to pay for the greater progress of society as a whole. But for the average worker, the creation of U.S. steel and the corporate giants like it was nothing more than disturbing evidence of capitalism run amok, the culmination of the greed and exploitation that defined the Gilded Age. Today we talk with Tim Wu, a Columbia Law professor and author of The Curse of Bigness, Antitrust in the New Gilded Age. We talk about the economic and social changes that took place then, how they set the stage for modern America, and where big business stands today. Here's our conversation. So Tim Wu, thank you for speaking with me today.

Thank you for having me. So, the Gilded Age was a period of huge economic and social transformation in the United States. Your book, The Curse of Bigness, Antitrust, and the New Gilded Age, indicates that we might be revisiting that era of change. But then, in the first Gilded Age, America was clearly more homogenous, with less economic disparity and a lack of scale in corporate America. What changed during the original Gild big business, the creation of the first industry-spawning monopolies. These were something truly new to the American landscape. There was a period in which anything of any size, frankly, in most of the world, was governmental. Genghis Khan's army, the Great Wall of China, the British government

and its fleet. These were military or government projects. The idea of private industry, private enterprise, having national scale things, industry-wide monopolies, this was new to the Gilded Age. So this newness, how did it change American culture? Well, maybe we should be careful about what we're talking about here. So there had always been business in America, obviously, and there had always been farmers, agriculture. There had even been larger businesses. But the idea of a national business, that was something new.

The idea of a monopoly, the only seller of a product, that was completely new. The first of these monopolies was the Western Union Telegraph Company. And I think it's telling that it played a role that had traditionally been played by the federal government. The post office delivered mail. Telegraph Company delivered messages electronically. But this was done by a company, a monopolys, general stores, maybe some sort of larger department stores, into one that is much more actually like we know today, you know, dominated by large corporations. Instead of owners or managers, people became

employees of a much larger concern with its headquarters somewhere far away. So all of this was a fundamental challenge, I'd say, to the hierarchy, to the structure, to the social life of the United States. Not to mention the premises of equality that had long undergirded the idea of the American Republic. Well, let's talk about equality, in particular, income or wealth equality. This was also the rise of the ultra-millionaire, the very wealthy people who heretofore had never even been imagined in their scale, scope, and power. How did wealth change in America during the Gilded Age? Well, yeah, that's an important change,

maybe one of the most important for our purposes, thinking about our times. Alex de Tocqueville had famously come to America in the 1830s, and the opening line of Democracy in America, and I'm translating from French, there's different translations, but roughly he said, the most striking thing about America is the equality of conditions everywhere. And by that, I think he meant that, you know, it was a nation where you could arrive, you know, set up your own farm or start your own dry goods business. And you were all sort of in it together, particularly on the frontier. People were facing nature and the challenges of just survival and, you know, had to kind of work

together to do it and really weren't greatly different in their wealth and income. I mean, there was always Eastern people with more money, established families down south. But generally, that was the idea of the American Republic. The monopolization of the American economy dramatically transformed that equation. And it did so in several ways. So one of the main techniques for monopolizing the economy was to combine all of the companies in one industry into a single company. So for example, U.S. Steel, which was created by J.P. Morgan, was a buyout of hundreds of steel companies, including Carnegie Steel Company, all into

a single unit called U.S. Steel. There was a single tobacco company made of all of the tobacco companies, a single match company, a single film company, a single, you name it, there was one company. And these combinations, trusts was the word, they tended to be public companies through monopoly were able to eliminate competition and improve their livelihood and therefore produce fantastic gains for the owner of the stocks, the owners of the companies who had sold out, and some of the investors. So that was a big transformation. U.S. Steel steel itself the proceeds from that sale transformed the town of pittsburgh with all the money coming in from steel stock and the ability

of build to build mansions and so even even today you know we talk about an ipo enriching people these were even greater at least in relative magnitude because they created the wealth differential that was so large. And the other big change is with these concentrated economies, with these big companies, they had and used scale and used employees at a level of scale never been seen before. So you have the beginnings of what we now recognize as the working class, that is huge armies of nominally free labor, but people who are working for a very large company under difficult conditions for low wages.

And that too was something new. And as I said, a nation that had thought of itself as more of an agricultural country. So the disparity in wealth that has become almost the trademark of the United States in the last 20 years or so has its birthplace, has its origins in the Gilded Age. And as I think you can see, many of the causes of it are very similar. You mentioned both J.P. Morgan and Andrew Carnegie. These titans of ministry were all self-made men. They didn't have wealthy backgrounds. They knew what it was like to be an average American because they were, but they created enormous fortunes often by exploiting

other business owners and their workers. What is the ideology behind men like this who can see that not only their own fortunes improving, but the fortunes of what were their neighbors and townspeople changing so drastically. The people to focus on in that regard are really John Rockefeller and Andrew Carnegie. You know, they were, as you said, people who came from humble backgrounds and built up these empires one way or another. Rockefeller obviously built up Standard Oil in the 1870s, the largest company in the world until U.S. Steel. And he was at the time, Rockefeller,

so wealthy as a percentage of GNP that no one has equaled him since. You know, we talk about how rich Jeff Bezos might be or Bill Gates or similar figures. But there was no comparison in terms of their share of the national economy. You know, you have to sort of compare them to some of the old pharaohs or something. So, you know, how were they able to sort of sustain this idea? Well, much of this was reflected in the popularity of social Darwinism, a philosophy, for some a religion, popularized by a man named Herbert Spencer, who was an English philosopher who borrowed heavily from the ideas of Charles Darwin. And the idea was roughly that humanity was in the course of an evolutionary process

where those who were more fit, those who are more capable, were in the process of rising above their peers, of becoming a new man towards a different kind of society, towards a different economy. For some people like Andrew Carnegie, it began to function almost like a religion, you know, that Christianity had been too much about humility and, you know, the meek shall inherit the earth and that sort of thing. No, this was a different kind of vision. This was human perfectibility. And so then by this logic, you can see why it would appeal to the then millionaire, billionaire class. It suggested that chosen ones were those who had proven it. The men, usually men, I guess some women who were putting together these giant fortunes,

who were destroying other companies, they had won the fight. And a company like Standard Oil was clearly the victor, was clearly the fittest that had beaten out all of its other competitors. So you can see that evolutionary theory bled quite easily into this sort of idea of industrial competition producing winners and losers. Winner corporations, the winner companies like Standard Oil, like U.S. Steel, they were deserved of their exalted status, deserved all this money, because they had won in the struggle of survival, and they had killed or destroyed their sort of lesser competitors, or bought them out or done whatever. And I think that this philosophy, this way of thinking about things, did a lot to make it comfortable for these men to do what they did.

There is, in this period, you begin to see a birth of a kind of dual morality, a set of principles for one's private life that are different than what one does in public life. J.P. Morgan was a devout Christian. So was John Rockefeller. They gave conspicuously to charity. J.P. Morgan was a major figure in his church. But, you know, when they were on business, somehow it all changed. They had a completely different outlook. It wasn't about, you know, helping the poor or they just took advantage of anything they could. They competed roughly, even brutally.

J.P. Morgan, even though it was a church-going figure in his private life with a family, he would get aboard his yacht and have a succession of female visitors and a kind of debaucherous lifestyle. So, they had this kind of divide in their lives that I think we still see today sometimes. I still think there's a lot of people who, you know, would consider themselves sort of moral, careful people in some aspects of life. But then when it comes to business, well, that's different. You know, that you have to kind of set aside your thinking about what's right and wrong and get to the business of winning. And that's the way we do things. And I think this era is really where you start to see the birth of that divide in how businessmen approach morality. Not all businessmen, I should say, but that that

becomes normalized, I guess. So in my thinking just now about social Darwinism and monopolies, it occurs to me that Darwinism, even in business, would entail that the best idea wins, the best process, the most efficient. And monopolies certainly achieve their scale through the ruthless pursuit of efficiency. But once they get big enough to squash competitors, the ascendance of new ideas, the lack of competition, threatens to stagnate the industry because the little guy with the great idea can't achieve much. It requires, at least at some level, an even playing field to allow the ideas to germinate. This seems to be a metaphor also for those persons who come to America with nothing, looking for exactly that even playing field. And this is the immigrant population, which exploded during the Gilded Age. What was their reception in American society?

How did government react? And how is this a Gilded Age phenomenon? Yeah, you know, you have put your finger on the heart of the monopoly paradox, which is to say these were men who ideologically said they were committed to competition, to the survival of the fittest, to, you know, let everyone have their go. But the methods they use to stay in power, the buying out of firms, predatory pricing, bribing government officials, enacting tariffs when necessary,

putting restrictions on immigrants, all were designed to make competition entirely unfair and, in fact, to continue their incumbency and ensure that they would never be displaced from power. So it was a competition for everyone except for us, because we have won. And yeah, it wasn't ever clear. There's always been, and still is today, this great tension between a belief in competition unfettered and the sense that leads to monopoly and totally unfettered monopolies can, in fact, destroy competition. Well, they didn't really work too hard to figure out the answers to that question.

And I think you were right. I think any advantage there was to try to prevent immigrants from becoming serious threats, any opportunity was taken to restrict that. I was thinking about the Chinese labor as a good example. As you probably know, there were the first immigration laws in this period placed serious restrictions on Chinese immigration. But beyond that, people may know this less, there were simply bans on the kind of work that Chinese immigrants were allowed to do. You know, they were restricted from certain forms of business, maybe from the fear they might be too tough competition. Which is why if you watch an old movie, you'll see the Chinese people running the laundromats.

That's because that's where they were restricted to. So yes, a great contradiction in the center of it, and one that ends to look more like a self-perpetuating ideology rather than something truly committed to some rise of excellence. In a quiet suburb, a community is shattered by the death of a beloved wife and mother. But this tragic loss of life quickly turns into something even darker. Her husband had tried to hire a hitman on the dark web to kill her. And she wasn't the only target.

Because buried in the depths of the internet is The Kill List, a cache of chilling documents containing names, photos, addresses, and specific instructions for people's murders. This podcast is the true story of how I ended up in a race against time to warn those who lives were in danger. And it turns out, convincing a total stranger someone wants them dead is not easy. Follow Kill List on the Wondery app or wherever you get your podcasts. You can listen to Kill List and more Exhibit C True Crime shows like Morbid early and ad-free right now by joining Wondery+.

Check out Exhibit C in the Wondery app for all your true crime listening. In the Pacific Ocean, halfway between Peru and New Zealand, lies a tiny volcanic island. It's a little-known British territory called Pitcairn, and it harboured a deep, dark scandal. There wouldn't be a girl on Pitcairn once they reach the age of 10 that would still have heard it. It just happens to all of us i'm journalist luke jones and for almost two years i've been investigating a shocking story that has left deep scars on generations of women and girls from pit can when there's nobody watching nobody going to report it people will get away with what they can get away with in the pit can trials i'll be uncovering a story of abuse

and the fight for justice that has brought a unique, lonely Pacific island to the brink of extinction. Listen to the Pitcairn Trials exclusively on Wondery+. Join Wondery in the Wondery app, Apple Podcasts or Spotify. I think the scope of the Chinese Exclusion Act of 1882, which is probably what we're talking about here, is enormous and quite appalling to modern Americans. It, for decades, prohibited Chinese immigration and, as you mentioned, limits their participation in American society quite a bit. What were the lasting impacts of this act?

Yeah, it's a good question. I think that to this day has, I think, left the Asian American population, if I can talk about now, somewhat with a sense that, you know, from the beginning, there are certain jobs that they are more welcome to do and certain that they're less welcome to do, such as running things, as opposed to, you know, from the beginning, there are certain jobs that they are more welcome to do and certain that they're less welcome to do, such as running things, as opposed to, you know, being in the back office and making things work. So that's my, you know, my own opinion. But I feel like I've seen that with some of my peers. And obviously, you know, speaking on racial history, less my theory, you know, just the sheer act of a ban on immigration resulted in there being less Chinese people in the West. So those are, I think, the most obvious impacts of that law. Your book spells out dangers that come with income inequality, and those dangers include populism. We saw in our series the rise of a populist party,

but what are some parallels in how disparities in wealth today have sparked the same sentiments in the present moment? Yes, I am strongly of the belief that behind every period of exceptionally angry politics lies a failure to distribute economic proceeds in a fair way and give the middle class a sense that they're being treated in a reasonable fashion. That's certainly the case of the turn of the 19th to 20th century, which we're talking about. It's very strongly the case in the 1930s, during which we saw the rise of fascism around the world. And I think, and very much a feature of our times, I think that we are in a danger,

a period where the politics of the late 19th century and the 30s have replicated themselves, where ordinary sort of working people, middle class, feel that the deck is stacked against them and feel that they have no chance, I suppose, in an economy that is dominated by concentrated interests. Now, people take that in different directions. You know, they know they're angry. Some people blame corporations. Other people, as in other times, turn to blame

immigrants, foreigners, the Chinese, Jewish conspiracies. You know, anger goes in a lot of different directions. But it turns us into a radical kind of politics. I think it creates the potential, as it did in the 30s, for the rise of very dangerous figures. If I can return to the Gilded Age, I also think there is in some ways a solution or it's helpful to look at how other countries dealt with it without having a full-out revolution. If we turn back to the early 20th century, I give a lot of credit in my book to Theodore Roosevelt, who was not always exactly seen as a hero of the working classes, but he did recognize this important fact. He felt very profoundly that there was a tension between the rise of monopoly corporations with so much private power and the premise of democracy, which was that the people rule the country and that at some point in the end, they get to say

what happens. Because by that point, you know, men like J.P. Morgan, Rockefeller, I truly think they believe themselves sovereign over government, that they were the ones running the economy, that they decided what was going to happen, and in fact, that they knew best. And Roosevelt, when he took the sort of startling maneuvers of blocking a major merger by J.P. Morgan of two railroad companies, and then breaking Standard Oil into 35 pieces, that he was using the antitrust laws as an instrument of democratic will. He was saying that at some point here, the people rule. And I think he deserves enormous credit for that, especially in the sense that he used this law that, you know, he didn't confiscate. It wasn't like the Soviet Union where they just sort of nationalize their corporations. It wasn't like in fascist Germany, actually,

that's the most dangerous direction where the corporations became sort of the instruments of the leader's will. Instead, he reduced their power. And it's a profound move and one that I think he does deserve more credit for. Well, let's talk about Roosevelt and the progressive movement. There seems to be a sea change in American governance and politicians' view of these corporations and the concentration of wealth and power. From this comes some legislation at the end of the 19th century, and then certainly its implementation in the early 20th century. Where did that antitrust argument come from?

That's a good question. You know, like almost all things in America, every revolution is described as a counter-revolution. And the people who were behind the antitrust movement, figures like Louis Brandeis, to some degree Theodore Roosevelt, and an earlier generation of activists who fought against Standard Oil, these people all hearken back to the way America used to be. And the idea that the founding ideas of the republic were that any concentration of power had to be viewed as suspect, and that this was meant to be not only a political democracy, but also an economic democracy. So those were the ideas that they drew upon. They also, as is very common in American history, drew upon English sources, English

traditions. And it had been a tradition in England since the time of Queen Elizabeth, or it had been the law that monopolies were illegal. It was a little vague what that meant. They usually meant state monopolies, but you had was a little vague what that meant. They usually meant state monopolies, but you had had the Tea Party in the United States, the original Tea Party, as an anti-monopoly protest. And so there was this idea of both combining what America was supposed to be and English sources of law and English traditions inherited by Americans to create this, actually a truly American invention, the antitrust laws, the idea that there should be some outer limit on private power, that the economy should not be run by monopolies. And in the progressive era,

you know, this was a heated, heated movement. This was something people believed passionately about. You have figures like Ida Tarbell, who wrote a multi-part series on the Standard Oil Company, revealed it for what she said it was, which was an abusive, immoral colossus that had sort of taken something from the American people. And, you know, it was so intense, so driven that the 1912 election, when you go back and read the debates, you know, they read like an antitrust academic conference. The discussion is about economic structure. And actually, at some level, I think we are somewhat having that conversation today. When people talk about big tech, when candidates say that I want to break

up Facebook or, you know, reduce the power of Amazon, in some ways, it is back to that conversation. And frankly, I don't think you could be having a more important conversation. At least to me, it's better than the prospect of an actual revolution, anarchist, socialist, or fascist, which is sort of the other alternative. Speaking of big tech, last month there were congressional hearings regarding whether tech giants have too much power. So in thinking about the monopolies of the Gilded Age, what worries do you have about any parallels from that time and what's going on now with the immense power of Facebook, Amazon, Apple, and Google? I think there are parallels. As in the Gilded Age,

there's a sort of new generation of companies claiming a different way of doing business. It's sort of imbued with a sense that they are somehow profoundly different, and in some ways they are. And they have the same form, the monopoly form, that was popular. And also, especially companies like Facebook and Amazon have gained their position by mergers, by buying out anyone who might be threatening to them. I should add Google to that as well. So there are great similarities. And similarly, you know, much of the public in the Gilded Age was in awe of the companies like U.S. Steel or Standard Oil, amazed by their scientific progress and so forth. So I think there's a lot of similarities.

But I think ultimately, to recapture our freedom, to have this be a democracy, we need a reckoning. We are having a reckoning where the companies accept that they are ruled by the people at some level. And that, you know, despite the technology, whatever advances they have, that there are interests in human thriving that at some point they will have to respect or find themselves facing the ultimate power in this country, which is the sovereign. you're at the grocery store. Or maybe you're with your secret lover. Or maybe you're robbing a bank. Based on the real-life false alarm that terrified Hawaii in 2018, Incoming, a brand new fiction podcast exclusively on Wondery Plus, follows the journey of a variety of characters as they confront the unimaginable. The missiles are coming. What am I supposed to do? Featuring incredible performances from Tracy Letts, Mary Lou Henner, Mary Elizabeth Ellis, Paul Edelstein, and many, many more, Incoming is a hilariously thrilling podcast that will leave you wondering, how would you spend your last few minutes on Earth?

You can binge Incoming exclusively and ad-free on Wondery+. Join Wondery+, in the Wondery app, Apple Podcasts, or Spotify. Richard Bandler revolutionized the world of self-help all thanks to an approach he developed called neurolinguistic programming. Even though NLP worked for some, its methods have been criticized for being dangerous in the wrong hands. Throw in Richard's dark past as a cocaine addict and murder suspect, and you can't help but wonder what his true intentions were. I'm Saatchi Cole. And I'm Sarah Hagee. And we're the hosts of Scamfluencers, a weekly podcast from Wondery that takes you along the twists and turns of the most infamous

scams of all time, the impact on victims, and what's left once the facade falls away. We recently dove into the story of the godfather of modern mental manipulation, Richard Bandler, whose methods inspired some of the most toxic and criminal self-help movements of the last two decades. Follow Scamfluencers on the Wondery app or wherever you get your podcasts. You can listen to Scamfluencers and more Exhibit C true crime shows like Morbid and Kill List early and ad-free right now by joining Wondery Plus. Check out Exhibit C in the Wondery app for all your true crime listening. I'm interested in the implementation of antitrust law. Although Standard Oil was broken up, Rockefeller still owned most of it and continued to reap benefits.

Do these antitrust laws work, especially now, in a moment in which the last two decades saw several industries that are just too big to fail? It's been a persistent question, you know, do these laws work since their beginnings? And it is a hard question. I think that you need to compare it to the alternatives. The main thing that America did with its laws was it broke up most of the monopolies it banned mergers to monopolies so you weren't allowed to put everyone together and it banned price fixing cartels in countries like germany and japan early 20th century they didn't take

that approach they in fact encouraged and saw the monopoly companies as kind of helping the national cause. And I think, I won't say that caused what was to follow, but I do think when it came time, for example, for Hitler to redirect the economy towards the war effort, for him, it was only a matter of needing to convert a few people, convince them of the merits of his cause. And he already had a command economy built for him. In Japan, the crossover between public and private spheres was complete. There was no, almost no line between private industry and government. And I think to the extent that antitrust has prevented the worst abuses that it has merit, and it could always be better. It's difficult to prevent enforcement. I think it should do more to prevent corruption. But some core prohibitions are very important in my

mind for preventing a total transformation of the economy and a total shift of power to such a small number of people. And what do you think those core prohibitions are? Well, you know, how much time do you have? It's a subject of a full semester at Columbia. But the core, as I said, I think you have to prevent an industry from becoming monopolized or duopolized or even triopolized. I think major industries should be kept at four players, for example. And despite whatever excuses, despite whatever, oh, it's going to be better and so forth, natural monopoly is always better. That is better kept at bay. There's too much power in one person. And I think the most anti-competitive mergers, the buying of your competitors or the merging of a whole industry, as Morgan did,

into a monopoly is also exceptionally a dangerous phenomenon. Those are kind of at the core. Price fixing is another one that you widely banned. If know, if we could just keep that going, just prevent those things, prevent the killing of smaller competitors, I think that puts some limit on private power. Now, a skeptic would say, you know, that's not really enough. And in some ways I agree.

I also believe in things like minimum wage laws and other protections from the outskirts of capitalism. limit on power, which is very different than saying, okay, you can run this industry, but we want you to obey health and safety laws, something like that. No, this gets to the core of who rules, who has power, and that lies at the core of the anti-monopoly prohibition. I think perhaps second only to our First Amendment rights, there's nothing more innately American that Americans feel about themselves anyway than the purpose and divinity even of the free market.

Capitalism is something that this country was built on. It's something that this country pursues. A quick survey of other leading countries shows that we are more unfettered than others. So there is this tension between a unique American faith in capitalism and antitrust or any sort of legislative limits on it? I'm reading right now some research on the history of business consulting,

a field that is perhaps reviled now, but started in the mid-century, mid-20th century, with ideas and insights that indicate, for instance, any mature industry would only have at maximum four players, and yet you've just indicated that there should be a minimum of four players. This tension of what works in business, what Americans think capitalism is, and then what they desire protection from, how is it reconciled? Well, we're still figuring that out, aren't we? You know, it is, I think a lot of Americans believe the golden goose, but I like to look at the alternatives and maybe that's unfair, but, you know, the traditional alternatives to trying to limit the power through structure, which is the idea of antitrust, are nationalization, which is usually, not always, part of a socialist economy, a planned economy, relatedly, sort of Mussolini approach. On the other side,

an entirely unfettered capitalism, which has the results of such severe inequality that it leads, once again, to the pressures for a popular uprising. So, you know, I don't know if I will defend antitrust laws to the death, but I do think it is an effort to deal with the excesses of capitalism within its own terms, or make a free market system actually a free market system. Because a free market system, despite everything that's said about it, always bites its own tail, always has the capacity to become and take over and isolate itself from, in fact, the free market, and instead turn into something which is very different from that. Just in, for example, the control of government, any corporation past certain size will realize that to stay in power and maximize its profit, the thing to do

is to control government. Look at the pharmaceutical industry, it's a perfect example. And you can say, well, that sounds alarmist. I don't think it's alarmist. I think it's a natural calculation. But once you have that union of government and industry, you no longer have anything like a free market system. So the free market system, you know, some of the anti-fascist Germans in the 30s had the saying, which is that freedom must be defended to stay free, and that the free market left to itself will always turn on itself. So that's the tradition I believe in. And that's what I think we need in our times if we do want to preserve this engine of growth, which I think works for people and avoid its excesses. Timothy Wu, thank you for speaking with me today.

Been a pleasure. That was my conversation with Tim Wu. Wu is a Columbia law professor and author of The Curse of Bigness, Antitrust in the New Gilded Age. Next on American History Tellers, an encore presentation of our series on the history of political parties in the United States. It hasn't always been the Democrats and Republicans. In the run-up to our next election in November of 2020, learn how what started as unanimous enthusiasm for George Washington led nearly immediately to a struggle for power between political parties

led by idealists, partisans, statesmen, and schemers. From Wondery, this is Episode 7 of The Gilded Age for American History Tellers. I also have two other podcasts you might like, American Scandal and American Election's Wicked Game. If you like American History Tellers, you can binge all episodes early and ad-free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts. Prime members can listen ad-free on Amazon Music. And before you go, tell us about yourself by filling out a short survey at wondery.com slash survey. American History Tellers is hosted, edited, and produced by me,

Lindsey Graham for Airship. This episode was produced by Audrey Ngo. Our executive producers are Jenny Lara Beckman and Marshall Louis. Created by Hernán López for Wondery. Now streaming. Welcome to Buy It Now. The show where aspiring entrepreneurs get the opportunity of a lifetime. I wouldn't be chasing it if I didn't believe that the world needs this product.

In each episode, the entrepreneurs get 90 seconds to pitch to an audience of potential customers. This is match point, baby. If the audience liked the product, they'd pitch them in front of our panel of experts, Gwyneth Paltrow, Anthony Anderson, Tabitha Brown, Tony Hawk, Christian Siriano. These panelists are looking for entrepreneurs whose ideas best fit the criteria of the four P's. Pitch, product, popularity, and problem-solving ability. I'm going to give you a yes. I want to see it. If our panelists like the product, it goes into the Amazon Buy It Now store. You are the embodiment of what an American entrepreneur is. Oh my God.

Are we excited for this moment? Ah! I cannot believe it. Woo! Buy It Now. Stream free on Freevi and Prime Video.