Review: Matt Stoller’s ‘Goliath’

Battling big business for over a century

Amazon's largest campus building in Hyderabad, India / Getty Images

Thanks to the ascent of tech giants such as Google, Facebook, and Amazon, legislators, policy analysts, and pundits are taking a fresh look at antitrust law. The time is ripe for books laying out both sides of this issue: the populist case that we need to smack down companies that get too big and powerful, and the libertarian case that the government should keep its clumsy hands off our most successful businesses.

I had my hopes up that Goliath, a sizable tome from Matt Stoller of the Open Markets Institute, would provide the former case. After all, Open Markets has led the charge for breaking up big businesses, and Stoller is one of its leading lights. But I wound up disappointed—in part because Stoller didn't write the book I wanted him to, which is hardly his fault, but also in part because Goliath so often relies on raw assertions rather than careful arguments.

The book's subtitle is "The 100-Year War Between Monopoly Power and Democracy," and the work is, indeed, primarily an explanation of a century's worth of history. The overarching narrative is this: Populist legislators—folks like Wright Patman, Goliath‘s Texan hero, who served in the House of Representatives as a Democrat from the 1920s to the 1970s—once stood up for the little guy, passing laws that sharply limited the power of chain stores and other evil big corporations. But in the second half of the 20th century, corporate interests won out, capturing both the right (via the Chicago school of economics) and the left (via, among others, the neoliberals, who accept free-market economics but tend to support more redistribution than do the Chicago schoolers).

There is, to the book's credit, a lot of interesting history and perspective here. The ideology-warping alliances and rivalries Stoller forms with figures across the centuries can be fascinating and even shocking.

When it comes to his hero Patman, Stoller has to awkwardly concede that the Texas representative signed the Southern Manifesto opposing desegregation. The author also points out how different kinds of big-government liberals see big business differently; historically, some technocratic types (Richard Hofstadter, John Kenneth Galbraith) envisioned business, government, and labor working together to solve problems at the national level—which, they realized, is a lot harder if businesses are small and scattered rather than huge and consolidated. Ralph Nader is a bad guy here too, because he cared about protecting consumers, not about shrinking the size of big corporations, and fought "fair trade" laws that prevented big companies from discounting products. The "Watergate babies," fiery young Democrats elected amid Nixon's demise who staunchly opposed the war in Vietnam and supported civil liberties, are also on the wrong side of antitrust history, because they sidelined Patman and his big-is-bad way of viewing the world, considering it an artifact of a bygone era.

The problem with the book is that all this history is shown through a lens in which Patman and his allies are simply correct, and conservatives and neoliberals are simply wrong. If you go into Goliath expecting Stoller to prove to you why it's important to keep big companies in check, and to fairly and thoroughly examine arguments to the contrary, you'll be as disappointed as I was.

There is, after all, a lot of debate spanning many decades about the question of when a business gets too big. Most people will agree an outright monopoly can be bad, but it's hard to say how much market share a business needs to be a "monopoly" and what constitutes a "market" for such an analysis. And there's even more debate about concentration that falls short of monopoly. Bigger businesses can achieve economies of scale, but their large size might also give them the power to, say, hold down wages or extract unreasonable and anticompetitive concessions from the other businesses they deal with. There are some recent books—Robert D. Atkinson and Michael Lind's Big Is Beautiful, Tyler Cowen's Big Business: A Love Letter to an American Anti-Hero—that Stoller could have tangled with on points like these. He doesn't.

Instead, whether he's narrating historical events or describing the ideas that shaped the modern debate over these topics, he simply asserts that the anti-big crowd is right. The early-20th-century retail giant A&P succeeded largely on the basis of raw power, not efficiency. Early academic articles from Chicago schoolers "proved" things—his scare quotes—but were in reality "pseudoscience" and "didn't win the substantive argument against antimonopolist economists." Nobel Prizes in economics won by these folks are just evidence that their funders' money was "well spent"—it couldn't be that the Chicago school made major contributions to our understanding of markets. Antitrust actions against IBM and AT&T were so important that the Internet as we know it might not exist without them.

Especially disappointing is Stoller's treatment of Robert Bork, who argued that the Sherman Act, a major antitrust statute passed in 1890, was designed to protect consumers from high prices, not to shield small businesses against big ones or to preserve competition more generally. This argument eventually won over the Supreme Court and resulted in dramatically scaled-back enforcement of those policies. Some modern scholars, however, contend that Bork got the law and its history wrong—which ought to interest conservative originalists, who care a lot about what laws meant when they were first enacted, and who believe judges should hew to that meaning even if they disagree with it.

Stoller's take on this key matter? Just that Bork's analysis is a "fiction."

Encountering pretty much any key claim in Goliath, the skeptical reader says to himself, "I bet there's another side to that that muddies things a bit." Indeed, Atkinson has already pushed back against Stoller's A&P narrative, and David Henderson has stepped up to defend Aaron Director, a Chicago schooler Stoller assails both in Goliath and in a separate essay.

It is uncertain how long juggernauts like Facebook and Google will remain dominant, and I'm not sure it would improve things for the government to smash them to pieces. I'm open to further arguments on both sides. Sadly, Goliath, while weighing in at about 600 pages, doesn't provide many.