A book overview of The Curse of Bigness: How Corporate Giants Came to Rule the World
My memories of playing Monopoly with family and friends are not happy ones. Sure, there were moments of ecstasy like landing on Free Parking to swipe everyone’s tax dollars. Yet the very next turn, my anxiety would set in because I knew that I was within a roll of the GO TO JAIL tile, not to mention the hotel on Regent Street. What usually began as a friendly game would invariably become a competition, borne of paranoia and lawlessness.
Accusations would fly, money would be stolen, and rules would be bent. If we managed to finish a game – before it was destroyed by a row – nothing quite beat that feeling of domination, bankrupting my competitors and becoming the king of real estate once and for all.
I doubt that this twisted nostalgia was the feeling that author Tim Wu intended when writing The Curse of Bigness: How Corporate Giants Came to Rule the World. Yet there was an uncanny resemblance with many of his book’s stories and my memories of playing Monopoly.
Wu is a professor at Columbia Law School in the USA whose other books include elaborate assessments of the attention economy and the rise and fall of monopoly empires. The Curse of Bigness is a short and riveting overview of the shortcomings of monopolies and why we need stronger anti-monopoly laws. Wu’s warning is clear: monopoly is bad. And he is not referring to the board game, but the concentration of power and ownership within any industry.
Wu’s most extreme examples of monopolised power referred to dictatorships of World War II – a period when the whole world suffered from the curse of bigness. A close cousin of monopoly were German cartels – “industry-wide organisations…that acted to coordinate industry pricing, product quality and other relevant matters.” Wu argues that cartels played a vital role in “Hitler’s ability to consolidate power and transform the German state into a command economy designed for warfare.”
Following the war, nations from around the world adopted anti-monopoly laws in an effort to restructure the economy. West Germany flourished economically in 1958 with a massive increase in production. Wu notes that “the peak of anti-monopoly enforcement coincided with a period of extraordinary gains in prosperity in the industrialised world, and also gains in wealth and income equality.”
However, the golden age of anti-monopoly became stagnant. Constant pushback from wannabe monopolists eventually prevailed as “peak anti-trust” came to a halt and anti-monopoly was placed into a “deep freeze”.
Today, Wu highlights two economic facts: the re-emergence of an outrageous divide between the rich and the poor, and the return to industries that are dominated by fewer and larger companies.
A recent example of the re-emergence of monopoly is the eyewear industry. The range of high-end sunglasses that we see in Sunglass Hut might suggest healthy competition. Wu describes this as a “grand deception”.
In fact, each brand in the retail store is either owned or exclusively licensed by Luxottica – the world’s eyeglass monopolist. This retail power gives Luxottica influence over competition and pricing. Despite the improvements in manufacturing efficiency, prices of sunglasses are increasing, sometimes surpassing 5000 per cent of the unit cost.
The worst nightmare for anti-monopolists is the tech industry. The tech boom of the 1990s and 2000s presented unprecedented growth and dominance by just a handful of companies. The result is an “extreme version of global economic monopoly.” Wu spotlights Google, Amazon, Apple, and Facebook as the prime tech monopolists.
The rate at which tech is evolving and gaining power is a phenomenon that government bodies around the world can’t seem to keep up with. With anti-monopoly still frozen away, these companies have gone unchallenged on many massive acquisitions of competing companies. Facebook’s purchases of Instagram for $1bn USD in 2012 and WhatsApp for $19bn USD in 2014 are two of the most blatant examples of anti-competitive behaviour that went unchallenged by anti-monopoly laws.
There is no reason to believe that monopoly has improved and will lead to greater human flourishing. On the contrary, we live in a time where monopolists “have too much power over what we see, hear, do, and even feel.”
Wu reminds us of the old cliché that those who fail to learn from history are doomed to repeat it. If we are to take the history of monopoly seriously, our goal should be to revive and reform anti-monopoly laws, change the approach to massive mergers, and break up long-standing monopolies.
The Curse of Bigness is a sobering reminder of the influence that monopoly has over humanity. Companies’ bigness manufactures the authority to dodge anti-monopoly laws and manipulate the rules – much like a game of Monopoly. Hasbro developed a set of rules that is destined to make one sole winner with no runners-up. The lack of regulation almost encourages players to game the system for their own benefit. The result? A quick game, that’s a bitter game.
- Wu, T. (2020). London: Atlantic Books. The Curse of Bigness: How Corporate Giants Came to Rule the World