“Small, independent, decentralized business of the kind that built up our country, of the kind that made our country great, first, is fast disappearing, and second, is being made dependent upon monster concentration.”[i]
“I think that we are approaching a point where a fundamental decision must be made in regard to this problem of economic concentration. Shall we permit the economy of the country to gravitate into the hands of a few corporations? Or, on the other hand, are we going to preserve small business, local operations, and free enterprise?”[ii]
So said Representative Celler and Senator Kefauver, who sponsored what would become the 1950 Celler-Kefauver Act. Their views were widely shared by members of Congress amid rising national concerns that “…concentration was rapidly driving the small businessman out of the market.”[iii] What followed is almost difficult to believe in today’s America.
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By the 1960s, the Act would play a central role in undoing a merger between two shoe producers. Together they would have had a 5% market share “…that if left unchecked would reduce competition in some cities.”[i] Several years later, the Act would be used to unwind the combination of two grocery chains, resulting in the merged company controlling “…7.5% of the total groceries sold in the Los Angeles market each year.”[ii]
5% of shoe sales in some cities? Blocked. 7.5% of Los Angeles’ grocery? Not allowed.
Our research has chronicled the steady growth in bipartisan support for a more aggressive take on big businesses. The issue is so powerful it created alignment between Senator Elizabeth Warren and President Donald Trump.[iii] We’ll provide some quotes from those better versed in such things in a moment. But first, we think the chart below is a compelling sign of just how far this cycle has gone.
The revenues of the 25 largest companies[1] now represent 40% of total sales in the S&P 500. A level last seen during the Nifty-Fifty era. You’ll not be surprised that big-tech, too-big-to-fail financial services firms, and healthcare feature prominently on this list.
The KCR team read a great deal about the ebb-and-flow of America’s history of anti-trust. We are happy to report that it is complex and beyond our sphere of expertise. What we do know
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