Once in a while capitalism has to be rescued from the depredations of, well, capitalists. Unconstrained, enterprise curdles into monopoly, innovation into rent-seeking. Today’s swashbuckling “disrupters” set up tomorrow’s cosy cartels. Capitalism works when someone enforces competition; and successful capitalists do not much like competition.
Theodore Roosevelt understood this when, as US president, he deployed the Sherman Act against the industrial titans at the turn of the 20th century. Henceforth antitrust, or competition, law has served, sometimes effectively, sometimes less so, to protect the interest of consumers and thereby legitimise the profits of big business. US president Ronald Reagan, scarcely a leftie, presided over the break-up of AT&T.
Technology and globalisation have changed the game. The cross-border activities of the world’s biggest companies make it harder to map a level playing field. Globalisation has multiplied the opportunities for tax avoidance, and tax competition between states has diluted the political will to uphold competition in the marketplace. Timid national politicians are reluctant to take on the global behemoths and their armies of well-heeled lobbyists. Yes, they would like these companies to pay a little more tax, but not so much so that they threaten to take investments and jobs elsewhere. Consumers and less privileged taxpayers are the losers. So is the market economy.