Elizabeth Warren Recommends Big Tech Break-Up

looking back at trustbusters in the early 1900s

By Jonny Lupsha, Wondrium Staff Writer

In an interview with NPR on Friday, March 15, Massachusetts Senator Elizabeth Warren reiterated her plans to break up big tech companies like Facebook, Amazon, and Google. She expressed concerns over Amazon retaining consumer and seller information for purposes of cornering those markets itself, which she called unfair. She’s in historic company.

In the early 20th century, the seemingly unlimited power of the oil and railroad industries led to the Progressive Era and ushered in business reform and landmark antitrust laws. Presidents Teddy Roosevelt, Howard Taft, and Woodrow Wilson faced a complex problem of balancing public and private interests in order to prevent monopolies from dominating the market. How did antitrust sentiment gain momentum 100 years ago, setting the stage for modern-day “trust busters” like Senators Elizabeth Warren and Bernie Sanders?

Elizabeth Wareen and Traits of the Progressive Movement

As the famous oil tycoon John D. Rockefeller exerted his influence in politics—especially over states in which his company Standard Oil operated—the public took notice. “In November 1902, the reform-oriented McClure’s Magazine ran the first part in a series of exposé articles by the journalist Ida Tarbell on the underhanded and often illegal tactics employed by Rockefeller to build his oil empire,” said Dr. Edward T. O’Donnell, Associate Professor of History at College of the Holy Cross in Worcester, MA. “The History of the Standard Oil Company became a sensation that left the industrial titan battered and bruised at the hands of an indomitable woman reporter.”

This explosive and ground-breaking backlash against big business inspired the period of American history called the Progressive Era. Progressivism sought to balance the freedom to pursue business interests and the inequality those interests tend to produce. “Underlying this definition […] were three important ideas: antimonopolism, a sense of the common good, and increased organization and efficiency,” Dr. O’Donnell said.

Antimonopolism means just what it sounds like: a resistance against monopolies, or large private interests controlling the economy through political influence. Monopolies drive smaller companies out of business. In cases like Rockefeller’s, they do so unethically and sometimes illegally. This concentration of money and power to such a confined number of people conflicts with the second trait of Progressivism—the focus on the common good. Individualism and the common good often clash. For example, a childless person may deem it unfair that a portion of his or her income tax goes to paying for the public school system. The public school system provides free education to children, which is clearly in the interest of the common good, but the childless person has no offspring to send to school; so he or she may feel an infringement of individualism.

The third tenet of Progressivism is the increase of organization and efficiency. The first Progressives often advocated for science and expertise to find new ways to combat social problems on the large scale. “As part of their effort to eradicate poverty, for example, Progressives believed it essential to compile detailed studies of poverty to determine how great the problem was, and what were its causes,” Dr. O’Donnell said.

Theodore Roosevelt, Trustbuster-in-Chief

Sometimes, several companies within one industry brought under control by a single executive board, called a trust, to stifle competition and influence the economy. However, the power they consolidated was often used to create monopolies and skirt legal accountability by bribing or intimidating politicians. President Roosevelt brought an antitrust suit against the Northern Securities Corporation—the J. P. Morgan conglomerate that included much of the railroad industry—and the Supreme Court ruled in 1904 that the trust had to be broken up.

A year later, the meatpacking industry followed. “Just six companies controlled half the national market and earned profits of $700 million a year,” Dr. O’Donnell said. “When the Department of Justice issued sanctions against ‘the big six’ as they were called, they responded by combining into a giant trust called the National Packing Company. But in 1905, the Supreme Court ruled against the trust and ordered it dismantled.”

Several presidential candidates, including Elizabeth Warren, hope to gain the support of the American public by endorsing the traits of early 20th-century Progressives, like pursuing the common good and actively fighting monopolies. President Roosevelt provided historic precedent for enforcing antitrust laws, and a similar scenario may follow in our lifetime.

Dr. Edward T. O'Donnell contributed to this article. Dr. O'Donnell is Associate Professor of History

Dr. Edward T. O’Donnell contributed to this article. Dr. O’Donnell is Associate Professor of History at College of the Holy Cross in Worcester, MA. He earned his Ph.D. in American History from Columbia University. Since 2002, Professor O’Donnell has worked extensively with the federal U.S. Department of Education program, Teaching American History.