The America Scalia Made

Jonathan Taplin
Feb 16, 2016 · 5 min read

In the midst of all the hagiography for Justice Scalia, let me dare to insert a note of realism. Antonin Scalia began his career during the Nixon administration as general counsel of the Office of Telecommunications Policy and then as chairman of the Administrative Conference of the United States, an executive branch agency that advises federal regulators. His whole life was spent defending corporate power, seeking to reduce regulation and defending the funders of the American Enterprise Institute (one of his many appearances, above)and other corporate think tanks. While Scalia was working his way up in the Nixon administration, Nixon’s good friend Lewis Powell (who he would nominate to the Supreme Court), was sounding the alarm that corporate America’s whole way of life was under attack from the left.

American business is “plainly in trouble”; the response to the wide range of critics has been ineffective, and has included appeasement; the time has come — indeed, it is long overdue — for the wisdom, ingenuity and resources of American business to be marshalled against those who would destroy it.

Powell’s solution to this assault was that corporate America needed to marshall its considerable resources to fight back on the campuses, in the media, by financing sympathetic politicians and fighting the left in the courts. By the time Scalia joined the Supreme Court in 1982, Powell’s plan for a full scale pro-business assault force was in place. Dozen’s of Think Tanks like AEI, the Heritage Foundation and the Koch’s Cato Institute were taking in millions of dollars a year in donations and turning out “white papers” for both congress and amicus briefs for the courts.

But it was Scalia who really remade the landscape to the benefit of corporate power. While we may think of Scalia for his socially conservative fulminating in dissent on gay marriage, abortion and affirmative action or for his majority opinion in enshrining the right to carry firearms for almost anyone; none of this was important to the corporations and billionaires who would regularly fly him in their private jets to their conferences to inspire their donors. Most remarkably, Scalia appeared at the Koch Brother’s Annual Retreat in Palm Springs just months before the Citizen’s United Case was decided in favor of the Koch’s and their corporate allies.

Scalia’s leadership in supporting the ability of corporations and billionaires to have unlimited ability to finance politicians was remarkable. After helping decide Citizen’s United, Scalia suggested that unlimited donations should not just be restricted to Political Action Committees (PAC).In oral arguments in McCutcheon vs. FEC, Scalia saw no reason why a billionaire needed a PAC when he could essentially own a political party.

It seems to me fanciful to think that the sense of gratitude that an individual senator or congressman is going to feel because of a substantial contribution to the Republican National Committee or Democratic National Committee is any greater than the sense of gratitude that that senator or congressman will feel to a PAC which is spending enormous amount of money in his district or in his state for his election.The thing is, you can’t give [unlimited contributions] to the Republican Party or the Democratic Party, but you can start your own PAC. I’m not sure that that’s a benefit to our political system.

But I think it is in the area of regulating monopolies that Justice Scalia made his greatest mark. His opinion in a 2004 antitrust case against Verizon stated, “The mere possession of monopoly power, and the concomitant charging of monopoly prices, is not only not unlawful; it is an important element of the free-market system.” So what is the result of Scalia’s view of monopoly. According to a 2015 Wall Street Journal article, it is profound.

A growing number of industries in the U.S. are dominated by a shrinking number of companies. The past year has brought major mergers in many industries, from health insurers and food manufacturers to cable-TV providers. At the same time, many companies are focusing on narrower markets that they can more easily dominate. The result: In nearly a third of industries, most U.S. companies compete in markets that would be considered highly concentrated under current federal antitrust standards, up from about a quarter in 1996, a Wall Street Journal analysis of competition data from the University of Southern California shows.

The technical definition of “highly concentrated” referred to in the Journal article employs an HHI score. “HHI” means the Herfindahl–Hirschman Index, a commonly accepted measure of market concentration. The HHI is calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers. The antitrust agencies generally consider markets in which the HHI is between 1,500 and 2,500 points to be moderately concentrated, and consider markets in which the HHI is in excess of 2,500 points to be highly concentrated. The HHI in the Internet search and search advertising market is 7402. Off the charts. Not since John D. Rockefeller’s Standard Oil Trust, has there been a company as dominant as Google in a market.

I’ve been writing a book for the past few months for Little Brown, based on the Sleeping Through a Revolution piece I published here last year. The book is about how the Internet and antitrust legislation have wounded the arts. So I’ve spent a great deal of time in the past few months reading up on Robert Bork and Antonin Scalia. They were fine with Pay Pal founder Peter Thiel saying to The Wall Street Journal, “ If you want to create and capture lasting value, look to build a monopoly.” This attitude, combined with Justice Department passivity for 30 years and the help of jurists like Scalia, has overthrown the whole notion of what constitutes a monopoly. Jefferson and Madison believed so strongly in the corrupting force of a monopoly that they tried for four months to get the rest of the founders to put a clause on Freedom from Monopoly in the Bill Of Rights. As former Secretary of Labor Robert Reich recently wrote, “Big Tech has been almost immune to serious antitrust scrutiny, even though the largest tech companies have more market power than ever. Maybe that’s because they’ve accumulated so much political power.”

In the coming battle over a new Supreme Court justice, never forget that the election is really an extension of “we are the 99%.” I think both Clinton and Sanders (and sometimes even Trump) get this. Ted Cruz will rail that without another Scalia “We are one justice away from the Supreme Court striking down every restriction on abortion, and mandating unlimited abortion on demand, up until the time of birth.” But this is not what the Koch Brothers, JP Morgan Chase or Google are thinking about. They want to preserve American capitalism just the way it is. And Antonin Scalia was their biggest ally, because he was one of the 9 ultimate arbiters. Now we need a Supreme Court justice for the people, not for the 1%. And it needs to happen soon.

Jonathan Taplin

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Director Emeritus, USC Annenberg Innovation Lab. Author, “Move Fast and Break Things”. Producer, “Mean Streets”, “The Last Waltz”, “Until the End Of the World”