In the last few years the heavyweights of Keynesian economics have rediscovered monopoly power and its alter ego, competition. Joseph Stiglitz has been talking about monopoly. So too has Paul Krugman. Noting that “we don’t talk much about monopoly power these days,” for instance, Krugman argued in 2012 that the conversation needed to change: growing monopoly power was one of only two possible explanations for the striking ongoing decline in labour’s share of U.S. national income as the share going to corporate profits surged – a form of inequality, notably, overshadowed “for the past generation [as] discussions of inequality have focused overwhelmingly not on capital versus labor but on distributional issues between workers.” And more recently still Robert Reich has added his voice to the growing chorus, submitting that checking growing monopoly power is essential to Saving Capitalism: For the Many, Not the Few.

What, in turn, does political economy have to offer us by way of understanding monopoly and competition and their materiality to capitalist economies? In my new book, The Great Leveler, which addresses this question both theoretically and – through a historical study of the development of the U.K. and U.S. economies from the late-nineteenth century to the present day – empirically, I argue against the two main prevailing political economy “takes” on monopoly. One is provided by the so-called “monopoly capitalism” tradition. Closely associated with the Monthly Review School, this analysis sees Western capitalism as having become more and more monopolistic over time. Capitalism used to be competitive; but by the mid-twentieth century it was no more, and thus the developments discussed by Krugman et al represent a mere continuation of a long-term, linear, seemingly ineluctable trend (e.g. see J. Foster and R. McChesney, The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China). The second tradition is one that, by contrast, largely dismisses monopoly and competition as significant concerns, because monopoly and competition are essentially market-exchange dynamics and what happens in markets is deemed epiphenomenal. The real business of capitalism takes place not in the noisy, surficial sphere of exchange but in Marx’s hidden abode of production (e.g. see B. Fine and A. Murfin, Macroeconomics and Monopoly Capitalism).

The Great Leveler takes a different tack and makes a different case. Going back primarily to what Marx himself had to say about monopoly and competition, it submits that capitalism always, everywhere, requires both and that the relation between them is actually fundamental rather than tangential to overall capitalist political-economic dynamics. Specifically, capitalism, to remain capitalism, requires not only both monopoly and competition but a sustainable balance between them. Monopoly powers are necessary in order to ensure that capitalism is not too competitive, driving down prices and profits; at the same time, competition is required to stave off the tendencies towards stagnation and rent-seeking associated with excessive monopolisation.

Framed by this conceptualisation, the book argues that some of the major historical periods of instability in the U.K. and U.S. economies can be read in significant measure as manifestations of developing imbalance in this all-important dialectical relationship between monopoly and competition. This was true of the 1890s, when competition was in relative excess; in the period immediately following World War Two, when monopoly powers were ascendant; and in the 1970s, when the pendulum had swung back and, once again, competition was the increasingly dominant force. It is true, too, today.

Which begs, of course, a crucial question: If instability in these periods reflected monopoly-competition imbalance, how was such imbalance corrected or at least muted and thus full-blown crisis averted? I argue that the answer is found in large part in the law, and specifically in the application and effect of two sets of laws that are profoundly implicated in the monopoly-competition relation: competition/antitrust law on the one hand and, on the other, intellectual property (IP) law. Forcefully applied, competition law can and does restore competition where it is in relative deficit; IP law, meanwhile, can and does contribute actively to the assembly of monopoly powers in situations where such powers are thin on the ground. Together, such laws – the law – act as a powerful leveler.

So what happened in the relevant historical periods in the United States and the United Kingdom? While there were clearly important differences in historical experience in both political-economic circumstances and legal intervention, The Great Leveler focuses mainly on the commonalities. From the late nineteenth century through to the mid-twentieth century, IP law in both territories was more vigorously applied than competition law – indeed in the U.K. case there was no competition law – and this helped revive monopoly power in relation to competition. For the next three decades, the legal relation was reversed – IP law took a backseat as antitrust enforcement ratcheted up – thus helping to restore competitive conditions in the face of rampant mid-century monopolisation. And from the early 1980s, under the influence in particular of the Chicago School of law and economics, a defanging of competition law was accompanied by the buttressing and heightened application of IP law across the full range of patents, trademark and copyright. Monopoly powers were successfully renewed.

Where, then, do we stand – in the political economies of the United Kingdom and United States – today? The Great Leveler concludes by arguing that the pendulum has swung back once more. Monopoly powers are in relative excess, flushed by three decades of support from beneficial IP laws and unrestrained by largely non-interventionist antitrust authorities.

Plenty of observers, Krugman among them, have recently recognised this surfeit of monopoly and have identified it as problematic – not just for labour, but for capitalism and its stability more broadly. And plenty of commentators, Reich among them, have called accordingly for antitrust to be reinforced and meaningfully reactivated, the orthodoxies of the Chicago School (e.g. that “efficiency” is all and that monopoly can be more efficient than competition) set aside. But this has not happened, and nor has a reining-in of expansive IP laws that demonstrably permit all manner of monopolistic rent-seeking behaviours.

Will the legal scales soon tip again, and come to the rescue of Anglo-American economies currently imbalanced by a paucity of competition? It remains, I argue, an open question. It has happened in the past, specifically in the period after World War Two. But, crucially, the geographies of the economy have changed markedly since then. In those days it made sense to speak, however imperfectly and transiently, of “national economies.” Yet those days are arguably gone, not least where monopoly powers are concerned. The latter don’t tend to crystallise at the national scale any more, except in isolated instances (U.S. cable-based telecommunications, dominated by Comcast, being a great example); they tend to be international, and increasingly so. But competition laws are not. In the absence of a consolidated international antitrust regime, can national laws be mobilised to successfully disempower international, often global corporate accumulations of monopoly power? I may be wrong, but it looks like a tough ask.