Opposition to globalization. Efforts to weaken intellectual property protections. Pushing for municipal broadband. Calls for the National Institutes of Health to develop drugs. What do these positions have in common? They are all examples of the recent turn toward anti-corporate progressivism. This shift is defined by a fierce determination to expand government provision of goods and services; to support small, locally owned firms; and to break up or heavily regulate big corporations.
So-called Big Tech companies face broad scrutiny these days from the media, advocacy groups, lawmakers, and regulators. But for most progressives, this anti-corporatism extends well beyond the tech sector. It has become a general operating principle: the go-to policy formula for righting wrongs. It’s a conviction so firmly held that it is no longer just the means to an end—for many, it’s the end in itself.
This has not always been the case. For more than a century, starting in the 1910s and continuing through to the 1990s, most progressives accepted that large corporations were a permanent and even valuable part of American economic life, to be balanced by other forces, such as unions and regulation.
Yet, over the last two decades, the criteria that progressives have used to evaluate policymakers has shifted dramatically. Rather than assessing policymakers on whether they support policies that generate progressive outcomes—getting broadband to rural areas, fostering drug development, addressing global warming, helping workers get training—many progressives now judge them on whether they advocate for positions that would restrict, restrain, or replace the corporate sector. For example, it’s not enough for the federal government to support broadband deployment to rural areas; the broadband providers must be municipal governments.
Few on the anti-corporate left will acknowledge that anti-corporatism is their true goal, in large part because they realize that few voters support shrinking the corporate sector. Gallup finds that that only 23% of Americans want stronger regulation of big business and a majority have positive views of big business—14 percentage points higher than positive views of the federal government. Three-quarters of Americans do not want the government to break up big tech companies, and more than half of Americans employed in the private sector work for big companies.
Aware of this disconnect, anti-corporate progressives camouflage their endgame by wrapping their proposals in ideas that enjoy near-universal support: lower prices, more privacy, more fairness, more broadband, safer food, a protected climate, cheaper drugs, etc. But the policies they embrace as solutions are first and foremost designed to restrict, restrain, or replace the corporate sector—a silver-bullet solution, they believe, for all of the above, but also an end in itself.
The voters who chafe at anti-corporate sentiment are right. If structural anti-corporate policies are implemented, the result will be lower economic and wage growth, less innovation, reduced U.S. competitiveness, and fewer opportunities for disadvantaged Americans.
On average, large corporations (defined by the Small Business Administration as firms employing 500 or more workers) are significantly more productive than small firms, which translates into lower prices for consumers and higher wages for workers. Indeed, if the United States had the same size distribution of companies as the European Union—which has much tougher antitrust laws—average U.S. household income would be approximately 6.4% lower.
Big companies not only pay their workers more; they also provide more and better benefits, including health care, overtime pay, and retirement benefits. Workers at large companies are less likely to be injured on the job and less likely to be fired or laid off than are workers at small companies. Large companies invest more in training their workers, and they are more likely to employ a unionized workforce than their smaller counterparts. Their workers are also more diverse, with large companies employing a higher share of women, minorities, and veterans than small companies. They invest more in R&D than small firms as a share of revenue and they export more. And contrary to the prevailing narrative that small companies are the source of most new jobs, big companies actually create more net new jobs annually.
If policymakers are to advance effective policies to support competitiveness, economic growth, opportunity, and innovation across a wide array of industries, they need to understand the real nature of the debate. The choice is not between supposedly evil Amazon and smiling small business. The question is which kind of economic system best supports innovation, progress, and American competitiveness. Large corporations—competing with other companies of all sizes and balanced by government regulation and public spending—are clearly a critical component of a healthy ecosystem, and progressives shouldn’t be so quick to dismiss their benefits.