THE CURSE OF BIGNESS

The author argues that when private companies become too large and powerful, the problem is not merely higher prices—it is the concentration of economic and political power, which can undermine competition, workers, innovation and ultimately democratic society.

The central concept and title of the book comes from Supreme Court Justice Louis Brandeis, who spoke of the “curse of bigness.” :

He put it this way in 1911: 'we are in a position, after the experience of the last twenty years, to state two things: In the first place, that a corporation may well be too large to be the most efficient instrument of production and distribution, and, in the second place, whether it has exceeded the point of greatest economic efficiency or not, it may be too large to be tolerated among the people who desire to be free’.

For him, the very purpose of life was the development of character, and the development of self. The ‘ideal' of democracy, he once said, should be 'the development of the individual for his own and the common good’.

A good country and a good economy, therefore, would be one that provided everybody with sufficient liberties and adequate support to live meaningful, fulflling lives. He thought the American founders had understood this, that 'they valued liberty both as an end, and as a means. They believed liberty to be the secret of happiness, and courage to be the secret of liberty. Hence, a worthy nation should protect men and women from any forces, public or private, that might stifle the opportunities for thriving and life.

Brandeis saw an economy dominated by giant corporations as tending to inhumanity. He feared that working in a giant corporation might rob the American people of their character: 'far more serious even than the suppression of competition' was 'the suppression of industrial liberty, and indeed of manhood itself’.

How did Brandeis's principles manifest themselves as economic policy? He took the view that government's highest role lay in the protection of human liberty and the provision of securities consistent with human thriving. That meant a commitment to civil liberties, like rights of free speech and privacy, protected by the courts. But it also meant a commitment to the protection of workers, and an open economy composed of smaller firms - along with measures to break or limit the power of monopolies.

On the positive side, Brandeis was an advocate of measures designed to make life worth living, or that would foster a republic of good character and true citizenry. That meant good public education, steady but not outrageous work hours, pensions for the aged and sufficient time for leisure and study. He wanted child labour to be banned, and the imposition of maximum work hours for others. In short, he wanted the nation to be a place for citizens to thrive, not merely to survive.

Ordoliberalism mentioned in this book is very relevant to The Curse of Bigness because it offers a different way of thinking about the relationship between markets, competition and the state. In simple terms it is about letting the market operate, but make sure the rules prevent anyone from controlling the market.

Understanding the role of the state may help clarify Ordoliberalism. If believers in laissez-faire wanted the state to get out of the way, and if socialists and fascists believed in a state-commanded economy, the Ordoliberals were among the first to call for a "third way. They wanted a state that was strong enough to break private power, but not so strong as to take over society. They wanted the state to guarantee certain economic securities, but to leave the provisioning of most goods to the market process. In their work, the Ordoliberals often compared the ideal state to a good gardener, who, by cutting back on overgrowth, created the conditions for prosperity and human thriving.