The Antimonopoly Ideal and the Liberal State: The Case of Thurman Arnold

For more than half a century-from the moment large industrial combinations began to emerge in the last decades of the nineteenth century to the late years of the Great Depression -the question of monopoly power was among the central issues of American public life. Then, with striking suddenness, it began to fade from both popular and official discourse until, by the end of World War II, it had largely vanished from political debate. Antitrust laws have remained on the books; at times, they have been vigorously enforced. But the larger popular animus against monopoly that was once so important to American political discourse has stirred no more than passing popular interest for almost fifty years. As Richard Hofstadter wrote in 1964, "Once the United States had an antitrust movement without antitrust prosecutions; in our time there have been antitrust prosecutions without an antitrust movement."1 What makes this change particularly puzzling is that antimonopoly sentiment began its decline just when it seemed ready to prevail: the late 1930s. Franklin D. Roosevelt's reelection victory in 1936 came after a campaign marked by attacks on "economic royalists" and concentrated power. Antimonopoly forces in the New Deal won some of their most important victories during the recession of 1937-1938, when they launched a major public inquiry into monopoly power through the Temporary National Economic Committee and reinvigorated the Antitrust Division of the Justice Department. Yet, in the end, the antimonopoly activities of the late 1930s did not increase popular interest in the issue. Instead, they helped weaken it. For liberals were not only reviving antimonopoly ideas. They were also -without fully realizing it revising them in a way that contributed to their eventual irrelevance. In the wake of the 1937-1938 recession, American liberals moved haltingly but decisively toward a revised notion of political economy. They were beginning to devise a prescription for the state that rested less on reining in corporate power and