The Abuse of Economic and Financial Power in the New Economy: Historical Patterns in the Creation of Modern Remedies

Since well before the time of Hobbes, it has been accepted that one of the major functions of government is to protect the general society from abuses by predators, whether they be common criminals or the more well dressed users and abusers of monopoly power. The typical response of the predators to the imposition of government controls on their activities is to claim that the government is infringing on their fundamental free enterprise right to prey on their neighbors. With the great changes in the American economy arising in the period from the end of the Civil War to the present, the issue has become more pressing. The increase in the size of industrial, commercial, banking, and utility markets has led to the organization of combinations for the very purpose of extracting monopoly rents from competitors, property owners and consumers. The management of these enterprises justify their behavior on the grounds of natural law, Social Darwinism, laissez faire, and Neoclassical and Chicago School economics.