Harper's Magazine

Breaking the Chain

adminn — Sat, 01 Jul 2006 23:26:00 -0400

There is an undeniable beauty to laissez-faire theory, with its promise that by struggling against one another, by grasping and elbowing and shouting and shoving, we create efficiency and satisfaction and progress for all. This concept has shaped, at the most fundamental levels, how we understand and engineer our basic freedoms -- economic, political, and moral. Until recently, however, most politicians and economists accepted that freedom within the marketplace had to be limited, at least to some degree, by rules designed to ensure general economic and social outcomes. From Adam Smith onward, almost all the great preachers of laissez-faire were tempered by a strain of deep realism. Most accepted that a national economy ultimately served a nation that had to survive in an often brutal world. So, too, did most accept that all economies are characterized by struggles for power and precedence among men and institutions run by men; in other words, that all economies are fundamentally political in nature. And so most accepted the need to use the power of the state -- most dramatically in the form of antitrust law -- to prevent any one man or firm from consolidating so much power as to throw off basic balances. The invisible hand of the marketplace, and all that derives from it, had to be protected by the visible hand of government.

It is now twenty-five years since the Reagan Administration eviscerated America's century-long tradition of antitrust enforcement. For a generation, big firms have enjoyed almost complete license to use brute economic force to grow only bigger. And so today we find ourselves in a world dominated by immense global oligopolies that every day further limit the flexibility of our economy and our personal freedom within it. There are still many instances of intense competition -- just ask General Motors. But since the great opening of global markets in the early 1990s, the tendency within most of the systems we rely on for manufactured goods, processed commodities, and basic services has been toward ever more extreme consolidation. Consider raw materials: three firms control almost 75 percent of the global market in iron ore. Consider manufacturing services: Owens Illinois has roiled up roughly half the global capacity to supply glass containers. We see extreme consolidation in heavy equipment; General Electric builds 60 percent of large gas turbines as well as 60 percent of large wind turbines. In processed materials; Corning produces 60 percent of the glass for flat-screen televisions. Even in sneakers; Nike and Adidas split a 60-percent share of the global market. Consolidation reigns in banking, meatpacking, oil refining, and grains. It holds even in eyeglasses, a field in which the Italian firm Luxottica has captured control over five of the six national outlets in the U.S. market.

The stakes could not be higher. In systems where oligopolies rule unchecked by the state, competition itself is transformed from a free-for-all into a kind of private-property right, a license to the powerful to fence off entire marketplaces, there to pit supplier against supplier, community against community, and worker against worker, for their own private gain. When oligopolies rule unchecked by the state, what is perverted is the free market itself, and our freedom as individuals within the economy and ultimately within our political system as well.

Popular notions of oligopoly and monopoly tend to focus on the danger that firms, having gained control over a marketplace, will then be able to dictate an unfairly high price, extracting a sort of tax from society as a whole. But what should concern us today even more is a mirror image of monopoly called "monopsony." Monopsony arises when a firm captures the ability to dictate price to its suppliers, because the suppliers have no real choice other than to deal with that buyer. Not all oligopolists rely on the exercise of monopsony, but a large and growing contingent of today's largest firms are built to do just that. The ultimate danger of monopsony is that it deprives the firms that actually manufacture products from obtaining an adequate return on their investment. In other words, the ultimate danger of monopsony is that, over time, it tends to destroy the machines and skills on which we all rely.

Examples of monopsony can be difficult to pin down, but we are in luck in that today we have one of the best illustrations of monopsony pricing power in economic history: Wal-Mart. There is little need to recount at any length the retailer's power over America's marketplace. For our purposes, a few facts will suffice -- that one in every five retail sales in America is recorded at Wal-Mart's cash registers; that the firm's revenue nearly equals that of the next six retailers combined; that for many goods, Wal-Mart accounts for upward of 30 percent of U.S. sales, and plans to more than double its sales within the next five years.

The effects of monopsony also can be difficult to pin down. But again we have easy illustrations ready to hand, in the surprising recent tribulations of two iconic American firms -- Coca-Cola and Kraft. Coca-Cola is the quintessential seller of a product based on a "secret formula." Recently, though, Wal-Mart decided that it did not approve of the artificial sweetener Coca-Cola planned to use in a new line of diet colas. In a response that would have been unthinkable just a few years ago, Coca-Cola yielded to the will of an outside firm and designed a second product to meet Wal-Mart's decree. Kraft, meanwhile, is a producer that only four years ago was celebrated by Forbes for "leading the charge" in a "brutal industry." Yet since 2004, Kraft has announced plans to shut thirty-nine plants, to let go 13,500 workers, and to eliminate a quarter of its products. Most reports blame soaring prices of energy and raw materials, but in a truly free market Kraft could have pushed at least some of these higher costs on to the consumer. This, however, is no longer possible. Even as costs rise, Wal-Mart and other discounters continue to demand that Kraft lower its prices further. Kraft has found itself with no other choice than to swallow the costs, and hence to tear itself to pieces.

The idea that Wal-Mart's power actually subverts the functioning of the free market will seem shocking to some. After all, the firm rose to dominance in the same way that many thousands of other companies before it did -- through smart innovation, a unique culture, and a focus on serving the customer. Even a decade ago, Americans could fairly conclude that, in most respects, Wal-Mart's rise had been good for the nation. But the issue before us is not how Wal-Mart grew to scale but how Wal-Mart uses its power today and will use it tomorrow. The problem is that Wal-Mart, like other monopsonists, does not participate in the market so much as use its power to micromanage the market, carefully coordinating the actions of thousands of firms from a position above the market.

One of the basic premises of the free-market system is that actors are free to buy from or sell to a variety of other actors. In the case of Wal-Mart, no one can deny that every single firm that supplies the retailer is, technically, free not to do so. But is this true in the real world? After all, once a firm comes to depend on selling through Wal-Mart's system, just how conceivable is the idea of walking away? Producers own and maintain machines, employ skilled workers, lease land and buildings. Even with careful planning, most would find the sudden surrender of 20 percent or more of their revenue to be extremely disruptive, if not suicidal.

Another basic premise of the free-market system is that the price of a commodity or good carries vital information from actor to actor within an economy -- say, that cherries are scarce, or vinyl floor tiles abundant, or the latest iPod includes a new technology. Again, no one can deny that, technically, every firm that supplies Wal-Mart is free to ask whatever price it wants. But again, we must ask whether this holds true in the real world. Every producer knows that Wal-Mart is, as one of its executives told The New York Times, a "no-nonsense negotiator," which means the firm sets take-it-or-leave-it prices, which as we know from the previous paragraph are far harder to leave than to take. Every so often Wal-Mart will accept a higher price, but then the retailer's managers may opt to punish the offending supplier, perhaps by ratcheting up competition with its own in-house brands. Price, within the consumer economy, increasingly carries but one bit of information -- that Wal-Mart is powerful enough to bend everyone else to its will.

Those who would use the word "free" to describe the market over which Wal-Mart presides should first consult with Coca-Cola's product-design department; or with Kraft managers, or Kraft shareholders, or the Kraft employees who lost their jobs. These results were decided not within the scrum of the marketplace but by a single firm. Free-market utopians have long decried government industrial policy because it puts into the hands of bureaucrats and politicians the power to determine which firms "win" and which "lose." Wal-Mart picks winners and losers every day, and the losers have no recourse to any court or any political representative anywhere.

Antimonopoly sentiment in America dates to the nation's founding. We see it in the acceptance by the thirteen newly independent states of English common law, with its rich antimonopoly tradition. We see it in the most vital statement on industry in American history, Alexander Hamilton's Report on Manufactures, itself deeply influenced by Adam Smith's antimonopoly writings in The Wealth of Nations. We see its citizen-centered nature in a 1792 essay by James Madison, in which he condemns monopolies for denying Americans "that free use of their faculties, and free choice of their occupations, which not only constitute their property in the general sense of the word; but are the means of acquiring property strictly so called." We see it dominating many of the great political battles of the nineteenth century, from Andrew Jackson's war on the Second Bank of the United States to William Jennings Bryan's populist campaign of 1896.

It would be wrong, however, to regard America's powerful antitrust law of the twentieth century as especially populist in nature. By the time Congress passed the Sherman Antitrust Act in 1890, the industrial explosion that began during the Civil War had resulted in the rise of hundreds of big firms, which often proved far more efficient than their older, smaller competitors. The phenomenal productivity of these newcomers tempered support for more radical antimonopoly proposals. The result was a sort of compromise, engineered mainly by the progressive wing of the Republican Party. The Sherman Act came to be seen not as a license to destroy all big firms simply because they were big but as a very big stick with which to convince the average firm not to overreach, and on rare occasions to break companies like Standard Oil, which had developed reputations for grossly abusing power. Most big firms were allowed to remain big as long as they avoided outright collusion with competitors, or extreme abuse of their consumers, or overly rapid predation against smaller property holders.

Thus did antitrust power come to serve as a sort of constitutional law within America's political economy. The goal was to enforce a balance of power among economic actors of all sizes, to maintain some degree of liberty at all levels within the economy. In recent years it has become a truism that antitrust law is designed to protect only the consumer. But the fact that Congress intended these laws also to preserve both competition per se and to shelter entire classes of entrepreneurs (among whom is the individual worker) was clear at the beginning and has been made clearer many times since. The text of the Sherman Act itself is famously vague, but the Supreme Court's decision in the 1911 Standard Oil case was based flatly on the assumption that the need to ensure robust competition sometimes outweighs the benefits of near-term efficiency. Standard's roll-up of the oil industry cut the cost of kerosene by nearly 70 percent, and yet the justices shattered the firm into thirty-four pieces. For many legislators, this was not nearly enough. Three years later, Congress greatly strengthened the rules against inter-firm price discrimination, in the Clayton Antitrust Act. Then in 1936, Congress did so again, even more resoundingly, by passing the Robinson-Patman Act. Wright Patman, the Texas Democrat who was the main force behind the bill, made sure everyone understood Congress's intent. "The expressed purpose of the Act is to protect the independent merchant," he wrote on the first page of a book he published to explain the law, "and the manufacturer from whom he buys."

During the twentieth century, antitrust law shaped the American economy more than did any other government power. Over the years, many thousands of antitrust cases were filed, by federal and state governments against particular firms and by one firm against another. Antitrust law determined not merely how big a firm could grow but where it could do business, how it was managed, how it could compete, even what lines of business it could enter. As the industrial scholar Alfred D. Chandler has noted, the vertically integrated firm -- which dominated the American economy for most of the last century -- was to a great degree the product of antitrust enforcement. When Theodore Roosevelt began to limit the ability of large companies to grow horizontally, many responded by buying outside suppliers and integrating their operations into vertical lines of production. Many also set up internal research labs to improve existing products and develop new ones. Antitrust law later played a huge role in launching the information revolution. During the Cold War, the Justice Department routinely used antitrust suits to force high-tech firms to share the technologies they had developed. Targeted firms like IBM, RCA, AT&T, and Xerox spilled many thousands of patents onto the market, where they were available to any American competitor for free.

When Ronald Reagan took power in 1981, one of his first targets was antitrust law. The new administration put forth a variety of arguments -- not least that international competition, especially with Japan, had rendered moot the old fears of monopoly. Yet the driving motive clearly was the philosophical antipathy of the Reaganites to the idea that the American people, acting through their representatives, had any business whatsoever telling business what to do. And the practical effect was to harness the institution of the corporation to that administration's larger project of shifting power and profit from the working, middle, and entrepreneurial classes to the powerful and rich. The radical nature of Reagan's attack on antitrust law is, in retrospect, astounding. Early in the administration, Attorney General William French Smith declared that "bigness is not necessarily badness." Antitrust enforcer William Baxter held that big firms were more efficient than smaller and said he had the "science" to prove it. When the Reagan team published its new Merger Guidelines in 1982, the document formalized two revolutionary changes: it redefined the American marketplace as global in nature, and it severely restricted who could be regarded as a victim of monopoly. From this point on, only one action could be regarded as truly unacceptable -- to gouge the consumer. Any firm that avoided such a clumsy act was, for all intents, free to gouge any other class of citizen, not least through predatory pricing and the blatant exercise of power over suppliers and workers.

If a single business deal illuminates the degree to which Wal-Mart has centralized control over America's consumer economy, it was last year's takeover of Gillette by Procter & Gamble. Gillette would seem one of the last firms likely to find itself unable to protect its pricing power; its 70 percent share of global razor sales gives it some weight at the negotiating table. Yet the Boston-based firm discovered that it could no longer keep its profit margins safely out of the grasp of the Arkansas retailer. And so was conceived the largest in a long list of buyouts due at least in part to Wal-Mart's power, including Newell's takeover of Rubbermaid, Kellogg's purchase of Keebler, and Kraft's buyout of Nabisco. And of course there is the long list of firms that have ended up dead or in Chapter 11 reorganization at least partly because of their dealings with Wal-Mart. Some are small fry, like Vlasic Foods. Others were once powers, like Pillowtex. Some were beloved brands, like Schwinn. Others were family enterprises, like Lovable Garments.

Even with Gillette in hand, Procter & Gamble itself is anything but safe. For decades, P&G was regarded by retailers as the "800-pound gorilla" among suppliers of home products. It was one of two firms that most spurred Sam Walton as he built Wal-Mart -- the competitor to beat was K-Mart; the supplier to tame, P&G. By the time Walton died in the early 1990s, he was able to brag of how he had forced P&G to accept a "win-win partnership" based on the sharing of information. Had he lived a few years longer, though, Walton would have witnessed what amounts to the outright capture of his foe. And for a man who spent much of his life scrounging for deals on lingerie and hawking hula-hoop knockoffs, he would surely have relished how this struggle for the heights of the consumer economy was decided by the power to price toilet paper and detergent. In recent years, Wal-Mart beat P&G into submission by mercilessly pitting its in-house brands against top P&G brands; the retailer, for instance, introduced not one but two detergents to compete with Tide and, in a particularly audacious move, grabbed outright the copyright for the White Cloud line of toilet paper, after P&G unwisely forgot to protect its own brand's name.

With the purchase of Gillette, P&G has achieved a new scope and scale, vaulting past Unilever to become the world's biggest maker of consumer goods. Yet the new balance of power is unlikely to last. Wal-Mart has become so strong, so sure of the invulnerability of its position, that not only does it not fear consolidation among its suppliers; it actually forces many of them to form fully self-conscious, collusive oligopolies with their rivals. Not that these relationships are advertised as such. The key here is the innocuous-sounding term "category management," and it describes a practice that is now common to all large retailers. But it is a practice that grew out of Wal-Mart's original "partnership" with P&G, and it is a practice that has been pushed especially hard by Wal-Mart.

Until recently, every retailer would draw up its own merchandising plan, detailing which brands to promote, how much shelf space to grant each, which products to place at eye level. These days, Wal-Mart and a growing number of other retailers ask a single supplier to serve as its "Category Captain" and to manage the shelving and marketing decisions for an entire family of products, say, dental care. Wal-Mart then requires all other producers of this class of products to cooperate with the new "Captain." One obvious result is that a producer like Colgate-Palmolive will end up working intensely with firms it formerly competed with, such as Crest manufacturer P&G, to find the mix of products that will allow Wal-Mart to earn the most it can from its shelf space. If Wal-Mart discovers that a supplier promotes its own product at the expense of Wal-Mart's revenue, the retailer may name a new captain in its stead. * Not surprisingly, one common result is that many producers simply stop competing head to head. In many instances, a single firm ends up controlling 70 percent or more of U.S. sales in an entire product line, such as canned soups or chips. In exchange, its competitor will expect that firm to yield 70 percent or more of some other product line, say, snacks or spices. Such sharing out of markets by oligopolies is taking place throughout the non-branded economy -- in grains, meats, medical devices, chemicals, electronic components. But nowhere is it more visible than in the aisles of Wal-Mart.

In essence, Wal-Mart has grown so powerful that it can turn even its largest suppliers, and entire oligopolized industries, into extensions of itself. The effects of this practice are most obvious in Wal-Mart's horizontal competition against other retailers. Retail experts sometimes talk of a "waterbed effect," which takes place when a supplier insists on collecting from weaker retailers at least some of the rent a more powerful firm refuses to pay. One recent study of how such power plays out within an entire system shows that a small retailer can expect to pay upward of 10 percent more than a powerful firm for the same basket of items. The effect also explains what takes place economically between communities served by Wal-Mart and those served by less powerful firms -- the more power Wal-Mart accrues, the more it is able to shift costs from, say, suburb to city. And so every day the competitive landscape tilts just that much more in Wal-Mart's favor. And so, every year, the landscape is littered with that many more dead or half-dead retailers -- including such once-big names as Winn Dixie, Albertsons, K-Mart, Toys R Us, and Sears.

This advantage is simply what can be quantified in price. Many of the benefits Wal-Mart extracts from its suppliers lie in a realm far beyond the market economy. If Wal-Mart's aim were simply to dictate the price it will pay for a product, then leave up to its suppliers all decisions as to how to get to that price, it would cause far less economic damage than it does now. But that is not Wal-Mart's way. Instead, the firm is also one of the world's most intrusive, jealous, fastidious micromanagers, and its aim is nothing less than to remake entirely how its suppliers do business, not least so that it can shift many of its own costs of doing business onto them. In addition to dictating what price its suppliers must accept, Wal-Mart also dictates how they package their products, how they ship those products, and how they gather and process information on the movement of those products. Take, for instance, Levi Strauss & Co. Wal-Mart dictates that its suppliers tell it what price they charge Wal-Mart's competitors, that they accept payment entirely on Wal-Mart's terms, and that they share information all the way back to the purchase of raw materials. Take, for instance, Newell Rubbermaid. Wal-Mart controls with whom its suppliers speak, how and where they can sell their goods, and even encourages them to support Wal-Mart in its political fights. Take, for instance, Disney. Wal-Mart all but dictates to suppliers where to manufacture their products, as well as how to design those products and what materials and ingredients to use in those products. Take, for instance, Coca-Cola.

We should be most disturbed by the fact that Wal-Mart has gathered the power to dictate content, even to the most powerful of its suppliers. Because no longer is the retailer's attention focused only on firms that produce T-shirts, electrical cords, and breakfast cereal. Every day Wal-Mart expands its share of the U.S. markets for magazines, recorded music, films on DVD, and books. This means that every day its tastes, interests, and peculiarities weigh that much more on decisions made in Hollywood studios, in Manhattan publishing houses, and in the editorial offices of newspapers and network news shows. Americans who favor abortion have much to worry about these days, between South Dakota's recent ban and the appointment to the Supreme Court of Justice Joseph Alito. But at least these battles are taking place entirely in the public eye, and the decisions are being made by democratically elected representatives. Such was not the case when Wal-Mart recently decided to allow each individual pharmacist in the company to choose whether or not to stock the "morning after" pill. Given the degree to which Wal-Mart has rolled up the pharmaceutical business in many towns and regions across the country, this act amounted, for all intents, to a de facto ban on these pills in many communities. This political decision was made and enforced by a private monopoly.

To appreciate just how blatantly Wal-Mart defies America's antitrust tradition, consider how our grandparents handled the last retailer to gather extreme power: the Great Atlantic & Pacific Tea Company. Better known as the A&P, the grocer at its height operated more than 4,000 supermarkets in nearly forty states and wielded immense influence over the entire food economy. The A&P was famous for its innovations in discount retailing, in distribution, in advertising. And it was infamous for its use of monopsony power, not least its perfection of the art of setting in-house brands against producers who resisted its will. Relative to Wal-Mart today, the A&P a half century ago was a far less awesome force. The firm sold only groceries; it was only double the size of its nearest competitor; and its total workforce was, as a percentage of the U.S. population, only a fifth as large as Wal-Mart's is now. Even so, the A&P was widely and vociferously denounced by local communities, state governments, newspapers, and labor unions as a threat to the American way of life.

Over the years, the federal government repeatedly hauled the A&P into court for abusing its market power. The government first began to scrutinize the firm in 1915, when Cream of Wheat refused to sell to the A&P because of its pricing policy. Then in 1936 came the Robinson-Patman law, which was popularly known as the "Anti-A&P Act." A year later, the Federal Trade Commission filed suit against the A&P, charging that the company had forced a Maryland vegetable packer to grant it a special 4 percent discount. In November 1942, the Antitrust Division filed a Sherman Act case against the retailer, one section of which detailed how the A&P had used "several turns of the screw" to coerce Ralston Purina into granting it a discount three and a half times what the cereal packer offered any other firm. Three years after winning that case, the Justice Department was back in court in September 1949 with another Sherman Act suit, this time asking for the dismemberment of the A&P. Filed at a time when the grocer was already clearly in decline -- not least because of antitrust enforcement -- the 1949 case was dropped five years later. But this was only after the A&P admitted guilt, agreed to dissolve an internal company that traded in agricultural products, and signed an outright prohibition against "dictating systematically" to suppliers. The final antitrust case against the A&P was not resolved until February 1979, a month after a West German grocery mogul bought control over the remnants of the once-huge firm.

Antitrust enforcement against the A&P and other big firms like Sears prevented any twentieth-century American retailer from ever growing nearly as powerful as Wal-Mart is today. But since the Reagan Administration, the only effective constraints on Wal-Mart have been set by investors and revenue flow. Even during the 1990s, when the Clinton Administration targeted a few companies for abusing their pricing power, the Arkansas-based retailer somehow managed to avoid any action. It is unclear whether this was in any way due to the close relationship between the Clinton family and Wal-Mart, on whose board Hillary Clinton served for many years. But even as Staples and McCormick & Co. were sued, a firm with vastly more power over the American economy was left entirely free to extend its domain in whatever direction and to whatever extent it wished. In fact, in one of the highest-profile antitrust cases of the 1990s, an FTC suit against Toys R Us for colluding with toy manufacturers, Wal-Mart emerged as one of the biggest winners.

The Reagan Administration's assault on antitrust enforcement had an even more dramatic effect on manufacturers. Complete license to expand horizontally resulted, in many industries, in the virtual collapse of the vertically integrated firm. Once they consolidated control over their marketplaces, scores of big manufacturers shut down or spun off most or even all of such naturally expensive and risky activities as production and research. These firms opted instead to purchase components and other manufacturing "services" from smaller companies whose main or only path to the final marketplace passed through their offices. This is true of corporations as diverse as Nike, Boeing, 3M, and Merck. Although it has become commonplace to trace the phenomenon of "outsourcing" to the emergence of new technologies and changes in the global "marketplace," it is much more accurate to trace it back to the disappearance of antitrust enforcement. The change in law that gave Wal-Mart license to grow to such a huge size also gave to many manufacturers the license to recast themselves in Wal-Mart's image and become retailers themselves. The result? More and more production systems are run by companies designed not to manufacture but to trade-in components manufactured by other, smaller firms, over which they can exercise at least some degree of monopsony power.

Some of Wal-Mart's more sophisticated boosters will defend the company by defending the exercise of monopsony power itself. Wal-Mart, in their view, should be seen as a firm that aggregates our will and buying power as consumers in much the same way that unions once aggregated the interests of workers. One of the better known versions of the argument was put forth by Jason Furman, a former campaign adviser to Senator John Kerry, who last year published a strong defense of Wal-Mart. The huge retailer, Furman wrote, is "a progressive success story" that has brought "huge benefits" to the "American middle class." Sure, this argument goes, Wal-Mart may employ its power with a certain Stalinist flair; but it does so in our name, and the result is to make the production system on which we all rely more efficient. This efficiency is good for all society, and it is especially good for those poor folks who cling to the lower rungs of the economic ladder.

There are two great flaws in such thinking. The first and most obvious is that it ignores the effects of monopoly on our political system -- the consolidation of vision and voice, the de facto merger of private and public spheres, the gathering of power unchecked and unaccountable. It is to view American society through an entirely materialistic prism, to measure "human progress" only in terms of how many calories or blouses can be stuffed into an individual's shopping cart. It is to view the American citizen not as someone who yearns to decide for himself or herself what to buy and where to work in a free market but to say, instead, "Let them eat Tastykake."

The second flaw is economic, and is of even more immediate concern. Even if the American people did choose to bear the extreme political costs of monopoly, the particular type of power wielded by Wal-Mart and its emulators makes no economic sense in the long run. On the surface, it may seem to matter little who wins the great battles between such goliaths as Wal-Mart and Kraft, or between Wal-Mart and P&G. Yet which firm prevails can have a huge effect on the welfare of our society over time. The difference between a system dominated by firms built to produce and a system dominated by firms built to exercise monopsony power over producers is extreme. The producers that dominated the American economy for most of the twentieth century were geared to build more and to introduce new, to protect their capital investments against overly predatory investors, to raise price faster than cost, to show some degree of loyalty to workers and outside suppliers and communities. Wal-Mart and a growing number of today's dominant firms, by contrast, are programmed to cut cost faster than price, to slow the introduction of new technologies and techniques, to dictate downward the wages and profits of the millions of people and smaller firms who make and grow what they sell, to break down entire lines of production in the name of efficiency. The effects of this change are clear: We see them in the collapsing profit margins of the firms caught in Wal-Mart's system. We see them in the fact that of Wal-Mart's top ten suppliers in 1994, four have sought bankruptcy protection.

In a world of rising tensions within and among nations, of accelerating climate and environmental change, we would be wise to design the production systems on which we rely to be able to evolve as rapidly as the human and natural worlds around us evolve. Instead, we have programmed the dominant institutions within our economy to eliminate all the wonderful chaos of a free-market system. Rather than speed up the random motion and serendipitous collisions that have for so long propelled the American economy, Wal-Mart and other monopsonists are slowly freezing our economy into an ever more rigid crystal that holds each of us ever more tightly in place, and that every day is more liable to collapse from some sudden shock. To defend Wal-Mart for its low prices is to claim that the most perfect form of economic organization more closely resembles the Soviet Union in 1950 than twentieth-century America. It is to celebrate rationalization to the point of complete irrationality.

There are many ways to counterbalance the power of Wal-Mart and the other new goliaths. In the case of Wal-Mart, we could encourage yet more mergers among its suppliers and its competitors. Or we could make it easier for its workers to unionize. Or we could micromanage the firm through our state and municipal governments (e.g., requiring it, as Maryland recently did, to devote 8 percent of its payroll to health insurance). Yet every one of these approaches runs the risk of only further warping our economy and perhaps even reinforcing Wal-Mart's power by creating new allies for it. After all, super-consolidated suppliers already share many of Wal-Mart's political interests; labor unions now committed to Wal-Mart's destruction could overnight become equally as committed to the further extension of Wal-Mart's power; and new bureaucracies will generally tend to sympathize with the firms they regulate. We can also, of course, choose to do nothing, and surrender to the immense retailer all the decisions that in the past were made within the marketplace itself or by democratically elected legislators. In other words, we can cede to Wal-Mart the role it so relentlessly seeks for itself -- to be dictator over the central functions of the U.S. consumer economy.

If, however, we choose the path of the free market, and of individual freedom within the market; if we choose to ensure the health and flexibility of our economy and our industrial systems and our society; if we choose to protect our republican way of government, which depends on the separation of powers within our economy just as in our political system -- then we have only one choice. We must restore antitrust law to its central role in protecting the economic rights, properties, and liberties of the American citizen, and first of all use that power to break Wal-Mart into pieces. We can devise no magic formula or scientific plan for doing so -- all antitrust decisions are inherently subjective in nature. But when we do so, we should be confident that we act squarely in the American tradition, as illuminated by the cases against Standard Oil and the A&P. We should act knowing that the ultimate fault lies not with Wal-Mart but with our last generation of representatives, who have abjectly failed to enforce laws refined over the course of two centuries. We should act knowing that much similar work lies ahead, against many other giant oligopolies, in many other sectors. We should act knowing that to falter is to guarantee political and perhaps economic disaster.

As we make our case, we should be sure to call one expert witness in particular. Last year, Wal-Mart CEO Lee Scott called on the British government to take antitrust action against the U.K. grocery chain Tesco. Whenever a firm nears a 30 percent share of any market, Scott said, "there is a point where government is compelled to intervene." Now, Wal-Mart has never been shy about using antitrust for its own purposes. In addition to the Toys R Us case, the firm was also the instigator of a Sherman Act suit against Visa and MasterCard. And so such a statement, by the CEO of a firm that already controls upward of 30 percent of many markets and has announced plans to more than double its sales, sets a new standard for hubris. It also sets a simple goal for us -- elect representatives who will take Citizen Scott at his word.

*Such blatantly enforced collusion has not gone entirely unnoticed in Washington. Toward the end of its time in office, even the merger-happy Clinton Administration allowed the Federal Trade Commission to launch an investigation of these practices, and an FTC report in early 2001 identified four ways that Category Management may violate even the remarkably loose antitrust guidelines of the last generation. All four of these violations cut right to the core of the free-market system. As the FTC put it, a category captain might "(1) learn confidential information about rivals' plans; (2) hinder the expansion of rivals; (3) promote collusion among retailers; or (4) facilitate collusion among manufacturers." In Wal-Mart's world, all four violations are present to at least some extent.

After The Election

Cecille Isidro — Thu, 28 Apr 2005 00:00:00 -0400

After months of intensifying violence, a looming Sunni boycott, and numerous calls for postponement, Iraq's elections took place as scheduled on January 30 and were immediately hailed as a resounding success. A total of 8.5 million Iraqis, under literal threat of decapitation, cast their ballots at some 5,300 polling centers across the country. Turnout reached 58 percent nationally, surpassing 90 percent in certain Shiite- and Kurd-dominated neighborhoods, and bloodshed was relatively minimal, with forty-four Iraqis killed during the day and 100 wounded. In images flashed around the world, Iraqi people were seen dancing in jubilation and proudly displaying fingers stained with purple ink -- the mark that they had voted. It was a "victory of freedom," as George W. Bush declared, as well as an ostensible victory for the American president, who had begun arguing early in 2004 that timely elections, even if flawed and not entirely representative, were an embodiment of liberty and self-determination. "Across Iraq today," President Bush announced from the White House, "men and women have taken rightful control of their country's destiny, and they have chosen a future of freedom and peace."

But the elections, despite their undeniable success as symbol, may prove more destructive than liberating. I spent a good part of the last several months talking to election experts and government officials about Iraq's experiment with democracy, and in late January I was in the country to witness the elections. The more I learned about Iraq's election process and saw it in practice, the more convinced I became that the country was being led not on a march to freedom but down a path toward future internal strife and possible civil war. Little I observed in Iraq resembled a country experiencing its first free and democratic elections. There were no debates and essentially no ideas or party platforms apart from a repeated mantra that the country needs security, stability, and independence. Candidates, fearful for their lives, remained anonymous or in hiding. And television ads urging citizens to go to the polls -- some of which showed American tanks leaving the country as Iraqi children looked on, and all of which made the vague appeal to "Elect Iraq" -- avoided naming parties, since it was understood that religious and ethnic groups would vote for their own candidates. A Kurd was not going to vote for a Shiite party; a Sunni Arab would not vote for Turkmen candidates. The campaign mostly looked like a contest over who could put up the most posters, each with its own coded symbols: red, yellow, green, and the flag of Kurdistan for the sole Kurdish party, and images of Shiite clerics for the main Shiite slate. This said far less about the emancipatory power of the electoral process than it did about the deep-seated divisions that define the country.

The relative peace that existed in Iraq on January 30, and that ended less than two days later, was achieved only through extraordinarily draconian measures. The entire indigenous and foreign security forces were mobilized around the clock on almost every street corner, prohibiting all civilian automobile traffic. Borders and airports were closed, and curfews were imposed. In a Sunni Arab neighborhood in Kirkuk, where I spent much of election day, there was barely a hint that an election was taking place. When I finally found a school serving as a voting center, masked Iraqi police officers opened fire on my car. After the guards stopped their shooting, they dragged me onto the street and searched my vehicle, quickly finding my passport and press credentials. I pointed angrily to the large sticker that U.S. Army commanders had adhered to the middle of my windshield, the same conspicuous permit authorizing Iraqi police cars to use the streets that day, and the men apologized. I should have also put a flag on my car, the officers told me. They had been awake for five straight days, protecting the school and facing nightly attacks. "The resistance is very strong here," one of the policemen said. Inside the school, the mood among the solitary election workers was funereal. Several of them wore masks, afraid that they might be killed for working on the elections and collaborating with the American occupiers.

Election specialists generally agree that national elections in post-conflict countries should be held as late as possible; instead, local elections should occur first because they restore the conditions necessary for a fair and safe federal vote. In such environments, where mistrust and violence continue to predominate, nationalist parties claiming to speak for a specific ethnic group too frequently make the most immediate sense to voters. But in Iraq, after the insurgency escalated during the fall of 2003, the Americans faced pressure to grant the country "sovereignty" earlier than planned. They devised an obscure caucus plan that few understood and that the country's most influential Shiite cleric, Grand Ayatollah Ali al-Sistani, rejected. Sistani demanded immediate direct elections for a new national government, and a date was set, thereby locking in the Americans on January 30. Sunni leaders called for a six-month delay, emphasizing that their followers could not register or vote without being put in grave danger; other Sunnis dismissed the elections as illegitimate because they were being orchestrated by the U.S.-backed interim government. Iraq's Shiites objected to any changes in the timetable. Sistani ordered his flock to take part in the election, and his representatives warned that those who did not vote would go to hell.

In November and December, more than 100 political entities registered "lists" of candidates to compete for the 275 seats on a transitional national assembly, the body that will write Iraq's new constitution. People voted for these lists rather than for candidates; the number of candidates from a list that will serve on the national assembly depends on what percentage of the vote the list received. It is essentially the Israeli system, although for reasons that should be obvious nobody wanted to call it that. The assembly will elect the president, the prime minister, and several vice presidents. The constitution will then be presented to the Iraqi people in a referendum. There were also elections for eighteen provisional councils and the Kurdistan Regional Government.

Seen from the ground, though, the elections seemed to be not a competition among parties or lists, among people who envisioned themselves as part of a unified Iraq, but rather a competition for power among different ethnic and religious groups, a public display of intense and pervasive ethnic-sectarian identification. In a Turkmen neighborhood in Kirkuk where I traveled in the weeks leading up to the election, every wall was blanketed with posters urging people to vote for the Iraqi Turkmen Front, a radical organization supported by Turkish intelligence. Those traveling to the polls in a Kurdish section of the city waved flags of Kurdistan, wore traditional Kurdish garb, and danced to Kurdish music, their shoulders joined together as they rose and fell in unison. Iraq's Shiite Arabs, the country's long-suffering majority, rejoiced in anticipation of finally taking control of Iraq after so many years of subjugation. The Shiites stand to benefit the most from proportional elections, and to benefit even more from a Sunni turnout that was artificially low due to a boycott and intimidation. When I met in December with Joost Hiltermann, an expert on Iraq working for the International Crisis Group, he explained to me, "Shia discontent characterized Iraq for eighty years. They are parlaying their demographic majority into political dominance. They see it as an entitlement."

The largest list in the elections, the United Iraqi Alliance, known as the "Sistani List" due to the cleric's blessing of it, is dominated by Shiites seeking an Islamic government similar to Iran's and anathema to the secular Kurds and the Sunnis, who do not recognize the spiritual or political authority of the Shiite clerics. The United Iraqi Alliance received nearly 50 percent of the overall vote, and will hold the majority of seats in the assembly. Even in Saddam Hussein's home province, a Sunni stronghold, most of the ballots were cast for the Sistani List. The Kurds of the north, and the main party representing them, the Kurdistan Alliance, which received the second most votes in the election, advocate seceding from Iraq and establishing their own long-dreamed-of nation. Looking at the Arabs to the south of them, and at the chaos gripping Iraq, it is difficult for them to find reasons to stay.

A Shiite and Kurdish government in Iraq without Sunnis, who held most of the positions under Saddam, would mean that instability has been embedded in the new Iraqi political system. There has been talk that those elected to the national assembly will decide to appoint prominent Sunnis to high-level posts in the government, but there is no guarantee that such an offering, even if it were to be made, would help stabilize the country. "With Sunni involvement seemingly coming from the charity of the Shia and the Kurds," says Gareth Stansfield, an Iraq specialist at the Royal Institute of International Affairs in London, "it is all too likely that the forces of the Sunni insurgency will continue to grow, as the disaffected youth, ex-Baathists, ex-military, and Islamists see the new government as a

Risk Management

Cecille Isidro — Wed, 01 Sep 2004 00:00:00 -0400

As medication becomes a way of life for more and more Americans, the U.S. Food and Drug Administration has been remodeled to fit the times. Of the 296 drugs the FDA has approved in the last decade, most have been lifestyle drugs, or copycats of already existing medicines, or both. There have been multiple obesity treatments, allergy medicines, hair-loss cures, impotence pills, and drugs for the newest "disease," irritable bowel syndrome. Despite offering consumers few additional health benefits, these drugs have proven a boon for those the FDA has identified in internal documents, since the late 1990s, as its "customers": the pharmaceutical companies that manufacture and sell the drugs. The pharmaceutical industry has done much to put itself so securely in the government's good graces. Since the Republican takeover of the House of Representatives in 1994, drug companies have spent in excess of $500 million on lobbying and political contributions, and rank among the top fifteen industries in overall giving to members of Congress.

Congress has repaid this largesse by passing several "FDA reform" bills that have made the agency more responsive to the wishes of drug companies. In addition to giving faster and more frequent drug approvals, the FDA has done little to prevent companies from promoting "off-label" uses of drugs approved only for a specific symptom or illness. It also has allowed companies to claim "proprietary trade information" to keep negative studies about their pharmaceuticals secret: the pharmaceutical giant GlaxoSmithKline, for instance, was not required to publish tests that revealed its antidepressant Paxil -- which earned the company $3 billion in revenue in 2002 -- to be little different than a placebo when used by young patients. Even more shocking is the extent to which the FDA has routinely downplayed and suppressed safety concerns expressed by its own experts and drug reviewers. Of the thirteen drugs withdrawn from the market due to health risks since 1997, at least seven are now known to have been approved over the objections of FDA safety reviewers, who either had warned of serious potential dangers or had refused to sign official approval letters. Between just 1996 and 1998, at least twenty-seven drugs were made available to the public over the objections of FDA scientists.

In its mission statement, the FDA has pledged to protect "the public health" and to ensure that the American people "get the accurate, science-based information they need." But as politicians have become beholden to drugmakers' money, the FDA increasingly has promoted sales over science, serving as a de facto subsidiary of the very industry it is supposed to oversee.

This conflict of interest has resulted in a string of cases in which the FDA has knowingly failed to safeguard the public's health. In 1996 the FDA approved the diet drug Redux -- which later had to be withdrawn, along with another weight-loss medication involved in the deadly fen-phen scandal -- after its lead reviewer warned of "severe life-threatening risk." The diet drug Meridia, which was known to raise blood pressure and is now suspected as a factor in forty-nine deaths, was allowed to reach consumers despite the protests of an FDA advisory committee. Another pharmaceutical approved over the concerns of the agency's doctors was Lotronex, a pill for irritable bowel syndrome. Although later withdrawn amid allegations that the drug caused numerous hospitalizations and deaths, Lotronex was returned to the marketplace after a successful patient "advocacy" and "education" campaign, which was funded in part by its manufacturer. In March 2003 the FDA approved Arava, a new drug for arthritis, despite the fact that FDA experts had linked it to liver toxicity. Because new guidelines at the FDA prohibit reviewers from formally stating their opinions on whether drugs should be approved, FDA scientists had to sit in silence at the public meeting at which Arava's safety was debated, even as a consumer advocate attempted to goad the doctors into sharing their judgments.

Earlier this year, when the FDA's longtime specialist in antidepressants and pediatrics, Dr. Andrew Mosholder, concluded that Paxil and most other antidepressants offered children and teens few health benefits and caused potentially dangerous side effects, the FDA attempted to suppress his findings. Weeks before a February public meeting at which Mosholder was to present his report, he was advised by superiors at the FDA to adopt "alternative language" and to issue only "an executive summary. No recommendations." His direct supervisor wrote in a memo, "Would be nice touch to acknowledge the limitations of your analysis." Even as Mosholder was conducting his scientific study, the FDA bowed to pressure from Paxil's maker and approved the drug for a large secondary market, women with premenstrual syndrome.

The FDA also has ignored its safety experts' warnings on over-the-counter medicines. If the FDA had listened to its doctors, the dietary supplement ephedra would have been withdrawn in 1995 -- almost a decade before the 2003 death of a Baltimore Orioles pitcher made the drug's dangers into headline news. In 2000, when FDA epidemiologists issued a formal recommendation to remove the chemical PPA from all over-the-counter cold medicines and diet drugs because it had been linked to strokes, the drugs' manufacturers censured the scientists. Officials at the FDA backed the drug-makers, instructing their doctors to give only the facts about PPA, not their own recommendations.

Indeed, in order to be more industry friendly, the FDA has changed its entire philosophy on how a drug's safety is evaluated. Whereas previously the agency would weigh a drug's potential risks against its proven medical benefits, the FDA now has adopted a more lenient standard of "risk management," which essentially assumes that all drugs are in some measure unsafe and leaves it up to patients and their physicians to monitor a drug's effects with frequent checkups and blood tests -- a near impossibility in this age of managed health care. Meanwhile, the FDA has undermined its Office of Drug Safety (ODS), the division whose scientific research is supposed to guide the approval and labeling of all drugs. According to one FDA employee, the deputy commissioner in the agency's drug-review center, Dr. Steven Galson, announced at a September 2003 closed meeting that ODS had to do more to "add value" to the agency's work. This past March scientists at the FDA were told that the agency's Office of New Drugs (OND), which is ultimately responsible for drug approval, would no longer be requiring their final safety recommendations in writing.

Soon after hearing of this development, Charles Grassley, a Republican senator from Iowa, launched an inquiry into the structural and procedural failings at the FDA. "The Office of Drug Safety may be nothing more than an unwanted stepchild of the Office of New Drugs," Grassley said in a recent interview. In June he appealed to the General Accounting Office to begin a formal review of the FDA's drug-approval process, writing in his request: "It appears that OND influences ODS often and dramatically, [and] that OND is frequently the last word on analyses, reviews and consults done by ODS employees

Welcome To The Machine

Cecille Isidro — Thu, 01 Apr 2004 00:00:00 -0500

That serious problems plague our new, computerized voting machines -- on which 29 percent of U.S. voters are poised to cast their votes in November -- has been apparent ever since $3.9 billion in federal funding for the machines was made available in 2002, in the aftermath of Bush v. Gore. In the years since, report after report has cautioned that the machines lack the security and robustness necessary to withstand the assaults of hackers or unscrupulous technicians. But no one seems likely to stop the rollout of the machines, more than 50,000 of which have been purchased by states. For those who hope to salvage the integrity of this year's election, then, energies must shift from the effort to stop vote-hacking- -- now a doomed task, it would appear -- to an effort, instead, to ensure that access to vote-hacking will be as open and democratic as possible.

In that spirit, Harper's Magazine is pleased to offer the following primer. To be sure, you will not find it a simple task to steal the 2004 election -- not compared with the Gilded Age, when one could cram ballot boxes with fraudulent votes in a ploy that Texans called the "Harrison County Methods." (Decrying such trickery in his memoir, one frustrated Texan politician wrote that "dead Negroes, mules and horses" had cast ballots for his opponent, as had Fido Jenkins, a dog who nevertheless had managed to vote five times.) But when voting-machine vendors dismiss the possibility of their machines being tampered with as "academic," they underestimate the intelligence, skill, and tenacity of the world's hackers -- and even, perhaps, of ordinary readers such as yourself.

Option 1: Take a job at a voting-machine company.

The most destructive means of attack, albeit the most challenging, would be to seed the voting machines with a "Trojan horse," a malicious software program that would lie dormant and undetected until its services were required. Such a program could be triggered by the voting machine's internal clock to awaken only between the hours of 8:00 A.M. and 6:00 P.M. on the first Tuesday in November, at which time it could, for example, begin to subtract or disregard one vote out of every 100 for each candidate with a particular party affiliation. Note that for this option to succeed, you will need to stay in your boss's good graces: Hiding a Trojan horse in the machines will require administrative access to the machines' basic source code, which is ostensibly limited to trusted individuals within the company.

Having risen through the ranks at a voting-machine company, will you still be willing to risk your career for a candidate? Perhaps not. But should your partisanship flag, you can simply fall back on greed. Consider the good fortunes of Ron Harris, a mid-level computer technician for Nevada's Gaming Control Board, who embedded Trojan horses in dozens of video-poker and slot machines in the early to mid-1990s. Harris's program allowed accomplices to trigger maximum jackpots by placing bets in particular sequences. In this fashion he netted nearly $50,000 without arousing the casinos' suspicion. (Be careful not to overstep: when Harris attempted to hack a one-time, $100,000 jackpot in a New Jersey Keno game, his entire scheme was discovered.) Imagine how much a Bush Pioneer or an Emily's Lister might pay to guarantee victory.

Option 2: Take a job as an election worker.

Another kind of attack is possible in the period after the polls have closed, when the storage media that contain the voting records are manually transported to a central office. Some of the machines, such as those manufactured by Ohio-based Diebold Election Systems, store votes on simple PCMCIA cards, a storage device familiar to users of digital cameras. After stealing one of the PCMCIA cards, you can pass it to a confederate who will decode and reencode it off-site.

Will it be possible to crack the code quickly enough? Probably so. Experts have long known DES, the encryption algorithm used to protect Diebold's cards, to be second-rate. More than five years ago, the Electronic Frontier Foundation decoded a DES-protected message in twenty-two hours, and today's computers no doubt can accomplish the task much more rapidly. An added boon: all Diebold cards are encrypted using the same, hard-coded key -- a design mistake inveighed against in even the most rudimentary cryptography class. If you can determine the DES key of a single machine prior to an election (an easy task, if a unit could be "kidnapped" for a day or two), you will have access to every machine manufactured by Diebold.

Option 3: Make your own "smart card."

Not all of the options will require a change of career. Many of the voting machines -- for example, Diebold's which are being used in more than 6,000 precincts nationwide -- are operated by "smart cards" that are handed out to voters as they check in at their polling places. These smart cards perform no cryptographic function; that is, they do not try very hard to verify that the terminal they are communicating with is legitimate, and vice versa. If you can figure out the protocol that the card and the machine use to communicate with each other, then you can create a homemade smart card that allows for unlimited voting. (Programmable smart cards sell at computer shops for as little as $3.50 each.)

To figure out the protocol, you could fashion a sort of wiretap device to insert into the smart-card slot, allowing you to eavesdrop on the machine-to-card dialogue. Of course, far easier would be to consult the source codes of the various machines. Although these source codes are proprietary, in at least one case they have found their way into public circulation. Avi Rubin, the Johns Hopkins University computer scientist who was the first to warn of the possibility of smart-card attacks, was able to conduct his research because large portions of Diebold's source code had been discovered on one of the company's publicly accessible websites. (The code was stumbled upon during a routine Google search.) And in December the network of Vote-Here, a voting-machine company based in Bellevue, Washington, was breached by a hacker; VoteHere officials have refused to reveal what information, if any, was stolen.

Option 4: Think demographically.

Perhaps the easiest way to use voting machines to tip an election will simply be to crash the machines of the most partisan districts. The smart-card-based machines are shut down using "ender cards," which poll workers insert at the end of the election day. If you make a smart card that mimics an ender card, you could shut down or slow voting for hours in, say, Orange County, or in a heavily African-American district. (One brand of voting machine, Sequoia's AVC Edge, does not even require an ender card to shut down; the machine can be flipped into "supervisor mode" simply by pressing a button on the back. If poll workers neglect to lock the wire seal that protects the button, interfering with the election will be as easy as flicking a light switch.)

In their brutal simplicity, these final, most accessible options recall some of the most effective vote-hacking schemes from elections gone by: suppressing the African-American vote, whether through confusion or outright intimidation; delivering voting booths late, or not at all, to precincts that vote in an objectionable manner. If there is anything to be learned from the history of election stealing -- or for that matter, of computer hacking -- it is that any possible tricks will be tried sooner or later. And, given the porousness of voting-machine security, some of these tricks will doubtless succeed. Having been presented an opportunity to make vote-hacking nearly impossible, our government seems merely to have handled the ability to do so from one class of criminal to another.

Urban Philosopher: a Walking Tour of Lewis Mumford

Cecille Isidro — Thu, 30 Dec 1999 04:00:00 -0500

In 1996, Robert Wojtowicz, the literary executor of Lewis Mumford (1895-1990) and a professor of art history at Old Dominion University in Norfolk, Virginia, published a useful overview of Mumford's life and work, Lewis Mumford and American Modernism: Eutopian Themes for Architecture and Urban Planning. Now Wojtowicz has collected a number of the "Sky Line" columns that Mumford wrote for Harold Ross's New Yorker between 1931 and 1940. The subjects range from "Mr. Rockefeller's Center" (the title of a 1933 essay) to the Cloisters ("Pax in Urbe," 1938) to the inappropriate use of historic styles for bank buildings: "Has it ever occurred to any architect that the best protection for money not in the vaults would be a complete glass front, which would make it impossible for anyone to stage a holdup without the Whole world knowing about it?"

Although Mumford's reprinted "Sky Line" columns are remarkably readable despite the passage of time, the best essays in Sidewalk Critic are two brief memoirs that Mumford published in The New Yorker: "A New York Childhood: Ta-Ra-Ra-Boom-De-Ay" (1934) and "A New York Adolescence: Tennis, Quadratic Equations, and Love" (1937). The first begins: "Karl Marx characterized the class into which I was born as the petty bourgeoisie. He didn't think much of it as a class, and neither do I; but that was the angle from which I saw New York." Mumford recalled:

The gay, wicked world of fashion and sport hung with a sort of stale aura over my childhood; I boasted an aunt who crossed her legs, gingerly smoked Russian cigarettes, and occasionally was abandoned enough, after a cocktail or two, to expose her stockings fully three inches above the ankle. This world was, for me, secretly dominated by the masks and false faces that my grandfather, the headwaiter, would bring home after a celebration at Delmonico's, along with pate de foie gras, boned turkey, and truffles; these masks were somehow of a piece with the writhing naked ladies and gentlemen that I beheld, at the timely age of four, on the walls of the saloon owned by John L. Sullivan's brother.

Mumford gave up on attempts to become a playwright, screenwriter, or novelist after an autobiographical novella published in 1928, but he shows the skill of a born writer in his 1937 memoir:

The other part of my adolescence, particularly in the earlier years, centered chiefly around the old tennis courts in Central Park on the south side of the transverse at Ninety-sixth Street. The courts were then covered with grass, and the most popular court, half-denuded by constant playing, was called the dirt court. An aged keeper, with a gray beard spattered with tobacco juice, had charge of the marking of the courts and the stowing away of the nets. He was probably one of those Civil War pensioners who were still favored on the public payrolls, and we called him "Captain," but he had a vile temper and carried on an uncivil war of his own with most of the people who played there. He was often drunk, and the white lines he marked with his sprinkler showed no disposition to follow the straight and narrow path, but this crusty character gave the place a certain flavor which contrasts with the colorless, antiseptic courtesy of today. We couldn't start playing till the Captain raised the flag on the flagpole.

As this excerpt suggests, describing Lewis Mumford as merely an architecture critic is rather like identifying Mark Twain as a humorist or Goethe as the prime minister of a small German duchy. Recommending an artist to the director of the Metropolitan Museum of Art in 1975, Mumford wrote, "While Le Witt paints in the language of abstraction, he is close to Blake and Ryder in spirit, as he is likewise to Emerson, Thoreau, and--if I may dare to add!--myself." That Mumford put himself on the level of Emerson and Thoreau might seem to have been presumption. But on this subject, as on many others, Mumford was right. He was--to use the words in their original meanings--a philosopher and a humanist.

Mumford took as his subject all of human life and society--from the ancient world to the present, from architecture and art to politics and social life. In so doing, he was inspired by Romantics like John Ruskin and William Morris, and by his mentor, the Scots philosopher Sir Patrick Geddes. From Geddes, Mumford derived, along with unsuccessful coinages like "technics" and "eutopian," and a tendency to use the term "organic" as a commendatory adjective, a focus on the history and sociology of cities and regions as the basis of an interdisciplinary approach to knowledge and history. He devoted much of his life to a four-volume history of Western civilization, The Renewal of Life, which, like its coda, The City in History (winner of the National Book Award in 1962), focused on the evolution of the city from ancient times to the present.

Metahistory like that of Mumford, Toynbee, and Spengler is frowned upon today, though metahistories continue to be written by William H. McNeill, Samuel P. Huntington, Francis Fukuyama, and Jared Diamond, among others. The metahistorian whom Mumford most resembles, perhaps, is H. G. Wells, another child of the working class with a satirist's eye and a reformer's enthusiasm, who tried to explain humanity to itself in his Outline of History. But Mumford, whose first book, The Story of Utopias (1922), was a survey of the genre, came to associate utopias like Wells's Fabian vision of a world government run by enlightened technocrats with tyranny. In The Pentagon of Power (1970), Mumford warned, "The pervasive character of all utopias is their totalitarian absolutism, the reduction of variety and choice, and the effort to escape from such natural conditions or historical traditions as would support variety and make choice possible."

A genuine polymath, Mumford would have been at home among Renaissance men or Enlightenment philosophes. Unfortunately for his posthumous reputation, his career coincided with the grafting onto English-language higher education of the horrible Teutonic university system, in which scholars are encouraged to increase their academic market value by specializing to the point of absurdity. What Gore Vidal refers to as the "scholar-squirrel" is trained to react with horror and hostility to synoptic thinkers like Mumford, who in a 1933 letter to Van Wyck Brooks explained his program for The Renewal of Life in terms that would make a modern professor faint. "By now," he wrote, "my book has expanded into three books: one on machines, which covers incidentally the major problems of economics, and of politics and morals as related to that; the second on cities, which will cover politics, and to no small degree include also culture and art; and the third on the Personality, which will bring everything together, but which will mainly be concerned with philosophy and education and marriage and what not." If Mumford had not dropped out of City College without obtaining his B.A., his intellectual ambition might have got him expelled.

Compounding his offense against scholarship, Mumford wrote in a lucid, witty, conversational style at a time when academics were trained to adopt a scholastic prose in which, not coincidentally, solecisms and banalities are easily hidden. Petrarch and the original Italian humanists, it should be recalled, rejected the formal modes of. argumentation favored by the scholastics of the Sorbonne and Oxford in favor of the familiar letter and its offspring the familiar essay, as well as the symposium, the conversational treatise, the satire, the fable, the epic and didactic poem, the polemical pamphlet. Like the Renaissance humanists he resembled, Mumford enlisted literary art in the service of philosophy.

In light of his sins against pedantry and obscurity, it comes as no surprise that Mumford's name is almost never heard on American university campuses, except, perhaps, in the architecture and urban studies departments. The fact remains that Mumford was a greater sociologist than most of his contemporaries; who now reads Pitirim Sorokin or Talcott Parsons? And a page of history from Mumford is worth any number of tomes by today's Marxist, structuralist, post-structuralist, or race-and-gender theorists.

A prophet is not without honor, save in his own country and his own house. The Italian scholar Luciano Pellicani, in The Genesis of Capitalism and the Origins of Modernity (English translation, 1994), finds Mumford a better guide to the history of capitalism and constitutional government than either Marx or Weber. Unlike Weber, Mumford understood that Western capitalism was invented in the laboratory of the late-medieval city, centuries before the Protestant Reformation to which Weber attributed so much importance. Mumford's argument that twentieth century fascist and communist totalitarianism were high-tech versions of the military-bureaucratic despotism of the ancient empires--the "Megamachine"--seems much more plausible, in light of what we now know about Hitler, Stalin, and Mao, than dated attempts such as Hannah Arendt's to explain totalitarianism in terms of the "mass man" or the Frankfurt School's theory of the "authoritarian personality." Nevertheless, American professors probably will not take this great American thinker seriously until they are instructed to do so by some minor Oxbridge don in The New York Review of Books.

Mumford's claim to eminence as an American writer does not rest on The Renewal of Life and The Culture of Cities alone. If he had died at the age of thirty-seven, in 1932, his place in the American pantheon would be secure. Mumford began his writing career in one of the few Golden Ages of higher journalism in the United States. He wrote for Thomas Bucklin Wells's Harper's and Herbert Croly's New Republic. He worked for Albert J. Nock at The Freeman and was a colleague of Van Wyck Brooks at The Dial. He took a class from Thorstein Veblen at the New School for Social Research and helped Alfred H. Barr Jr., Henry Russell Hitchcock Jr., and Philip Johnson introduce the American public to European modernism. Inspired by his friend Brooks's call for a "usable past," Mumford quickly wrote four books on the history of American culture: Sticks and Stones: A Study of American Architecture and Civilization (1924), The Golden Day: A Study in American Experience and Culture (1926), Herman Melville (1929), and The Brown Decades: A Study of the Arts in America, 1865-1895 (1931).

Mumford had come of age in one of those periods in U.S. history in which native traditions are devalued and everything British or European is considered superior (our own time is another). In his tetralogy, Mumford made the case that the leading American writers, artists, and architects of the mid-nineteenth century, far from being provincial eccentrics, were native masters who flourished in an era of American innovation between the derivative colonial era and the equally derivative age of Beaux-Arts classicism in art and architecture, and genteel realism in fiction. With a genius equal to Ruskin's in The Stones of Venice, Mumford, in The Brown Decades, uses the metaphor of earth tones in analyzing the qualities he sees in Walt Whitman's poetry and Henry Hobson Richardson's architecture: "Through all the dun colours of that period the work of its creative minds gleams--vivid, complex, harmonious, contradicting or enriching the sober prevalent browns." In The Brown Decades, art criticism rises to the level of art. It is a testimony to Mumford's taste and persuasiveness that the American pantheon he was among the first to define--Whitman and Dickinson, Eakins and Ryder, Richardson and Sullivan and Frank Lloyd Wright, whom he once described as "the world's greatest living architect"--is still our own.

Recognizing Mumford's achievements in fields other than architectural criticism need not divert attention from the accomplishments for which he is chiefly remembered. Indeed, Mumford the architecture critic draws insight and power from Mumford the humanist and philosopher, and the essays on architecture and urban design in Sidewalk Critic illustrate the range of his interests and the depths of his knowledge in his chosen specialty.

Although he was reared in Manhattan, Mumford was anything but a parochial New Yorker. In 1938 he wrote, "It should be a great blow to a New Yorker's pride to realize that none of the important things that have happened in modern architecture have taken place here.... All the decisive improvements in the design of skyscrapers were made in Chicago before 1900." After World War II, when various New York schools of architecture, painting, and poetry enjoyed an ephemeral prominence, Mumford proved his independence from fashion by boosting the "Bay Region Style" of California architecture.

When Mumford wrote his "Sky Line" columns, the future of New York City and urban America was still undecided. Mumford feared the worst, writing in 1939, "For what the Futurama really demonstrates is that by 1960 all jaunts of more than fifty miles will be as deadly as they now are in parts of New Jersey and in the Farther West." We know that it all ended badly, in glass boxes and Piranesian overpasses and desolate strips, so there is a certain poignancy in wondering what might have been if Mumford's enthusiasm for decentralized pedestrian cities and a modernism more eclectic and diverse than the orthodox International Style had been shared by postwar architects, realtors, and urban planners.

Mumford watched in horror as the livable New York City of his childhood mutated first into "Metropolis" and then toward "Necropolis." (What term could be more appropriate for today's mausoleal Manhattan, a cross between Singapore and Epcot Center?) Speaking out in favor of historic preservation before it became fashionable, Mumford opposed urban planners who demolished human-scale neighborhoods to create monstrous highways and housing projects; he clashed repeatedly in print with Robert Moses (who, believe it or not, wanted to extend Fifth Avenue through the middle of Washington Square). But Mumford disagreed with Jane Jacobs and others who preferred high-density areas to well-designed suburbs.' Long before the suburbanization of America had become a commonplace topic, Mumford was describing the "fourth migration" to suburbs and "regional cities." Sidewalk Critic contains a favorable review of Wright's Broadacre City exhibit at Rockefeller Center in 1935; Mumford praised it as "the new type of decongested city that the motorcar and the autogiro have made technically possible."

De gustibus non est disputandum. Still, it is worth noting that the American people have voted with their feet against Jacobs and others nostalgic for brownstone apartment blocks and in favor of Mumford and Wright. Only the constant influx of impoverished immigrants and a transient population of affluent single professionals has prevented Manhattan's population from declining in absolute numbers, as the middle and working classes, as well as affluent families with children, flee in search of space, safety, and a lower cost of living. But immigrant proles who themselves escape to the suburbs as soon as their earnings permit cannot replace the resident audience of working- and middle-class Americans who once patronized New York theater and bookstores. Nor can fashion-minded yuppies in the publishing and media industries or European and Latin American trust-fund babies in Soho perform the roles that once belonged to bohemian intellectuals in Greenwich Village, whose successors were long ago driven by high rents out of New York City to college campuses, think tanks, and rural retreats across the country.

Although Mumford favored decentralization, he was no fan of suburban sprawl: "The planners of the New Towns seem to me to have over-reacted against nineteenth-century congestion and to have produced a sprawl that is not only wasteful but--what is more important--obstructive to social life." Mumford's vague ideal of the "regional city" with "organic" or contextually appropriate architecture was similar to that of the architects Andres Duany and Elizabeth Plater-Zyberk, the writer James Howard Kunstler, and other proponents of the New Urbanism--a suburb more like a small town than like a large parking lot. But Mumford, who like many early-twentieth-century architecture critics was concerned with housing for low-income workers, would have warned that the New Urbanism will be a failure if its only lasting products are ghettoes for the affluent like Seaside, Florida, and Disney's Celebration. A lifelong liberal, Mumford testified before the U.S. Senate in 1967 against trying to revitalize inner cities by subsidizing public housing and slum clearance. Instead, he argued for his old panacea, the regional city. Today, an increasing number of progressives have arrived at a belated understanding that programs to disperse the urban poor among middle-income suburbs make more sense than expensive efforts to turn inner cities into more comfortable prisons.

"Some day," Mumford wrote his daughter in 1954, "some sedulous Ph.D. will go through my literary remains and compose a really brilliant dinner out of what was left in the garbage pail: thus raising the embarrassing question of what I thought I was doing when I cooked the original dinner itself." Robert Wojtowicz has done a public service in republishing these essays and columns. It is now time for the Library of America to devote a volume or two to one of America's greatest and least appreciated twentieth-century thinkers.