Contemporary interest among American progressives in using antitrust law to address wealth inequality lacks a firm intellectual foundation. Indeed, both the original American progressives of a century ago and Thomas Piketty, whose work sparked contemporary interest in inequality, agree that inequality’s source is scarcity, rather than monopoly, and so inequality will persist even in perfectly competitive markets. The only real solution is taxation, not a potentially destructive campaign of breakup. Why, then, is antimonopolism so popular among American progressives today? There are two reasons. The first is American anti-statism, which has closed off tax policy as a viable political solution to inequality, forcing progressive scholars and activists to seek a second- or third-best workaround in antitrust policy. The second is the American press, which is actively promoting antimonopolism as a way of fighting back against Google and Facebook, two companies that have badly outcompeted the press for advertising dollars in recent years.

Progressives who respond to conservative law and economic arguments by rejecting neoclassical economic theory are making a mistake. Neoclassical economics is the only ideology that honors the modern view – associated with the Death of God narrative in Western culture – that there are no longer universal standards of value. To make a case for redistribution of wealth that appeals to the modern view regarding value – a view that progressives themselves hold – progressives must engage with economics. Fortunately, the concept of the gains from trade in neoclassical economics (also known as "surplus" or "economic rent") allows progressives to make a strong case for redistribution of wealth. That is because gains from trade can be redistributed without harming efficiency by varying the prices at which inframarginal units change hands. This insight is called "inframarginalism" to contrast it with the conservative view that the valuations of the marginal buyer and seller pin down price in competitive markets and therefore prevent redistribution of the gains from trade.

It is usually a mistake to suppose that a company is the best judge of how its business works.1 Or that an industry is the best judge of how the industry works. AT&T is a good example. When the Justice Department sat down with management in 1981 to negotiate a breakup of what was then a monopoly provider of telephone service, government lawyers asked which part of the company management wanted to keep after the breakup – the long-distance operations or the regional networks.2 The long-distance operations had long been the company’s most profitable, so management asked for those.3

If a firm is a nexus of contracts, then it is just the sum of its counterparties. It follows that when a firm monopolizes a particular market and exploits its power to impose unfavourable terms on a counterparty, the firm necessarily exploits one counterparty for the benefit of another, because the additional profits the firm generates from the unfavourable terms must be paid out eventually to some other counterparty of the firm. One alternative to attacking monopoly power through breakup of large firms or limits on anticompetitive conduct in the marketplace is therefore to prevent any one counterparty of the firm from so dominating firm governance as to be able to induce the firm to oppress other counterparties for its benefit. Creating a balance of power in firm governance, by giving each class of counterparties (i.e., workers, suppliers, investors, and consumers) an equal say over the choice of board members, would eliminate the internal forces that induce firms to exercise monopoly power. But it would not prevent firms from engaging in productive, pie-expanding, behaviour, because such behaviour tends to expand the business that the firm does with all of its counterparties—or at least enables the firm to use a share of the gains to compensate those counterparties that lose out—and therefore benefits them all.