Unbalanced
Claire Godfrey, Executive Director of the Balanced Economy Project, talks to Jack Jeffrey about how concentrated corporate power threatens democracy, innovation, and fairness
From now on we’ll be running interviews once a month or so in Fair Comment. In this first interview, our Senior Researcher Jack Jeffrey talks to Claire Godfrey, Executive Director of the Balanced Economy Project, about how concentrated corporate power threatens democracy, innovation, and fairness.
Jack Jeffrey (JJ): As Tim Wu puts it in his excellent book The Curse of Bigness, two major trends define today’s advanced economies: rising wealth and income inequality, and increasingly concentrated markets. We see fewer and fewer firms dominating sectors, most visibly big tech but also many other industries, to such an extent that a recent UK government report even warned of a tendency toward ‘oligopolistic structures’. What, in your view, is wrong with this? And by way of answering, could you explain what the Balanced Economy Project is and what it is trying to do?
Claire Godfrey (CG): The Balanced Economy Project was founded in 2021, inspired in part by the long-standing anti-monopoly movement in the United States. Of course, concentrated corporate power is not just an American problem. The UK has its own monopolies, but the US has also exported its monopolistic firms and practices globally. Our purpose is to revitalise competition enforcement, which is a hidden but powerful policy tool that has become severely underused.
The basic problem with concentrated markets is simple: too much power in too few hands is bad for society generally, but it is especially bad for the economy. A functioning democracy depends on ensuring that private actors do not become more powerful than the state and the people. Governments grant firms the right to operate; that right is not unconditional. Historically, states have intervened when concentration threatened broader social interests. Roosevelt’s break-up of Standard Oil is an obvious example, as is the Allied break-up of IG Farben after the Second World War.
Without active enforcement, dominant firms can set prices as high as they choose, since consumers become dependent on them. There is no competitive pressure to innovate, so society loses out on technological advancement and innovation. Workers, meanwhile, have fewer employment options and must accept the terms dictated by dominant employers.
Concentrated firms also gain outsized influence over public policy. When they become ‘too big to fail’, governments are forced to accommodate them. These companies acquire structural and strategic dominance - the capacity to shape markets and, in some cases, entire economic sectors. Their lobbying power allows them to shape legislation and policymaking in ways that entrench their position.
JJ: To what extent do you think the anti-monopoly perspective helps to explain the economic grievances and disaffection we see today? How is concentrated corporate power interacting with rising inequality and stagnating living standards? Can monopoly dynamics help explain why politics feels so volatile?
CG: I think people intuitively know when they’re being cheated. Many feel they are being denied a fair shot at a good life. If people believed they were operating within a fair system, that would be one thing, but the prevailing system actively dissuades entrepreneurship and undermines opportunity. The anti-monopoly movement is fundamentally pro-opportunity. But small businesses are being squeezed out – around 300,000 small firms have disappeared since the pandemic.
It’s in this way that concentrated corporate power fuels inequality. Economic power begets wealth, which begets more political power, which in turn reinforces wealth concentration. What we are trying to show is that policymakers actually do have tools that directly target this and stop power and wealth concentrating. We have laws that allow governments to block mergers or break up companies. We simply no longer use those laws in the way they were intended.
JJ: In the United States, the anti-monopoly movement has drawn support from an unusual coalition. Both the progressive left and parts of the populist right are critical of big business, to the point where figures like Bernie Sanders and Steve Bannon have said strikingly similar things, for instance praising Lina Khan. What is it about this agenda that transcends traditional political cleavages? And why hasn’t anything similar taken root in the UK?
CG: The UK has an unusually monocultural economic ideology. All political parties, including significant parts of the progressive left, have absorbed a neoliberal worldview. Our political thinking is unusually constrained; “there is no alternative” still shapes the intellectual environment.
We also lack a strong tradition of civil society contestation. In the UK, advocacy groups have tended to adopt a “constructive engagement” approach, working within the mainstream structure, seeking incremental gains. But if you challenge the structural integrity of the system, you are treated as illegitimate or ‘anti-capitalist.’ That dynamic generates a chilling effect. Even peers and allies often self-censor, which suppresses deeper structural debates. In the US, by contrast, there has been more willingness to challenge concentrated economic power directly, and more political imagination around alternatives.
JJ: This surprises me, because the UK has a long tradition of supporting competitive markets. Parts of neoliberal thought are, in theory, strongly pro-competition. I think it depends on what you think the purpose of a market economy is. There’s a line in Charles Moore’s biography of Thatcher where he says that Thatcher set out to make a country in the image of her father – a small business owner – and ended up making a country in the image of her son – a profligate stock trader.
CG: Yes, but the UK has never truly experienced ‘free competition’. Our markets have always been distorted. Rentierism and extraction have been baked into the structure of the economy forever. That makes it difficult for free-market advocates to make a coherent case for competition, because the reality of the market bears no resemblance to their theoretical model. I do believe competition is healthy. A vibrant economy built on small businesses, entrepreneurship, and dynamism is good for innovation and good for society. But that is impossible without a level playing field.
JJ: Agreed. Competition policy has traditionally focused on consumer prices and choice. But monopolies clearly have broader, more pervasive effects. How do monopolies affect workers, communities, and the wider economy?
CG: Regulators have become narrowly focused on prices and market openness. Even on those metrics, they have not been particularly successful – prices have risen, and markets have become more concentrated. But the impacts go far wider. As I mentioned earlier, dominant firms exert structural and strategic power over government decisions. They shape the economy in ways that reflect their interests, not public priorities. That is a democratic problem.
When there are only a few major employers, workers face fewer choices and weaker bargaining power. Terms and conditions worsen and mobility declines, making it much more difficult for workers to get ahead.
Another important issue is supply chains. Agriculture is a clear example. Large agribusiness monopolies tightly control supply chains and extract value at every stage. Farmers face razor-thin margins because the surplus is captured further up the chain. Another example is healthcare. We recently wrote to the Competition and Markets Authority (CMA), alongside Just Treatment and Global Justice Now, urging an investigation into cartel-like behaviour by US pharmaceutical companies. Several large US firms signalled – within days of each other – that they would withdraw investment from the UK unless the NHS agreed to pay higher prices for their products. This happened during UK-US trade negotiations and appears to be an attempt to exploit geopolitical leverage. The NHS has now agreed to pay more, so that money must be taken from elsewhere within the health budget. That affects patients, services, and outcomes.
Another area is the dominance of big finance – BlackRock, Blackstone, Vanguard, and others (our new report, Too Big to Cool the Planet, goes into detail on this). Their power isn’t often framed as a monopoly issue, but it has profound consequences. These firms shape markets, decide which sectors receive investment and steer capital away from the real economy. The financial system is no longer structured to support productive activity; instead, it funnels capital into speculative activity and wealth extraction. That harms small businesses and reduces economic dynamism.
And then there’s big tech, which creates behavioural and economic dependencies. People rely on specific platforms and ecosystems, which are designed to maximise lock-in. Algorithmic control influences narratives, behaviour, and even cognition. There are also serious mental health implications, particularly for young people, associated with the ways digital platforms are designed.
JJ: This seems like a good point to turn to the Labour Party and its current agenda. Labour has made ‘growth’ its central priority. That appears to be translating into a more relaxed attitude toward the UK’s competition regime. There seems to be an assumption that strong competition policy might conflict with a pro-growth, pro-investment strategy. What do you make of that?
CG: I find the government’s theory of change on growth hard to understand. They seem to believe that deregulation and ‘competitiveness’ (which is very different from competition) will attract investment. But competitiveness typically means offering increasingly favourable terms to capital – a race to the bottom. The concept of competitiveness is a floating signifier in the sense that it lacks a fixed meaning, allowing it to confuse competition between private actors in markets with competition between states or regions - a very different set of processes. Ideologues and vested interests exploit this vacuum to argue that states should transfer resources to them to help them compete globally - for example via subsidies, preferential tax regimes, permissive merger control and competition policy, or weak regulatory, environmental or social protections.
Some US investors are interested in the UK: data centres, infrastructure, and so on. But the real question is the quality of that investment. Investment only matters if it benefits the wider population. Much of this appears rooted in a discredited trickle-down theory. Wealth does not reliably trickle down. In fact, substantial portions of private investment flow back out of the country, or upward into shareholder returns and tax haven structures. This is wealth extraction, not wealth creation. Even if GDP rises marginally, GDP is not a measure of social wellbeing. As Donald Kaberuka once put it: “You can’t eat GDP.”
This is not a Keynesian model of growth that produces multiplier effects across communities. It is not inclusive. It does not promote broad-based prosperity.
By chilling the competition authority, i.e the CMA, Labour appears to be signalling that regulatory assertiveness is unwelcome. That is part of the ‘competitiveness’ agenda: telling large firms that mergers will not face scrutiny, that enforcement will be relaxed, and that the UK intends to make life as easy as possible for big business. Yet in reality, innovation and sustainable growth depend on competitive markets, entrepreneurialism, and a level playing field. Weak competition policy undermines these conditions.
JJ: Let’s turn to the CMA. Under past Conservative governments, the CMA built a reputation as a relatively assertive regulator. It wasn’t afraid to intervene in big mergers, the Microsoft-Activision case being the obvious example (even though that eventually went through). But the Labour government is taking a different tack. After a public falling out with the previous chief executive of the CMA, Rachel Reeves appointed a former Amazon executive to the role. That tells you all you need to know.
From a UK strategic perspective, how far can a mid-sized country go in challenging multinational giants? Where is the line between necessary regulatory assertiveness and counterproductive isolation? And given how embedded these platforms have become, is meaningful intervention even possible?
CG: The CMA seems to have retreated on competition enforcement, shifting its focus more toward consumer protection. My guess is that they feel safer operating in that space, where they are less likely to attract criticism from either the Trump administration or the UK government. But this is shortsighted. There are 27 competition authorities across Europe, plus the European Commission, plus the UK. It is extraordinary that there is not more coordination among them. If agencies acted collectively, they could withstand pressure from powerful corporate and geopolitical interests.
As for embeddedness - yes, big tech is deeply entrenched. But it is not too late. The current generation of AI systems is likely to become obsolete relatively quickly. Big investors are already concerned about this, and looking for their next lucrative source for returns. The next generation of AI models will embed themselves even deeper into our economic and social systems. This is exactly the moment to establish guardrails.
This cannot be left to policymakers alone. Citizens must also articulate what they want from AI and digital technologies – what is acceptable and what is not. Otherwise, the pessimistic view (“we can’t do anything, they’re too powerful”) becomes self-fulfilling. But people power is real. Public mobilisation has always been one of the most effective tools for curbing monopoly power.
JJ: That’s useful. Could you say more on that? In the absence of a more forthright regulator, what can be done? What tools or approaches can we use to tackle monopoly power?
CG: I think solutions will need to emerge from the bottom up. If we think of capital and the state as the top, then the impetus for change must come from alternative ideas, narratives, and models. We need a compelling vision of what an alternative economic settlement would look like – one capable of attracting broad public support. Where that will come from is unclear. We hope to contribute, but no single organisation can generate that vision alone.
Consumer behaviour also matters. People can choose alternatives, demand alternatives, or create alternatives, particularly in relation to big tech. Creativity and refusal can be powerful forms of resistance.
Another possibility is crisis. Crises create space for structural change – an AI bubble burst, a financial crash, or other systemic shocks. But as we know from 2008, crises often reinforce monopoly power rather than weaken it. In moments of crisis, dominant firms use their leverage to secure preferential treatment from governments.
Ultimately, we need organisation, demands, and political imagination. At the moment, government and public policy are deeply captured by private interests. Without countervailing power, change is difficult.
JJ: Perhaps we can end on a slightly more optimistic note. Where do you see signs of hope?
CG: Optimism is difficult, but I do think Zohran Mamdani in the US offers genuine hope. He has brought Lina Khan onto his team, and I expect him to be influential across the US, Europe, and the UK as an example of what can be done.
During the Biden administration, the Federal Trade Commission and the Department of Justice under Lina Khan and Jonathan Kanter generated real momentum. Their leadership emboldened authorities around the world. When that diminished, the global movement weakened. But anti-monopoly politics retains cross-partisan appeal. It resonates across ideological lines because it speaks directly to people’s lived grievances. If articulated clearly, it is a “sense-making” framework: it helps people understand the system they are living in. That makes it politically powerful.
The challenge in the UK is the absence of compelling public spokespeople. In the US, Mamdani, Khan and Kanter succeeded because they went out and spoke directly to communities. They listened. They mobilised people by engaging with their lived experience. That kind of political engagement is rare in the UK. Our politicians seldom frame issues through the experiences of their constituents unless doing so serves a narrow political purpose. That needs to change.