How Structural Racism Fuels American Monopolies

Danny Caine 
Well, folks, here we are. We’ve reached the end of our Power Plate season here on Building Local Power. In the past few months, we’ve investigated the intersection between race and labor at Amazon, via the lenses of organizing, and filming that organizing. We explored the environmental inequity of large language model AI systems and how that impact disproportionately affects poor communities and communities of color. Finally, we dove into the problem of consumer redlining, where outposts of chain retailers offer worse service in Black and Latinx neighborhoods. If you’ve yet to listen to those episodes, I highly encourage you to dive into the archives. Each conversation with each dynamic expert and activist made the season’s central conceit more persuasive and compelling: that monopoly power doesn’t just exacerbate systemic racism. Rather, monopoly power exploits systemic racism to build and maintain that power. It can be argued that systemic racism makes monopolies monopolies. Today, in our final episode of the season, we turn to the inspiration for our explorations, ILSR’s Power Play Report, written by my colleague Sue Holmberg. Sue is today’s guest, and she’s here to help us synthesize and contextualize what we’ve heard over the course of this season.

Sue Holmberg is Associate Director for Research here at the Institute for Local Self-Reliance. She writes on corporate power, small business, inequality, and systemic racism. She is co-author of the book, The Hidden Rules of Race, Barriers to an Inclusive Economy, and her writing has been published in the New York Times, Financial Times, The Atlantic, Time, The Nation, and Democracy Journal. She holds a PhD in economics from UMass Amherst, and it is our pleasure to welcome her to Building Local Power.

Sue Holmberg, thank you so much for joining us on Local Power to wrap up our Power Play season, inspired by the report that you wrote. With all of our guests, I like to start by kind of asking about their origin story or what brought us to this point in their research or their work. So tell us, what’s your path to ILSR? How did you get interested in monopoly power in general? Like, how did you get here?

Sue Holmberg
Yeah, thank you, Danny. Thank you for having me and also for doing this series. It’s really been a joy to listen to and to watch you carry forward the work. So, origin story. I think there are two life experiences that really brought me to this place, to ILSR and the work that I do.

One is growing up in Eden Prairie, Minnesota, which at the time when I was little, it was like this beautiful, know, bucolic landscape: farms, prairies, lakes, and then, you know, I gradually watched it, you know, be transformed into chain stores and McMansions and so forth, and…

The town did not have a center. If we wanted to go out to eat, it was a chain restaurant. If we wanted to go hang out anywhere, it was at the mall. In fact, it was where the movie Mallrats was filmed. So there was just like no civic life. And then I moved to Missoula, Montana. And it was such a stark difference. I’d bike downtown and go to the coffee shops and the farmers markets and the breweries. And people were just hanging out. And there was so much connection that was happening. I’ve always been a social scientist, so I was always observing these differences in how businesses and landscapes change culture and change human connections. And that just had a huge impact on me. I lived there for 10 years and loved it. And it really has…I’ve never forgotten that importance of local businesses and local economies.

The other thing is I was raised by a single mom and she was a home ec teacher and then was laid off and she was raising three kids on her own. Life was really precarious, our economic lives, and again, just as a little baby social scientist, I always wanted to understand that and certainly I knew I wasn’t dealing with structural racism. I wasn’t, you know, I had so many resources. I had a really strong mom. had, I was in a pretty decent school district. I had resources.

But it was still scary, and if it was now, like we would be really in a bad place, just like how much the economy has changed. So I wanted to understand all that. I wanted to understand the poverty that we lived in and the poverty that other people were expweriencing, and the inequality that other people were experiencing, race, racial and class divides. So, you know, I studied economics, got my PhD and…and that’s the path I took.

Danny Caine 
It’s so interesting. I think you and I share an element of our story in that moving to a college town with a walkable downtown and an active civic life kind of awakened us to the possibilities of small businesses and well-planned, well-organized communities from the suburbs that we originated in. So I’m interested in that part of your story. At what point did you realize, growing up in Eden Prairie, that there was something more or there was another way? When did it switch from like, ‘this is normal’ to like, ‘it doesn’t have to be this way?’ Or did that not happen until you got to Missoula?

Sue Holmberg
I think I just knew I was really bored and I wanted more vibrancy. And I would go down to Minneapolis and hang out in Uptown and the lakes. So I knew, but I thought it had to be a city. But I just really remember I was sitting at a picnic table in Missoula I was just blown away because people were gathering.

I just sat down to eat and talk to someone and it just like became a whole afternoon of connection and spontaneity and I was like, yes, more of this please. Yeah.

Danny Caine
Yeah, God bless those college towns.

Sue Holmberg
People don’t leave them.

Danny Caine
Okay, so let’s move on. So you get your PhD, you start working in the field, you become an anti-monopoly warrior and researcher. One of the things I love the most about Power Play is that under this banner of systemic racism and how it interacts with monopoly power and corporate power, it somehow brings together so much of what we fight for and against. Like you’re talking about dollar stores, you’re talking about pharmacy benefit managers, vertical integration, corporate consolidation. It seems to be like one way to bring it all together and talk about it all at once under the banner of this idea of structural racism and how it interacts with monopoly power. So what inspired you to start this research and start working on the report?

Sue Holmberg
Yeah, I need to step back a little bit into my own history and the history of kind of progressive economics. I was at the Roosevelt Institute for several years before I came to ILSR. And I think it was in 2017, I co-authored a book called The Hidden Rules of Race. And it was just like we were starting to really look at, like before that, there was still this dominant narrative that economics kind of, there were natural forces. And at Roosevelt, we were really talking about the rules of the economy. The economy is structured in a certain way. And I think we did a lot of great work on that. And then we were applying it to race. And we basically, it was almost like we cataloged a whole host of policies that created disparate outcomes, racial outcomes, all the way back to the slave codes. So we did that, but on the side, I was working on corporate power issues, and we never really made that connection. And at the same time, the anti-monopoly movement was just starting. There were just little shoots that were starting.

So when I got to ILSR, was like one of the first conversations Stacy Mitchell, our fearless leader, co-executive director, we had was on this connection. You know, what conceptually is going on? Because we knew that there, you know, corporations were impacting communities of color disproportionately, but more wanting to understand the…mechanisms going on and how, you know, the machine of American capitalism is fueled by structural racism.

Danny Caine
Cool, so like a little bit of unfinished business from earlier in your career.

Sue Holmberg
Exactly.

Danny Caine
So you decide to investigate and write about the relationship between systemic racism and monopoly power. What was your kind of methodology in putting the report together? Like how did you set about doing it?

Sue Holmberg
That’s a great question. kind of think a lot of the work I do is some scholars call it meta-analysis. It’s not doing original research where I gather my own data necessarily. It’s Eleanor Ostrom who won the Nobel Prize, think in, It was around 2009, 2010.

She did this. It’s just like gather, gather, gather, and then look for patterns. And that’s what I was doing. The the amazing thing about working at ILSR is a lot of the evidence and the stories were actually coming from inside our organization because people are working on broadband and clean energy and composting. There are so many rich examples and stories and analysis that I could draw from. And that’s also one of the things that inspired this report.

Danny Caine
So you ended up writing about a couple of specific industries then and using these four, I believe, as a framework to talk about this. You’ve got grocery, you’ve got waste, you’ve got pharmacy. How did you end up narrowing it to those four focuses?

Sue Holmberg
We wanted to do many more. It was about, this report took like three years already to write and we wanted to do a section on Amazon and we wanted to include the broadband team and have a section and the energy team and you know, those are my dreams but you know, at some point we just had to stop. But those examples are still very much infused throughout the report.

Danny Caine
So it’s not, readers should not be reading this report thinking these are the only four industries where this exists.

Sue Holmberg
No, no, no, this is scratching the surface. And honestly, there’s so much incredible work out there. A lot of advocates that are Liberation in a Generation, I certainly want to give a shout out to for all the amazing research and analysis that they’re doing. And Demos is doing incredible work talking about tech and racism.

So. No, this is just scratching the surface. And honestly, the podcasts that you’re doing in this series, listening to the Amazon organizers in North Carolina, they had totally different examples. So no, I think this is not exhaustive at all.

Danny Caine
Yeah, well, it’s been, I mean, these conversations have been really interesting and sobering and just fascinating for me to engage in. Like, I’m pleased to have the opportunity to take your great work and kind of explore how it operates in different places as well,

Sue Holmberg
Yeah.

Danny Caine
and to kind of use it as a springboard for these amazing conversations. so three years, it could have been a lot more industries. We settled on four powerful, anecdotes from four different industries. Tell us what you found. What is the finding of Power Play?

Sue Holmberg
So the central argument is, and I should just kind of step back. The anti-monopoly space, the antitrust space, advocate space, was really talking about racism in terms of disproportionate impacts. And I wanted to, we wanted to push that and demonstrate that, you know, we can’t solve racism just by, you know. If we had perfect antitrust laws, really strong enforcement, that is not going to be enough, but it is going to help. We wanted to really demonstrate that monopolies leverage structural racism to build their economic power. And what I did was I looked at, as you said, these different industries as case studies, and I came up with six, I believe, patterns of what I saw, like different tactics that you could kind of see across industries, and there are certainly more, as I said.

Instead of going through all of them, I wanted to talk about two. So one is monopolies that locate their facilities, like production facilities in poor communities and communities of color who do not have the political and economic resources to push back. The main example I use is the Waste Management. Inc., WMI, I think they’re WM now actually, siting of its toxic incinerators in landfills in particularly Black communities. I talk about Emelle, Alabama, which is the largest landfill in the country. Because these communities are so vulnerable, they’re able to make these mega dumps, you know, something that an affluent white community would not tolerate and would be able to resist. The same is true for fossil fuel companies and energy conglomerates who have a history of locating their polluting facilities in communities of color. And then similarly, Amazon does the same thing as your podcast, you know, what the union organizers talked about. Their facilities draw intense air traffic or air pollution from truck traffic and they’re steering their professional offices to more white affluent areas.

Danny Caine
Not to mention, it’s increasingly a problem with AI data centers, which we talked about with Dr. Shaolei Ren on this podcast. It’s the exact same thing. It’s just siting these environmentally toxic places in areas that don’t have the political will or resources to fight back.

Sue Holmberg
Exactly, exactly. So then the other one is also a location decision, but it’s one of exclusion. The best way to explain it is to give you an example, Walmart. Its march to dominance in the grocery sector, a key part of that has been to locate their supercenters, their stores that have groceries in them, on the outer reaches of cities and metro areas. And then what they’re doing is, oh, they’re drawing customers to them, pulling customers away from independent grocery stores that have been serving those communities and that have been excluded. Those independent grocers are shutting down.

Danny Caine
And there’s, of course, no, if people are driving to Walmart and they’re willing to go, there’s no incentive to replace the grocery stores that shut down. Because Walmart’s like, ‘they’re just going to come to us,’ leaving what we call food deserts, which have, is again, we’ve done a lot of interesting work recently at ILSR about that.

Sue Holmberg
Exactly. And I think that’s worth explaining. So Stacey Mitchell, the co-ED of ILSR wrote an amazing article arguing that food deserts have only, are basically like a 30 year old phenomenon. And poverty has, you know, existed always. Food deserts are a product of bad antitrust enforcement, you know, corporate consolidation in the grocery sector and then the resultant disappearance of independent grocers. And it’s really important to understand that connection.

And I would also say that some dominant corporations do operate in poor communities and communities of color, but they’re often leaving. They’re leaving more and more. And basically, they’re facing shareholder pressure. Walmart is closing its pharmacies in black communities. You know, I just read the other day in Boston, they’ve lost three last year. JPMorgan Chase is closing down banks. It’s all, again, it’s creating all these kinds of consumer deserts around really essential human needs.

Danny Caine
Yeah. the January 9th episode of Building Local Power brings about consumer redlining. And so that means even if there is a Target or a Walmart in a black neighborhood, it’s very frequently less pleasant of an experience to shop there. Those are the places where things are locked up. Those are the places that are dirty. Those are the places where there aren’t proper staff or cleaning supplies or whatever, the actual shopping experience of going to these chains that operate in black neighborhoods is often worse than going to the same store in a white neighborhood. Yeah, I’m really enjoying how this conversation is tying together our whole season. I’m glad you went last. One thing, having these conversations, I guess to be a little bit of a devil’s advocate here, I’ve had a couple people say, it’s like, well, Walmart is putting their stores there because it’s cheap. It’s an economic decision. Like the AI data centers are going in these communities because it’s an economic decision. So how would you respond to that? People just saying it’s a numbers game.

Sue Holmberg
So, Walmart got so big by taking advantage of bad antitrust enforcement policy, and one of the promises that was undergirding that lack of enforcement was the so-called consumer welfare standard, that big is better for consumers. Well, guess what? It’s not true at all because we’ve been seeing price gouging so much, you know, in the news and in our grocery carts. But it’s been really bad for communities of color. And so there has been, I argue, this really kind of, when you are talking about a country that has such severe racial disparities and you come up with a theory like that, it’s just inherently negligent. So when a corporation is allowed to get that big, there is an obligation for them to serve consumers and they’re not doing that.

Danny Caine
Powerful stuff and yet more evidence the consumer welfare standard was flawed from the start. What surprised you as you wrote Power Play?

Sue Holmberg
It wasn’t so much surprise, it was just something that struck me. The bad thing that struck me was the patterns around the deserts. That if you see a consumer desert, a community that is lacking in basic services that they need to live their lives, you can pretty much guarantee that it had to do with antitrust and corporate consolidation and the loss of independent enterprises, you know, all the way from banks to pharmacies to grocery stores, broadband and so forth. I think, you know, Stacey’s article really shed a light on that and I hope that we explore that more across the board, across industries.

The really good thing is just watching communities fight back. I think it’s, you know, watching Tulsa, Oklahoma residents fight to keep out dollar stores and build a grocery store and how that story has just caught on like wildfire and how many communities are rejecting dollar store chains. It’s not surprising, but it’s just like, you know, something that is really incredible to see and that we should hold on to.

Danny Caine
That’s great. of course, we’ll put a link to Stacy’s article in the show notes. Definitely worth a read as is the whole power play report. I’m going to end on the idea of fighting back. I’m glad you bring up what people can do. That’s where we’re going to go. But one more question about just the racism and the structural damage that these policies and companies are doing to these communities. It struck me reading this, that these aren’t four separate industries. Like all of this is interconnected. It’s really easy to imagine how someone could get caught in all of these together. For instance, someone lives in the food desert and they have to do all their grocery shopping at Dollar General, which means much more processed food and less fresh produce. So they’re more susceptible to something like diabetes. And then of course, insulin, it’s very expensive. They get caught in this loop where they’re giving the pharmacy all this money, but there’s no sustainable banking options in their community either. And they can fall into the payday loan trap. And all of this is happening in a community where there’s a garbage dump and there’s more ambient pollution, which makes the health problems worse. Do you think the interconnectedness of all of this is maybe a reason why it’s so persistent? Is that like, this is an interconnected systemic problem? I guess that’s really a yes or no question, but I wonder if you could share some thoughts on the idea that these are all kind of interconnected.

Sue Holmberg
I mean, absolutely. Another example is toxic sitings and what they’re doing to health. These communities were so much more vulnerable to COVID because of the air that they were already breathing. And then, like you said, medicine prices and so forth and lack of access to these medicines or they’re too costly and so forth. And I think that it’s what’s so scary about the patterns is because a vulnerable community is being preyed upon from all different sides. And then it, it just builds that and the of magnitude of oppression that is happening. But I will also say, you know, going back to the resistance story, that fighting a corporation, when a community does that, it’s like a foothold. It flexes a muscle that they haven’t used in a while, and I think it’s like a really powerful way to resist and start to build quality of life in empowered communities.

Danny Caine
I think your answer there is kind of emblematic of the whole report because it’s like the report does cover some pretty bleak stuff, but I don’t think power play is ever helpless because you have this focus on solutions and you end every section with ideas of how to fight back. So I think my last question for you today is just that: how do we fight back? And I’m curious to hear you answer on three different levels. What can individuals do? What can communities and municipal governments do? And what, if anything, can the federal government do to fight back against this monopoly power exploiting systemic racism?

Sue Holmberg
I will start federally. We’re about to have a new administration. Maybe by the time the podcast is live, we will have a new president. So it really remains to be seen how antitrust enforcement plays out, which is really important for reining in monopolies.

But states were the first innovators of antitrust enforcement and we’re really excited to see what certain states are doing right now and encourage listeners to revisit our site and see what’s going on because there’s going to be a lot. It’s pretty exciting.

Citizens, of course, buy local always when you can. Also, importantly, is to get active and push, especially your local officials, to resist corporations. There’s so much that local governments can do in terms of stopping dollar stores from coming in, in terms of how they spend tax base and public dollars. Are you going to spend it on Amazon, the procurement dollars, Amazon or local businesses? Keeping toxic waste sites out of the community and so forth. There’s just so much that local communities can do and as I’ve said a few times during our conversation, there’s just a lot of power to build at the local level.

Danny Caine
Well, what a great place to end a podcast called Building Local Power. Read the Power Play Report for a detailed roadmap of what has gone wrong and what you can do to fix it. Sue Holmberg, thank you so much for coming on and thank you for entrusting us with your work for this series-long exploration of these issues. It’s an honor to have you as a guest and it’s an honor to work with you.

Sue Holmberg
Thank you, Danny. I really appreciate it.

Danny Caine
In the show notes, we’ve got a link to Sue’s Power Play Report. If you’ve been interested or galvanized by what you’ve heard this season, I encourage you to read it. My thinking on race and monopoly has definitely been shaped by the report’s compelling argument, and perhaps you will experience the same thing.

Coming up in a few weeks on Building Local Power, we’re launching a new season called The New Class, where we’ll interview progressive or interesting state and local politicians that won in 2024, many for the first time.

We hope you’ll join us on that new journey. If you enjoy listening to Building Local Power, we’d love it if you could subscribe, leave a review, or share an episode with your friends. Your support helps us keep doing this work and we wouldn’t be a show without you, our listeners. Thank you as always for tuning in. This episode of Building Local Power was produced by me, Danny Kane, with the help of Reggie Rucker. I did the editing with help from Taya Noel, who composed the music. Thank you so much for listening. See you in a few weeks.

• Stacy Mitchell’s article on grocery prices, “The Great Grocery Squeeze.”
• ILSR’s “Power Play” report