Strong Intellectual Property and Weak Antitrust: How the End of Vertical Restraints Fissured the US Political Economy
2026-02-05
What explains rising inequality after 1980? Explanations describing immediate causes, like skill-biased technological change, financialization, or globalization, assign causality to homogenous market forces and largely focus on distributional struggles between capital and labor. They thus ignore how distributional struggles among firms drove changes to industrial organization that are upstream of those explanations. We show how public and private actors strove to change the interlocked legal regime governing domestic and global intellectual property (IP) rights and antitrust policy to prioritize the value of intangible assets like IP, shifting the distribution of profits among firms and contributing to the ‘fissuring’ of industrial organization. Focusing on the United States, evidence from government archives, private lobbying, and changes in IP and antitrust law show how business and government actors organized a coalition supporting this new IP regime. Ironically, this regime eventually sundered its own coalition, pitting different segments of capital against one another.