Confessions of a Monopolist - Frederic C. Howe’s Warning and the Fight Today

Monopoly is not merely a market problem. It is a constitutional problem.

When private actors can levy taxes on the arteries of commerce, control the rules of politics and fix the price of participation in public life, the people are not free. Elections happen, but policy flows from chokepoints owned by a few. 

The Political Economy Project measures value not by stock charts but by the productive powers of labor—energy, industry, logistics, science and the education that forms citizens. Monopoly obstructs each of these. It directs capital away from building and toward hoarding by insiders.

The secret of great wealth, as described by Frederic C. Howe’s 1906 book Confessions of a Monopolist, is not found in traditional virtues like saving, economy or competitive business skill but rather in a two-part maxim centered on monopoly and political manipulation.

Within this framework, monopoly does not merely lead to “bad prices,” monopolies subsume the people’s national purpose. 

The Core Secret: Making Society Work for You

The primary secret of great wealth is encapsulated in the principle make society work for you. This means achieving wealth not by employing a handful of laborers but by securing a monopoly over a fundamental resource or service that society must use.

Howe asserts that true wealth is generally not accumulated through competitive retail business or manufacturing where businesses face high mortality rates. Instead, it comes from monopolizing natural opportunities of the earth.

Key aspects of this principle include:

• Exploiting Universal Necessity: If you have a monopoly over a necessary commodity (like oil, coal, copper, or gas), you can raise the price by a fraction (e.g., a penny to the gallon or a few cents per thousand cubic feet), and the pennies of millions of consumers will accumulate into millions for the few.

• Passive Wealth Generation: Once a man owns a piece of land in a rapidly growing city, a franchise, or a mine, he can go abroad and return years later to find his holdings more valuable, as "Society will have been busy all the time" working for him. The growth of cities and population makes money for those who own street railways and gas companies, a process likened to the maxim: "You press the button, Society does the rest".

• The Power of Monopoly Collateral: Monopolies provide the best collateral for financing because they are difficult to replace and cannot "get away.” Bonds can be issued and sold on a franchise even before construction begins.

In addition, modern infrastructure built on computer chips or rare-earth minerals will also fit under Howe’s framing ripe for monopolization.

Legislative Capture and Corruption

Monopoly is directly dependent upon specific legal grants and protections, which often requires manipulating or corrupting legislative bodies.The monopolist recognizes that success, after a certain level of financial achievement, requires political skills not just business skills.

• Dominating Political Organizations: The central strategy is to achieve political influence and get political power. The monopolist works to become a political insider or party boss. This control is maintained by dominating the party organization (e.g., as Chairman or Treasurer of the Executive Committee).

• Funding and Retaining Politicians, Controlling Nominations and Elections: The monopolist dictates the makeup of political tickets through financing the party. Monopolists are large contributors to campaign funds, often giving money to both parties to keep the organizations alive between elections. Politicians of all ideological shades are "retained or dominated by financial interests."

• The Revolving Door: Great wealth often comes from "politicizing your business." The phenomenon of the politicized businessman—the "revolving door between Washington D.C. and the corporate head offices"—is key to maintaining advantage.

Neutralizing Opposition and Managing Public Opinion

When opposition arises, specific strategies are deployed to discredit reformers and control the narrative.

• Discrediting Opponents: Reformers and independent candidates are characterized as "socialists," "anarchists," or "demagogues" to alienate business interests and the general public.

• Manipulating the Press: The monopolist gains an interest in local papers to "mould public opinion" and protect vested rights. Media is owned or influenced by large advertisers to discourage supporting opposition candidates.

• Co-opting Reformers: Honest opponents are managed by offering them minor concessions (harmless amendments) to ordinances or by pressuring them through their clients and party leaders.

• Mobilizing Moral and Wealthy Interests: Mobilizing clergy to campaign against an opponent by linking them to something “un-Godly” threatens the believers. 

• Applying Social Pressure: Monopolists ensure opponents are socially neglected, which can damage their business and standing, forcing them out of politics.

Financial and Business Exploitation of Privilege

Monopolists use the financial structures they control and the privileges they secure to eliminate competitors and guarantee profits.

• Exploiting Banking Control: The financial elite controls the banks, trust companies and insurance companies. They use the savings of the people (depositors) to underwrite securities for monopolies, thereby obtaining the stock for free while the public buys the bonds.

• Acquiring Competitors: Rival companies are bought out to eliminate alternative proposals that might benefit the city.

• Using Exclusive Agreements: The monopolist can starve out independent operators, forcing them to close down or sell their companies at the monopolist's figure. 

• Wall Street Manipulation: The financial game is rigged for insiders. Monopolists work with major bankers who control the market, determine collateral values, and can "make the news or the rumors of news" to manipulate stock prices. By staying on the "inside," the monopolist can profit immensely, whereas outsiders ("lambs") are "shorn".

Specific mechanisms employed by the monopolist is done with the precision of a calculated military strategy, ensuring the desired outcome is guaranteed.

This system works like a machine designed to extract currency: the monopolist builds the extraction mechanism (the monopoly), acquires the operational license (the legislation/franchise), and then installs political operatives (the bosses/politicians) to ensure the machine is never disassembled or taxed, allowing the dollars of the many to make up the billions of the few.

Core Shifts in Public Behavior and Ethics

The central remedy Howe suggests is moving away from the "tempting creed" of seeking "something for nothing" or "making the other fellow pay," which forms the basis of monopoly and corruption.

Instead, the suggested ethical and economic shifts in public behavior include:

• Insisting on Reciprocity and Fair Value: The system of equality is built on the premise of "something for something", meaning that individuals should demand "labor for labor" and "value for value".

• Embracing Economic Honesty: The public must cease "looking for something for nothing". If this greedy impulse continues, everyone will ultimately lose their possessions and liberties.

• Operating in a Free and Fair Market: Individuals should "give an honest day's work for an honest wage" and "offer an honest product in a free market".

• Rejecting Privilege: Citizens must "ask for nothing without offering recompense". This aligns with the principles of "equal chance" and "a fair field and no favors," which are noted as being non-corrupting forces.

If the public commits to these behaviors, demanding compensation for value and refusing to seek unearned privilege, the consequence suggested is that "no man can take away your liberty". This focus on personal integrity and honest dealing is described as the "crux of Frederic Howe's lesson."

Required Understanding and Ineffective Actions

To challenge the elite control, an intellectual shift is also necessary:

• Understanding the System: Howe's book provides "clues... to reverse the trend". The power of the financial elite is "vulnerable" once those outside the "charmed circle" know the "elementary principles of political business". Once understood, people can "devise ways to halt the slide into the maw of complete totalitarian control" and "end the shearing process."

However, Howe warns against relying on the traditional single candidate political revolt:

• Ineffective Political Action: The solution "does not lie In rebellious taxpayers electing independently minded politicians". The source notes that if an independent politician is elected, they "certainly won't stay in office" due to the overwhelming "weight of pressure from entrenched special interests."

The challenge to the system of elite financial control is similar to stopping a rigged game. It's not enough to simply elect a more honest player to the table, because the rules (legislation) are already set up to favor the dealer (the monopolist elite) and the honest player will quickly be taken out of the game. 

Instead, the onlookers and participants must fundamentally change their demands and create a political policy platform. And the people must stop hoping for a lucky win based on rigged odds ("something for nothing") and demand that the entire marketplace adhere to fair, universally observed rules where value is exchanged only for equal value ("something for something").

The Fight Today

A century after Howe, the instruments have changed—cloud computing instead of catenary, algorithms instead of switchyards—but the playbook is recognizable. Modern monopolists seek exclusive rails (app distribution, ad tech stacks, fulfillment networks, PBM formularies), then legally entrench them by contract, standard, and regulatory capture. 

Howe’s Monopolists that “make politics their business” becomes trade association warfare, revolving-door lobbying, public-relations whitepapers and “self-regulatory” committees that bless the status quo.

Monopoly is the institutionalization of “something for nothing”—the art, as Howe has it, of making society work for the few. We must build a civic ethic that understands labor precedes capital and understands how the monopolist moves.

Check out Matt Stoller’s substack (https://www.thebignewsletter.com) who is one of the best writers on Monopolies.