2025 Stone Lecture in Economic Inequality at the Harvard Kennedy School

Key principles that underpinned our approach to governing at the Federal Trade Commission

October 16, 2025

Thank you to Dean Weinstein and Professor Bloome, for your thoughtful remarks and kind introductions. I’m so glad to be with all of you today to share a few reflections with you and look forward to your good questions.

I’m grateful to the Stone Foundation for supporting this Forum on economic inequality—a topic of extraordinary importance at this moment in American history. And it’s a real honor to have the opportunity to follow in this series a set of scholars I so admire, including Professors Acemoglu, Stiglitz, Saez, and Piketty.

Those of you in this room today, like many who have sat in these seats before you, may go on to be heads of states, members of legislatures and parliaments, and advisors to leaders around the globe.

The call to government service finds us for a variety of reasons. At its best, public service advances the public good—or what the Constitution describes as securing “the Blessings of Liberty to ourselves and our Posterity.”

Just over a century after America’s forefathers had broken free from monarchy, our nascent Republic faced another threat to liberty.

The industrial revolution had delivered remarkable progress and breathtaking innovations, with railroads newly connecting the country and creating economic opportunity. But concentrated control over these technologies was creating new concentrations of wealth, yielding new industrial “trusts” who wielded extraordinary economic and political power.

A coalition of farmers, workers, and small merchants agitated and organized, pushing the government to bring the industrial trusts to heel. These efforts prompted two seminal antimonopoly laws: the Interstate Commerce Act of 1887, which required the railroads to offer equal rates for equal service, and the Sherman Antitrust Act of 1890, which broadly prohibited monopolization and restraints of trade.

These two pieces of legislation can be understood as some of our first federal laws promoting fair competition. But they are also part of a broader antimonopoly tradition. Antimonopoly is a governing philosophy that broadly views concentrations of power as a threat to freedom, recognizing that tyranny comes in many guises. Just as the Constitution creates checks and balances across our government, safeguarding against concentrated political control, antimonopoly laws create checks against concentrations of economic power.

And indeed, these efforts were understood as deeply intertwined. As Senator Sherman declared:

“If we will not endure a King as a political power, we should not endure a King over the production, transportation, and sale of the necessaries of life. If we would not submit to an emperor, we should not submit to an autocrat of trade, with power to prevent competition and to fix the price of any commodity.”

In other words—no kings, be it in government or in business.

Through the mid-twentieth century, the US government passed a variety of antimonopoly laws building on these foundational efforts. From the Federal Reserve Act and the Federal Trade Commission Act to the Packers and Stockyards Act and National Labor Relations Act, our government created a constellation of legal regimes designed to structure and check private economic power and promote decentralization of ownership in the American economy.

Animating these efforts was a recognition that securing democratic checks against concentrated economic power is vital for securing real freedom for people—freedom from the arbitrary exercise of coercive power, as well as the freedom to build a life of one’s choosing.

Faced with managing one the most severe economic depressions our nation had faced, perhaps nobody better than FDR understood that how we structure our economy deeply implicates our viability as a democracy.

As he explained in an address to Congress in 1938:

“Unhappy events abroad have retaught us two simple truths about the liberty of a democratic people.

The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is Fascism—ownership of Government by an individual, by a group, or by any other controlling private power.

The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living.

Both lessons hit home.

Among us today a concentration of private power without equal in history is growing.

This concentration is seriously impairing the economic effectiveness of private enterprise as a way of providing employment for labor and capital and as a way of assuring a more equitable distribution of income and earnings among the people of the nation as a whole.”

This idea that securing checks against the concentration of economic wealth and power was essential for maintaining our national project of self-governance remained foundational wisdom for decades following the New Deal.

In 1950, Congress passed the Anti-Merger Act—a law that added further checks on market consolidation. While debating the bill, members on both sides of the aisle cited the role economic consolidation had played in facilitating the rise of totalitarianism abroad, arguing that this law governing America’s market structures would be an essential bulwark against authoritarianism at home.

This national policy in favor of free and fair competition over market consolidation also proved to be a bedrock of America’s dynamism and economic success. Open and competitive markets mean that the best ideas win. Businesses get ahead not through exploiting special privileges, but by competing on the merits. Decades of checking monopolization in favor of competition allowed our country to harness the ingenuity and hard work of our citizens and reap both breakthrough innovations and remarkable technological feats.

Around forty years ago, however, we decided to experiment with a different approach. Policymakers bought into a set of assumptions: that markets tend to be perfectively competitive and self-correcting; that monopoly power is generally fleeting; and that a hands-off approach to antimonopoly policy would deliver great efficiencies that would outweigh any costs.

In recent years, the severe costs of this redirection have been on full display. Brittle supply chains where a single disaster or contamination leads to nationwide shortages. Farmers making much less while consumers pay much more. Healthcare markets with skyrocketing costs even as Americans’ life expectancy gets worse. Dominant technology platforms whose arbitrary decisions can unilaterally sink businesses, sway elections, or shut people out of the public sphere. A national champion aircraft manufacturer whose planes fall apart in the sky. Across markets, extreme consolidation and declining competition have led to private bottlenecks and private grift—enriching a few while making life concretely and materially worse for the vast majority of Americans.

Present circumstances also illustrate the serious political dangers of economic consolidation. We see on full display how centralized power in business can fuse with the power of the state, giving greater force and impact to authoritarian desires.

The democratic risks of economic concentration extend further. As wealth inequality reaches staggering proportions today, 7 in 10 Americans believe that the American Dream—that if you work hard, you’ll get ahead—no longer holds true or never did. Only one in four believe that they have a good chance of improving their standard of living, a record low dating back nearly 40 years. And across ideological lines, 3 out of 4 Americans say that when the system feels rigged, it’s hard to believe in the value of democracy.

Today’s vast economic inequality is the product of several factors. But our governing institutions—and the legal and policy choices they have made—rank extraordinarily high on the list.

While the idea that checking extreme concentrations of economic power is central to preserving the conditions for a democratic republic remained central to American policy and politics through the mid-century, starting in the 1970s this approach took a backseat to bipartisan policies much more permissive—if not actively encouraging—of centralized economic power.

Legal regimes across domains saw the imprint of this new set of ideas and ideologies—from labor law and intellectual property law to campaign finance law and the laws governing our banking and financial systems.

And indeed, mitigating and reversing the grotesque levels of economic inequality we see today will ultimately be a project for economic governance, pursued through our democratic institutions.

I had the great honor of leading one of these government institutions over the last few years as Chair of the Federal Trade Commission.

While fairly small, the agency had been at the forefront of the Reagan administration’s efforts to radically overhaul our economic policies—a set of changes that proved remarkably durable.

My selection as Chair of the Federal Trade Commission was unusual. But the desire for reform had bipartisan support, with 21 Republicans joining the Democratic caucus in voting for my confirmation. Taking the helm at this time, it was clear my mandate was to invigorate antitrust and consumer protection and ensure it was tackling the problems of the modern economy.

A key question during my tenure was how much time we would have. The Reagan-era pivot proved durable, in part, because those government reformers had 12 years to entrench their priorities into the institution’s scaffolding and to design agency procedures in ways that favored their substantive goals long after they had left. I had a working majority at the FTC for two and a half years. Those two and a half years were among the most active and ambitious in the FTC’s recent history, and I’d like to briefly share some of the principles that underpinned our approach to governing.

First, we canvassed and identified the full set of legal tools and authorities that Congress gave the agency. Strikingly, dozens of legal provisions sat unused in plain sight—from authorities that strengthened the agency’s hand in stopping breaches of people’s sensitive health data to authorities on tackling unfair methods of competition, the central mandate that had animated the agency’s creation. The disuse was partly a legacy of the deregulatory push set off by President Reagan, where federal agencies were encouraged to stop or slow down enforcement of key laws and roll-back protections for consumers, workers, and small businesses against corporate lawbreaking. In the aggregate, disuse of core legal authorities results in federal agencies serving a strikingly different role that what Congress sought in creating them, or government actors trying to fix problems with just a fraction of their tools.

Over my tenure, the FTC activated or revived close to a dozen legal provisions that had either been dormant for decades—or never used at all. The material benefits from these actions were clear. They included penalizing firms for fraudulently claiming their products were Made in America; enforcing the law against coercive noncompete clauses, resulting in thousands of workers being freed to change jobs or start new businesses without constraint; and issuing a half dozen new rules that codified key protections, from bans on fake reviews online to requiring that firms make it easy to cancel subscriptions.

Second, we mapped out an agenda that prioritized tackling the biggest pain points for Americans. The FTC’s activity in recent years had included taking on business practices by ice skating teachers and organists—prompting outcries that the agency was focused on relatively small-ball players while ignoring lawbreaking by major corporations. During my tenure, the FTC reoriented its approach to prioritize tackling misconduct that was resulting in the greatest harm for the greatest number of people. Practically, this meant taking on lawbreaking by some of the largest corporate players in the most significant sectors of our economy, including dominant providers in agriculture, healthcare, and tech.

Third, we focused on eliminating self-imposed red tape and excessive bureaucracy that had accumulated at the FTC. Since the Reagan years, a key mechanism used to slow down agency actions was excessive and elaborate internal procedures—many of which went above and beyond what the law required. For example, the agency in the 1980s had adopted procedures for issuing consumer protection rules that meant a single rule could take, on average, 5-10 years to finalize. After streamlining these procedures by aligning them with the statutory requirements, we were able to finalize consumer protection rules in under two years.

Similarly, internal procedures in the past had required the multi-member Commission to vote every time a subpoena was sent out as part of a new investigation. Practically this significantly slowed down agency investigations—and meant that during times of Commission vacancies or deadlocks, investigations could be frozen entirely. We took steps to remove these obstacles, empowering agency staff to move more quickly and nimbly. Ultimately these steps allowed the FTC to move more effectively and efficiently and significantly expand its volume of activity, with dozens of major lawsuits, a suite of new rules, and reams of timely research—among the most active periods in the agency’s 110-year history.

Fourth, we focused on ensuring that the agency’s actions were geared to effectively stop harms and deliver tangible benefits in people’s lives. A common temptation in federal agencies had been to opt for half-measures, or to push change through codifying new procedures rather than pushing through substantive bans on abusive business practices. For example, the FTC’s privacy enforcement had long focused on requiring that businesses disclose their data practices in privacy policies made available to their consumers.

Practically this meant that businesses could engage in a range of data abuses and still stay on the right side of the law—so long as they had given themselves adequate leeway in their disclaimers. Analogously, the FTC had adopted an approach in merger enforcement that frequently allowed illegal mergers to proceed so long as the merging companies agreed to stop certain behaviors or divested certain assets. Too often, the practical result of this approach was that firms would merge and ignore their promises—or the divestitures would fail to work. When reviewing the Safeway/Albertsons merger in 2015, for example, the FTC decided to allow the deal to proceed so long as Safeway divested hundreds of stores to a third-party buyer. Within a year the third-party went bankrupt, selling most of the stores at a discount back to the now-merged company.

Reforming this approach required a willingness to take clearer, bolder action. For example, we moved away from requiring privacy disclosures and instead presumptively banned data brokers from furtively selling people’s sensitive health or location data in the first place. Rather than try to rectify the harms of illegal mergers through half-measures, we routinely blocked major deals that would have eliminated competition. This work included stopping a major defense industry deal that would have dangerously reduced competition in rockets—the first time the government had halted continuous concentration in the industrial defense base. It also included halting consolidation across healthcare markets, from mergers that would have deprived Americans of innovative treatments and more affordable medicines to tie-ups that would have consolidated hospital systems and degraded the quality of care.

This preference for clear bright-line rules over murkier half-measures had a host of benefits. First, clear and simple rules better allow small businesses to compete on a level playing field, whereas complex, regulatory procedures often favor big firms with huge compliance budgets and massive legal teams to navigate the bureaucratic maze and identify loopholes. Second, clear rules can be overseen by the government more effectively and efficiently, conserving resources and allowing officials to spot violations more quickly. And third, clear rules and substantive bans are more likely to result in tangible benefits to people’s lives. For example, when crafting the FTC’s rule on noncompetes, we could have adopted greater procedures—requiring that any business seeking to use a noncompete provide clear notice to employees, a certain number of days in advance and through specific means of disclosure. These types of measures frequently create more burden or process for Americans without clearly or tangibly protecting their rights or making their lives better. Instead, we opted for a clear ban—prohibiting the vast majority of noncompetes—ensuring that people would be able to experience the tangible benefits of the rule.

Last but not least, we embraced opening up the agency to the public. While the FTC routinely got input and advice from major corporations, top law firms, and an army of lobbyists, the vast majority of Americans barely knew that the FTC existed or the many ways that it could help them. This risked skewing the agency’s priorities as well as its understanding of what problems existed in the economy. Within a few weeks of my joining the FTC, we held the agency’s first-ever open commission meeting—a practice we would continue for the entirety of my tenure. Any person across the country could sign up to speak for several minutes at our meetings to share directly with the Senate-confirmed political appointees what problems they thought we should be using our tools to tackle.

This regular practice of hearing and getting feedback from Americans, regardless of whether they occupied positions of power or influence, directly informed how we set priorities at the FTC. More generally, the practice also helped guard against the distorted and skewed communications channels in DC, where both information and feedback loops are primarily dominated by corporate interests, pundits, and those with power—people whose interests may be directly at odds with the Americans the FTC is designed to serve. It also served to communicate what we were doing to the public at large, something often seen as extraneous to governing but which is in fact a core part of it.

Rebuilding our governing institutions will require a clear-eyed assessment of why the American public had overwhelmingly lost faith that government was working for them. It will also present an opportunity. Much of the work of recent administrations was done through federal agencies that bore the imprint of a 40-year anti-governance project. As we look beyond the DOGE wreckage, we should figure out what a reformed approach to governing should look like—rather than assume we should go back to the way things have been.

What is our battle plan for governing in a way that delivers on-the-ground results for working people, especially if stuck with a Congress that struggles to pass legislation and a judiciary that is largely hostile to Democratic executive action? How do we design civil service protections to balance expertise with democratic accountability, to ensure that a President’s agenda can get enacted? If we govern again absent any legislative changes, what is the full scope of authority that agencies across the federal government—from the Department of Health & Human Services to the Patent and Trademark Office to the Department of Agriculture—can wield, and how do we want them to materially improve people’s lives? These are not small questions. But if Democrats are serious about not just taking power again but also wielding it effectively, we’d be wise to grapple with them now.