Chapter 14: Entrepreneurship and the American Dream

Your weekly excerpt from one of my books. This week: "The Hidden History of the American Dream"

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Entrepreneurship and the American Dream

There are lots of different ways of defining the American Dream. While the “middle class job with a house in the suburbs” is the most common one, being able to start and grow your own family-owned business is the version of the American Dream that Louise and I pursued.

I started my first business at the age of 17 with $25. I paid that amount to rent a shelf in a head shop (which sold mostly pipes, bongs, and cigarette papers) across the street from Michigan State University in East Lansing.

The shelf had a sign: “The Electronics Joint—leave your stereo or TV here for repair, and we’ll return it fixed within a week. Free estimate of charges before work is done.” The guy who ran the head shop managed the shelf for 10 percent of our revenues plus the $25-per-month shelf rental; within two years the venture had grown to include five employees, and we moved into our own storefront down the street.

As the business grew, however, I didn’t manage it wisely and ended up about $3,000 in debt, which was a lot of money in 1968 for a part-time student and part-time DJ. Ultimately, I had to shut the company down, declare bankruptcy, and go back to work full-time as a radio DJ.

That didn’t turn out so well either. I got fired when I played two Black female artists back-to-back, a violation of station policy at the time, and then refused to promise to never do it again.

With my unemployment check, I bought some herbs at a local General Nutrition Center store and started an herbal tea company — Woodley Herber — that grew over the next six years to 19 employees. One of our products that contained ginseng (which was then hot as an aphrodisiac) was picked up by Larry Flynt to market through his brand-new magazine, Hustler, making him a million bucks and turning a nice profit for my partner and me. Louise and I sold our half of that company to our employees in 1978 to move to New Hampshire and start a community for abused kids.

We wiped out our savings buying land for the children’s village and living for almost five years on a salary of $25 per week. I still had an American Express Platinum Card, a leftover from the prosperous Woodley Herber days, so in 1983, with a $10,000 (or was it $15,000?) line of credit against that card and some income from writing for a few magazines (I was contributing editor to seven of them that year), Louise and I moved to Atlanta and opened International Wholesale Travel and its retail operation Sprayberry Travel.

That turned out to be quite a success. Within three years we’d marketed the company onto the front page of the Wall Street Journal and had about $6 million in annual revenues, so we sold the company in 1986 to retire to Germany for a year to do volunteer work for the international relief agency Salem International.

We moved back to Atlanta in 1987 and used about $50,000 we had left from selling the travel company to start an advertising agency, The Newsletter Factory, which quickly grew to generating several million dollars a year in revenue and had about 20 employees. We sold that business to our employees on a seven-year buyout in 1996 and retired to the backwoods of Vermont to write books and enjoy life.

That didn’t last, either: Thanksgiving week of 2002 we drove back to Michigan to spend the holidays with family and all the way there all we could hear on the radio was rightwing talk. So, I wrote an article for Common Dreams titled Talking Back to Talk Radio positing that within a politically 50/50 nation there should be Democratic/left voices on the radio, too.

A married couple who were venture capitalists, Shelly and Anita Drobney, reached out and asked me to fly to Chicago to meet with them, and, to make a long story short, that article became the first business plan for Air America Radio, as Shelly documented (and reprinted my article) in his book The Road to Air America.[clxix]

As of this writing, I’m in the 21st year of The Thom Hartmann Program that’s been the #1 progressive radio talk show in America for well over a decade. It’s become a business itself (although it’s the one business we didn’t set out to do that way: it was supposed to just be “proof of concept” for Air America), and more recently we’ve started a series of Substack publications on politics, ADHD, and NeuroLinguistic Programming that are also adding to our retirement funds.

All of this is by way of saying that I am a somewhat typical “serial entrepreneur,” and fortunately we have a lot of them in America. They are generally middle-class people (my dad worked in a tool-and-die shop for 40 years, and my mom was a full-time homemaker with four sons), they generally do not have an inheritance or family money to draw on, and yet they spend their lives pursuing the American Dream.

It’s what I’ve been living since I was a teenager when I started The Electronics Joint.

Increasingly, though, that part of the American Dream is under assault from the monopoly power of big business.

In a way, this is “back to the future.” In the 1880s, John D Rockefeller, for example, used to buy up all the available railroad contracts for shipping oil to prevent smaller competitors from getting their product to market. Once they were in trouble financially, he’d give them “an offer they couldn’t refuse” and buy them out, making his large company even larger.

Andrew Carnegie did this with steel and JP Morgan did it with banking; there were trusts and monopolies in fields as disparate as manufacturing matches, refining and selling sugar, and building railroad cars.

By the late 19th century the situation had become so intolerable that Congress put into place the first anti-trust laws.

Before the Reagan Revolution, those anti-trust and anti-monopoly laws — dating all the way back to the Sherman Anti-Trust Act of 1890 — were largely enforced and kept big corporations in check.

The Federal Trade Commission (FTC) was created in 1915 by Democratic President Woodrow Wilson, specifically to break up concentrated business trusts and monopolies, using the Justice Department as its prosecutorial arm. It came into being against a backdrop of public outrage over giant corporations screwing consumers and owning captive politicians.

As President Teddy Roosevelt, the great trust buster, said a decade earlier, “There can be no effective control of corporations while their political activity remains.” Indeed, it took a decade to create the agency that Roosevelt had proposed, as I detail in The Hidden History of Monopolies: How Big Business Destroyed the American Dream.

Probably the FTC’s most well-known effort was breaking up the telephone behemoth AT&T, an action started during the Nixon administration that, when completed in 1982, produced an explosion of competitive activity that dropped phone call costs, increased availability, and spurred the creation of hundreds of new companies in the telecom arena.

Even the Supreme Court, back in the day, agreed that giant corporations dominating markets was bad for the economy and our political system.

In the 1962 antitrust case of Brown Shoe Co. v. United States, for example, the Supreme Court agreed with the FTC and blocked the merger of Brown and G. R. Kinney, two shoe manufacturers, because the combination of the two would have captured about 5% of the US shoe market.[clxx] For comparison, Nike today has 19% of the US shoe market.[clxxi]

All of that anti-trust activity came to an end in 1982 when President Reagan appointed William C. Miller III, his former executive director of the Presidential Task Force on Regulatory Relief, to take over the FTC. Miller was the first pro-corporate leader in the nation’s history to corrupt the agency that was supposed to regulate corporate misbehavior.[clxxii]

That year (as it had been since the 1930s) most of this nation’s business activity was centered in the cash registers of our small- and medium-sized companies. The total value of America’s largest corporations — those listed on stock exchanges — was equal to just 39.4% of the entire nation’s economic activity or GDP in 1981.[clxxiii]

Miller, however, declined to continue enforcing our anti-trust laws and in 1983 Reagan instructed the DOJ to, essentially, stop prosecuting companies that were violating those laws through mergers and acquisitions, and to only go after the most egregious and flagrant acts of corporate collusion and price-fixing.[clxxiv]

As a result, large companies became behemoths, and pretty much every industry in America is today dominated by a small handful of companies that carefully monitor each other to function, essentially, as cartels. When United raises ticket prices by $50, for example, American does the same three hours later.

Which is why today the total value of America’s exchange-listed corporations is 194.9% of GDP, elbowing out most small- and medium-sized companies.

As Jonathan Tepper pointed out in The Myth of Capitalism, fully 90% of the beer that Americans drink is controlled by two companies.[clxxv] Air travel is mostly controlled by four companies, and over half of the nation’s banking is done by five banks.

In multiple states there are only one or two health insurance companies, high-speed internet is in a near-monopoly state virtually everywhere in America (75% of us can “choose” only one company), and three companies control around three-quarters of the entire pesticide and seed markets.

The vast majority of radio and TV stations in the country are owned by a small handful of companies, and the internet is dominated by Google, Facebook, and Amazon.

This has handed enormous power to the CEOs and senior managers of America’s largest companies, all of them multi-multi-millionaires and many billionaires. And none of them like competition from small companies like the ones I started throughout my life and American entrepreneurs today are doing their best to launch in the face of overwhelming odds when confronting one of these American behemoths.

If we want to bring back entrepreneurship to America, we must first restore our anti-trust laws to their former power.