Last night, in an interview with CBS’s “60 Minutes,” Former Federal Reserve Chairman Alan Greenspan said that on his first date with Andrea Mitchell, now his wife, they went back to his place, where he showed her an essay he had written on antitrust. This is probably the essay.
“Anti-Trust: Rule of Unreason” was written while Greenspan was a part of novelist-philosopher Ayn Rand’s “collective.” It appeared in her mid-’60s book Capitalism: The Unknown Ideal.
In the essay, Greenspan makes the case for wholesale repeal of antitrust law. Almost all of the passages are still relevant in light of recent controversies such as the recent Whole Foods-Wild Oats merger. There is an especially powerful passage in the essay that essentially says that we will never know how many innovations have been killed — how many improvements to our lives did not come to pass — by preventing the free collaboration of firms to make better products and services.
Greenspan also makes the distinction between business combinations in the free market and firms that become monopolies because the are given specific government protection. Like some railroads in the late 19th century and the post office today.
In light of troubled firms and the credit crunch, on which much of the “60 Minutes” interview focused, there is another issue involving antitrust. It would be a lot easier for firms to combine to buy troubled companies — saving the companies’ shareholders, employees, and borrowers from the fallout of a devastating bankruptcy — if the firms that pooled assets for the buyout didn’t have to worry about the government coming at them with potential antitrust violations.