Antitrust: America’s Unfortunate Export
Scholars, journalists, bureaucrats and lawmakers persist in viewing the body of antitrust law as serving the public interest. They still believe in monopolies apart from the ones governments deliberately create.
New reports show that the remedy imposed upon Microsoft by European authorities to force it to cough up Internet browser market share show questionable results so many years after Explorer’s heyday. The rise of competitors like Firefox and Chrome likely would likely have occurred regardless, and the dominance of the PC is somewhat less of a concern anyway in today’s mobile wireless and iPadded world.
A better question is why we tolerate governments—larger than any company they regulate—interfering so blatantly in competitive enterprise, denying consumers the superior market responses to the “monopolistic” behavior they claim to be addressing. When governments intervene, “competitors” get to relax. They don’t necessarily have to hustle quite as much anymore.
Antitrust might more fruitfully be characterized as a form of corporate welfare, more hurtful than helpful to its alleged consumer beneficiaries. But it’s great for rivals.
Antitrust’s track record conforms to an interpretation that it serves largely as a tool by which certain businesses hobble their more adept rivals via political and judicial means rather than in the marketplace. Such manipulation yields increased prices and decreased output — hardly the consumer friendly outcome allegedly sought by intervention.
Honest reforms would deny standing to competitors in certain instances, but that would defeat the purpose of antitrust. In any event, sympathy for increased international antitrust administrative power in the global age is not a recipe for reducing the influence of monopoly –- it is the opposite. Only political power — governmental restriction of entry -– keeps competitors out of profitable markets. Antitrust boosters conflate the distinction between economic power gained through voluntary trade, and power secured by having government outlaw competition.
Of course, any company is a technical violator of antitrust and a potential target for opportunists; that’s what makes antitrust so attractive. Whether one’s prices are higher, lower or the same as everyone else’s, it can be construed to signify “monopoly” power. There’s no such thing as innocence to antitrust, once you become prominent and a target. In the wake of Microsoft’s ordeal, now we get to watch firms like Google, Intel and IBM squirm. This is silly and destructive to economic recovery.
Would-be reformers must go beyond merely criticizing antitrust on grounds of efficiency and logic, and denounce its moral legitimacy as well as limiting competitors’ standing. Defenses of antitrust ultimately rest on the unstated but collectivist notion that firms’ output somehow belongs to the “public,” not to the producers that created it. Thus, voluntary trades that don’t deploy the “public’s” property so as to maximize the antitrust bureaucracy’s prevailing conception of social welfare are objectionable.
Such statist policy is hardly appropriate to any ambitious society seeking economic growth today.
Enshrining individual rights and wealth creation rather than forced “redistribution” of producer markets is elementary as far as sound public policy is concerned. Aspiring shareholders of a smart and productive corporation have a right to not have government then attack that corporation for the very superiority over rivals that induced them to become shareholders in the first place. Antitrust undermines the wonderful but unsung democratizing forces of capitalism.
Reconsideration of antitrust’s role in the 21st century is overdue. Today’s unquestioned expansion of the law to the global sphere makes it clear that antitrust has been one of America’s most unfortunate exports.