Here's a letter that I sent to the Washington Post:
Seeking more active
application of antitrust regulations, Steven Pearlstein wants the
Supreme Court to reject "the view of Chicago school economists" – a
view in which, according to Mr. Pearlstein, "monopolies are actually
good for consumers because they attract the money and talent necessary
for innovation" ("Can Obama Bring Back the Trust Busters?" May 17).
application of antitrust regulations, Steven Pearlstein wants the
Supreme Court to reject "the view of Chicago school economists" – a
view in which, according to Mr. Pearlstein, "monopolies are actually
good for consumers because they attract the money and talent necessary
for innovation" ("Can Obama Bring Back the Trust Busters?" May 17).
Mr.
Pearlstein seriously misunderstands Chicago-school economics. Those
economists do not believe that "monopolies are actually good for
consumers." Quite the contrary. What the researches of these
economists do reveal, instead, is this: First, competition is so robust
that it is seldom, if ever, squelched by firms who do not enjoy special
government privileges; second, being big and/or extra-efficient does
not make a firm a monopolist; and third, antitrust statutes themselves
have often been used to restrain competition.
It's disappointing that Mr. Pearlstein's understanding of both Chicago-school economics and of antitrust is so superficial.
Sincerely,
Donald J. Boudreaux
