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Quotation of the Day…

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… is from page 415 of University of Connecticut economist Richard Langlois’s important new article “Hunting the Big Five: Twenty-First Century Antitrust in Historical Perspective [2],” which appears in the Winter 2019 (Vol. 23) issue of The Independent Review (references and footnote deleted):

Then as now, antitrust offered symbolic reassurance to a diffuse constituency fearful of developments they didn’t understand and couldn’t control. But there were also more concrete interests at play: independent businesses harmed by more-efficient large competitors. Typical of these independent businesses were small refiners threatened by Standard Oil’s policy of translating refining and shipping efficiencies into lower prices and local slaughterhouses that had to compete with the highly efficient new system of refrigerated dressed meat.

DBx: This reality never changes: existing producers do not like competition. Greedily wishing to have customers who are as captive as possible, existing producers plead with the state to protect them from competition – which means to have the state threaten to use violence to reduce the options available to consumers.

Tariffs and antitrust are brilliant strategies to this end of using the state to create monopoly power. Tariffs are successfully marketed to the general public as exactions only on foreigners – foreigners who are falsely portrayed as inflicting harm on fellow citizens by offering to sell their outputs to fellow citizens at low prices that domestic producers would prefer not to have to meet. “Tariffs protect jobs, wages, and domestic industry from the damage done to us by foreigners!” falsely assert proponents of tariffs and other restrictions on imports.

Antitrust is an even more brilliant marketing scheme for creating monopoly power. It does so by protecting political influential producer groups from new and unfamiliar forms of producing and delivering goods and services. Antitrust, contrary to its reality, is cynically portrayed as a government policy meant to destroy monopoly power. “Antitrust protects us from big firms that now – or, be assured, that will soon begin to – charge consumers excessively high prices!” falsely assert proponents of antitrust.

The title of William Wooldridge’s book from the 1960s – Uncle Sam, the Monopoly Man [3] – is accurate.

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Pictured above is Sen. John Sherman (R-OH) who, as is known by anyone familiar with the history of the antitrust statute that bears his name, was no friend of consumers or of genuine market competition. He supported high tariffs and saw the opportunity to slap his name onto an antitrust statute as a means of fooling voters into thinking that he in fact – but contrary to fact – was opposed to government efforts to create monopoly power.

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