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Here’s a letter to the Wall Street Journal:
Editor:
Robert Bork, Jr., wisely warns against siccing the dogs of antitrust on “Big Tech” firms (Letters [2], June 24). The smarter course is to rely on competitive market processes over time either to compel today’s firms to better serve consumers or to replace these firms with new rivals who will.
Many will protest that Big Tech is immune to competition. But such protests display ignorance of economic history. For nearly 150 years Americans have heard countless warnings that this firm and that industry are impervious to market competition, only to discover that, save for firms protected by government from competition, each such alleged “monopolist” soon lost significant market share to entrepreneurial rivals.
As my emeritus Nobel-laureate colleague, Vernon Smith, put the matter to me in an e-mail [3] last year:
How do they [those who allege that the U.S. is in the grips of Big Tech monopolists] explain the fact that Amazon (also EBAY, GOOGLE, FB et al.) are all relatively new firms? They were survivors of the huge creation of new firms in the 1990s and the dotcom crash in 2000-1.
Everything they say about Amazon was being said about IBM in the 1970s-80s. No one could dislodge them from the monopoly power of their operating system; all their clients were locked in. Then came Microsoft that beat ’em fair and square. In the 80s IBM barely survived bankruptcy.
Ask them to list the five top firms, every 10 years, starting in 1950. Their model cannot predict the turnover.
The turnover was, and remains, tremendous [4]. Creative destruction is real. A return to mid-20th-century antitrust enforcement will severely hamstring this healthy competitive process.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030