Here’s a letter to the Wall Street Journal:
Editor:
Robert Atkinson rightly warns against vigorous use of antitrust (“Antitrust Can Hurt U.S. Competitiveness,” July 6). Such enforcement removes responsibility for business decision-making from persons possessing both on-the-spot knowledge of relevant commercial details and incentives to use that knowledge productively, and places this responsibility in the hands of persons possessing neither. Judge Frank Easterbrook’s assessment from decades ago remains relevant today:
If judges had the data, we would not trust them to make good decisions. The business world relies on financial incentives to encourage managers to make the best use of knowledge and to weed out those who, despite their best efforts, cannot do as well as others. Judges do not profit from making astute business decisions and are not let go for making bad ones…. To the extent judges make economic decisions in antitrust cases, they are making predictions about tomorrow’s effects of today’s practices. This is problematic under the best of circumstances. Economists start from existing practices and try to explain why they exist and survive. Even when all agree about the effects so far, they disagree about impending effects under changed conditions. Experts will take diametrically opposed positions.*
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* Frank H. Easterbrook, “Ignorance and Antitrust,” in Thomas M. Jorde and David J. Teece, eds., Antitrust, Innovation, and Competitiveness (New York: Oxford University Press, 1992). The quotation appears on pages 120-121.
