Anti-Antitrust

by Don Boudreaux on June 3, 2022

in Antitrust, Competition, Crony Capitalism, History, Myths and Fallacies

Here’s a note to a first-time correspondent:

Mr. F__:

Thanks for your e-mail.

You “unconditionally disagree” with the opposition to antitrust that I express in my quoted remarks in Emily Washburn’s recent Discourse essay. In your view, “Google and other Big Tech giants are so giant that we do not have the time to wait on free market influences to discipline them.”

I stand by my argument. History is full of worries that ‘dominant’ firms du jour will remain dominant until and unless they are attacked with the weapons of antitrust. What history is not full of – indeed, what can scarcely be found – is evidence that these worries are justified.*

History, by the way, is also full of evidence that antitrust authorities routinely act to diminish competition in markets.** Deputizing antitrust authorities to police markets against monopoly power is like deputizing the Ku Klux Klan to police markets against racial discrimination. The only germane difference separating the two cases is that the KKK at least is forthright about its goals.

You assert that “the sheer size of these businesses makes them invulnerable to competition.” Again, such assertions have been heard repeatedly throughout the past 150 years with very little convincing evidence ever being mustered in support. One reason the actual record is unkind to such assertions is this: The larger is the firm and its market share, the greater are the rewards for entrepreneurs who successfully compete against it. A firm’s unusually large size and market share spark in competitors unusually intense creativity and determination. As long as entry and exit in industries is open to all willing entrepreneurs, only by continuing to please consumers better than rivals will firms that are large and profitable today be firms that are large and profitable tomorrow.

And so to answer your final question: Not only do I believe that antitrust is unnecessary to keep markets competitive, I’m quite sure that insofar as antitrust is used, the net result is reduced competition and innovation. I would, if I could, abolish antitrust immediately and completely.

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

* See Dominick Armentano, Antitrust and Monopoly 2nd ed. (Oakland, CA: Independent Institute, 1996), and Donald J. Boudreaux and Burton W. Folsom, “Microsoft and Standard Oil: Radical Lessons for Antitrust Reform,” Antitrust Bulletin, Fall 1999.

** See Robert H. Bork, The Antitrust Paradox 2nd ed. (New York: Free Press, 1993), and Fred S. McChesney and William F. Shughart II, eds., The Causes and Consequences of Antitrust (Chicago: University of Chicago Press, 1995).

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