Quotation of the Day…

Tweet

… is from page 85 of University of Connecticut economist Richard Langlois’s monumental 2023 study, The Corporation and the Twentieth Century (original emphasis; footnotes deleted; links added):

The laissez-faire economists [around the turn of the 20th century], and often even their opponents, did not think in terms of an efficient equilibrium of prices, quantities, and number of firms; rather, following Adam Smith, they had a dynamic view of competition as active striving. Active competition took place along many margins, including both innovation and entry. The result of active competition would be not an efficient allocation of resources at any moment in time but rather a dynamic process of economic growth. They key to a healthy economy was thus freedom of contract, which meant both freedom from legal restraint, especially restraint on entry, and the freedom to engage in innovative economic arrangements. In the formulation of the day, this could be assured if there was potential competition – if the door were left open for others to enter markets and to innovate along technological, organizational, and even contractual dimensions.

DBx: On this date (July 2nd) in 1890, President Benjamin Harrison signed the Sherman Antitrust Act. This legislation has often been used by a coalition of three groups to dampen economic competition, these three groups being (1) rent-seekers, (2) social engineers, and (3) the economically ill-informed.

Three months after signing the Sherman Act, Pres. Harrison signed the McKinley Tariff (the latter of which was strongly supported also by Sen. John Sherman) – a fact that is, to put it mildly, difficult to square with the oft-made assertion that the intent of the government officials who enacted the Sherman Act was to ensure that consumers enjoyed as many as possible of the fruits of economic competition.