… is from page 150 of the original edition of Gerald P. O’Driscoll’s and Mario J. Rizzo’s important 1985 book, The Economics of Time & Ignorance:
Competitive firms have no property rights or titles to a market share, and certainly none to profits. In a market with free entry and no restrictions on competitive practices (e.g., no advertising bans), past market shares yield no ex ante guarantee of future market performance. Observed market shares are ex post outcomes. Absent a secure property right, they tell us little about future market shares.
DBx: Yes.
Protectionism and efforts to abolish the consumer-welfare standard in antitrust law are two means of attempting to create unjust property rights – that is, property rights in market share, or sellers’ property rights in that part of consumers’ incomes that in the past was spent on the outputs of existing producers. To the extent that such ‘property rights’ are created and enforced, other property rights are necessarily destroyed or attenuated – including the right of each of us as producers to use our minds, tools, and good reputation to compete for consumer patronage, as well as the right of us as consumers to spend our incomes in whatever peaceful ways we choose.
