Time To Repeal Antitrust
Dominick Armentano, author of Antitrust and Monopoly: Anatomy of a Policy Failure, is a leading antitrust theorist of the Austrian School. His main theoretical and political arguments are beautifully summarized in the newly issued Antitrust: The Case for Repeal. This new edition addresses the main antitrust controversies of our time, preeminently the Microsoft case, but also that of Staples, Intel, and Toys "R" Us.
His main conclusion departs radically from mainstream opinion: in order to gain the benefits of free-market efficiency, he says, all antitrust legislation must be repealed. He makes the case on economic grounds but also on political reality. So long as the regulations continue to exist, they will work as an infringement on market coordination and on free enterprise.
From the Preface:
The flurry of federal and state antitrust activity against firms such as Toys "R" Us, Staples, Intel, and Microsoft may signal the beginning of an unfortunate new era in enforcement. Antitrust regulation, like a relentless Terminator, is back in business and the economic havoc it threatens is considerable.
My position on antitrust has never been ambiguous: All of the antitrust laws and all of the enforcement agency authority should be summarily repealed. The antitrust apparatus cannot be reformed; it must be abolished.
It is said that much is risked in calling for repeal. Any call for repeal is likely to galvanize those interests committed to a return to the old-style, traditional enforcement policies. In addition, the antitrust "establishment"–attorneys, consultants, antitrust agency bureaucrats–would probably step up its attack on those who intend, from its perspective, to further "weaken" antiturst policy. Abolitionists would again be portrayed as pro-business and anti-consumer, devoid of any concern for consumer welfare or economic fairness. The most serious danger, presumably would be that a principled opposition to all antitrust could delay important antitrust reforms or even reverse some of the slight administrative reforms already achieved.
Similarly, any serious movement to repeal is said to run the risk of alienating the support of those critics of traditional policy most responsible for the modest antitrust reforms that we have seen to date. The majority of important antitrust critics do not support the repeal of antitrust laws; in their view, there is an appropriate role for antitrust policy in a free-market economy, although one that is reduced in scope from the traditional understanding. They would argue that antitrust is still necessary for combating cartels, very large horizontal mergers, and bona fide predatory practices.
I emphatically disagree. There certainly are risks in working for repeal, but there are even greater risks in not pushing the intellectual argument against antitrust to its logical conclusion. I will argue that the case against antitrust regulation–any antitrust regulation–is far stronger than even its most important critics are willing to acknowledge.
I will argue that the employment of antitrust, even against private horizontal agreements, cannot be justified by any respectable general theory or empirical evidence. But even more practically, I will argue that he very modest administrative reforms that we have seen can only be temporary. There were, after all, only administrative reforms, and we have already fallen back into the quagmire of more traditional enforcement policies.
The greater risk would be to remain content with some modest "reform" agenda while leaving the entire enforcement, and court review, essentially in place. It would be far better in an entirely practical sense to abolish all of these institutional arrangements and simply be done with the greater risk.