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Government Proposes in Effect to Put Itself in Charge of Apple Pricing

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08/03/2013

This is yet another illustration of why the US economy is in such deep trouble.

A federal judge found that Apple had violated anti-trust laws in its e-book arrangements with publishers. This was actually an attempt by publishers to regain control over their e-book pricing from retailers, Amazon in particular, and ended when publishers signed consent decrees with the government. This should be the end of the story but instead the government now wants to appoint a monitor who will review all Apple pricing for the next ten years.

What is not generally realized is that most government economic policies amount to price interference, manipulations, and controls. No economy can thrive without an honest and unmanipulated price system, as the Soviet Union demonstrated so vividly by collapsing. Yet we are at a moment in which our government wants to control more and more prices throughout the economy, now even wanting to control a leading technology company’s prices for a decade.

The government attempt to control more and more prices also feeds crony capitalism, because private interests whose prices will be controlled respond by trying to influence and if possible buy government officials. It would be surprising if Apple did not increase its presence in Washington considerably from now on.

The government anti-trust case against IBM marked the end of that company as a technology power house. In retrospect it was the moment to sell the company’s shares. But even then the government did not propose to insert a price “monitor” inside the company for a decade.

Hunter Lewis is author of eleven books, including Economics in Three Lessons & One Hundred Economic Laws, Where Keynes Went Wrong, and Crony Capitalism in America 2008-2012, and has contributed to the New York Times, the Washington Post, the Times of London, The Atlantic and many other magazines and web sites including Mises.org and LewRockwell.com. Lewis is also co-founder of Against Crony Capitalism.org as well as co-founder and former CEO of Cambridge Associates, a global investment firm. He has served on boards and committees of fifteen not-for-profit organizations, including environmental, teaching, research, and cultural organizations, as well as the World Bank.

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