Revenge of the Antitrustians
It's been said that a small but determined group of anti-American religious fanatics who "hate us for our freedom" pose a mortal danger to the nation. I actually agree with that premise — but the religious fanatics that concern me don't pray to Allah or live in the Middle East. They're mostly lawyers who occupy a large office building on Washington's Pennsylvania Avenue, not too far from the White House. The sympathetic press refers to these fanatics as the "Federal Trade Commission".
Last week, the FTC's leadership, joined by their fanatic colleagues at the Justice Department's Antitrust Division, attended an international antitrust conference hosted by that noted champion of free speech and free markets, Russian dictator Vladimir Putin. Upon returning to the states, the FTC celebrated the spirit of Putin's economic authoritarianism by announcing a legal challenge to Whole Foods Market's acquisition of Wild Oats Markets. In a statement worthy of Venezuelan socialist Hugo Chavez—another ally of the FTC—the Commission said the proposed merger would harm consumers in the market for "premium natural and economic supermarkets," and the full force of U.S. law had to put a stop to such madness:
"Whole Foods and Wild Oats are each other's closest competitors in premium natural and organic supermarkets, and are engaged in intense head-to-head competition in markets across the country," said Jeffrey Schmidt, Director of the FTC's Bureau of Competition. "If Whole Foods is allowed to devour Wild Oats, it will mean higher prices, reduced quality, and fewer choices for consumers. That is a deal consumers should not be required to swallow."
I could offer an economic critique of Schmidt's argument, but that would be pointless. There is no economic content to refute, and it's a mistake to pretend otherwise. As I said in my open, we're dealing with religious fanatics here, not misguided economists.
In studying the FTC's work over the past five years, I've come to realize that while many pursue a career in antitrust to leech off the financial achievements of others—we used to call such people "welfare queens"—there is a strong core of antitrust regulators who are simply engaged in violence for its own sake. They are sociopaths motivated by a false sense of self-righteousness, and my guess is that many would pursue their work even if it didn't pay a cent.
Let's take Jeffrey Schmidt, the FTC's top antitrust cop. The statement he issued regarding Whole Foods is identical to the ones he's made in countless other merger review cases. In every such case, without exception, he is absolutely certain that he knows what is best for the marketplace and its consumers. It doesn't matter what the market is — supermarkets, software, jet engine parts — he's an expert in everything. There is absolutely no limit to the FTC's ability to project the future.
Having established his infallibility, Schmidt then proposes to commit a violent act in full public view with the sanction of the courts. He is going to take away the rights of Whole Foods and Wild Oats' shareholders. Schmidt, not them, will decide how to disribute the companies' property. If the companies' executives do not agree to this act of theft, they will have their own property—or liberty—confiscated, again in full public view with the sanction of the courts.
Now, Schmidt and his fellow fanatics will maintain that their violent crimes are really noble acts of self-defense — they are protecting "consumers" from being deprived of the "benefits of competition" by two antisocial grocers. Yet if you've ever read an FTC merger challenge, you'd know that "consumers" are, to borrow a Randian phrase, a floating abstraction. There are no individual consumers to speak of. "Consumers" exist merely as a number in some formula or a line on a graph. They have no substance or reality. They're the equivalent of the voice a serial killer might here ordering him to commit murder.
In fact, real consumers are the source of Schmidt's rage. Real consumers don't behave according to FTC-approved models, and that makes Schmidt very, very angry. In antitrust mythology, a merger is "anticompetitive" because should the combined firms raise prices or "reduce innovation"—there's a lot of mumbo jumbo to sort through—new entrants won't enter the market quickly enough to restore the competition lost through the merger. Thus intervention is necessary to maintain the status quo.
What a load. The real problem here is that consumers won't change their behavior merely because the regulators want them too, and sociopaths like Schmidt can't stand it.
The larger point, as noted above, is that antitrust has transcended mere regulation and become a small but potent religious cult. There are indecipherable holy texts (the Sherman Act and its descendants) a revisionist mythology that traces all economic achievement to the passage of the antitrust laws, a gathering of revered clerics in the FTC and DOJ, and most importantly, a strong belief in the use of violence against non-believers and heretics. But unlike most religious cults, the Antitrustians enjoy mainstream support and government sanction. God help their victims.