Mythical Roots of Antitrust: Definition Unnecessary

by | Jul 16, 2000

The antitrust laws and their enforcement are every bit as arbitrary as the “perfect competition” doctrine. Consider only those provisions relating to price setting. If a business sets a price above the prices of its rivals, it can be charged with “intent to monopolize.” If it sets a price below those of rivals, it can […]

The antitrust laws and their enforcement are every bit as arbitrary as the “perfect competition” doctrine. Consider only those provisions relating to price setting. If a business sets a price above the prices of its rivals, it can be charged with “intent to monopolize.” If it sets a price below those of rivals, it can be charged with “predatory pricing” or “unfair competition” or “restraint of trade.” If it charges a price similar to those of rivals, it can be charged with “collusion” and forming a “conspiracy to fix prices.”

In short, the minute anyone goes into business, whatever price policy they adopt, they violate the antitrust laws. They’re guilty for being in business as such. They’re presumed guilty until proven innocent–a direct perversion of proper justice. Does this mean every enterprise is prosecuted under the antitrust laws? No. But the wide discretion and limitless capacity to attack anyone, anywhere, at anytime, gives the trustbusters unlimited, totalitarian power. What, then, is the standard or signal justifying prosecutorial action? The trustbusters target firms that it deems, subjectively, to have “excessive” economic power, or profits, or market share. They seek out and persecute the most visible “imperfections” in the market–that is, they seek out and attack the biggest, the most distinct, most successful, most profitable, most widely advertised and most frequently patronized firms.

There are other elements of antitrust law which codify altruist and egalitarian theories of perfection and sabotage business freedom. There is the “essential services” doctrine which says a product or service that becomes widely used and relied upon loses its private character and effectively becomes public property, to be shared with rivals and the government. The exercise of one’s property rights and the successful creation and distribution of a product causes one to lose those rights, to be robbed of the product of one’s creative efforts. This doctrine penalizes success for being success. That’s an injustice.

Another example of the arbitrariness of antitrust laws is the way trustbusters define a firm’s “market share.” Microsoft has, perhaps 5% of the worldwide software market. But it has, say, 25% of the U.S. software market. Or 50% of the PC-based software market. Or 80% of the software for Intel-chip based PC’s. Well, does Microsoft not have 100% of the market share of software emanating from its Redmond campus? The trustbusters can define “market share” however they wish, so as to maximize convictions.

The assumption behind market share analysis is that markets are fixed things, grabbed at by competitors. But, in fact, markets are made possible by and expanded by the producers. Has it been forgotten that Microsoft created the products that made the market in question possible? Has it been forgotten that Microsoft owns the goods it produces? The right to private property means the right to hold it, to alter it, to exchange it–that is, to control it. Is a firm guilty of controlling its own property? It is under antitrust. To prosecute a firm for the right to it’s own property is to obliterate the right to property as such. To allow others to vandalize property is an outrage. This is not justice. On the contrary, it’s an injustice.

The trustbusters also oppose what it calls “restrictive” and “exclusionary” contracts.” But all contracts are restrictive and exclusionary in one way or another. You contract with one party and not another and do so on particular terms and not others, at a particular price and time period and not others. Thus, to oppose “restrictive contracts” is to oppose contracts per se. And to oppose contracts is to oppose rational, voluntary exchange per se. To oppose voluntary exchange is to oppose liberty per se. When the Justice Department of the United States actively subverts contracts, voluntary exchange and liberty, it’s no longer a department of justice but a dungeon of hellish injustice where liberty is repeatedly crucified because it is liberty. Government should uphold and enforce market contracts–not violate freedom of contract by dictating the terms, changing the terms, or abrogating the terms of voluntary contracts.

I’ve not even mentioned the array of other antitrust provisions that violate simple justice. There are the retroactive elements–definitions of wrong-doing that are so murky, firms can’t possibly know in advance what they might become charged with, what they may be guilty of, when, or for what reason. That’s called retroactive law–or ex post facto law–and it’s explicitly forbidden by the US Constitution.

Add to this the fact that most antitrust cases are decided by precedent–not what’s written in the law itself, but what thousands of judges have written in thousands of antitrust case spanning an entire century. And it gets worse every year. Now business engages in what’s known as “self-regulation.” To avoid prosecution, they purposely resist creating new products, or extending their market presence, or merging with others, in order to appease trustbusters. Self-regulation is the hallmark of a dictatorship.

The fact is, the rights of criminals are better protected than those of businessmen under antitrust law. We have reached this point because profit-seeking itself has come to be viewed as evil and criminal.

If we care about individual rights, about private property rights and about justice, we should abolish the antirust laws. These laws are anti-success, anti-American and unconstitutional. They are an abomination. They are morally obscene. They are a travesty of justice. That’s why we I strongly recommend that economists, lawyers, and businessmen–indeed, every citizen–fight aggressively against the very existence of the antitrust laws–not simply their particular application in specific cases. Justice demands it.

Related Articles:

  • Why Can’t the media see the injustice done by Reno’s DOJ to Microsoft: The Three Myths of Antitrust, Part 1
  • Economic Power vs. Political Power: The Three Myths of Antitrust, Part 2
  • Perfect Competition: The Three Myths of Antitrust, Part 3
  • Arbitrary Law: The Three Myths of Antitrust, Part 4

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    Dr. Salsman is president of InterMarket Forecasting, Inc., an assistant professor of political economy at Duke University and a senior fellow at the American Institute for Economic Research. Previously he was an economist at Wainwright Economics, Inc. and a banker at the Bank of New York and Citibank. Dr. Salsman has authored three books: Breaking the Banks: Central Banking Problems and Free Banking Solutions (AIER, 1990), Gold and Liberty (AIER, 1995), and The Political Economy of Public Debt: Three Centuries of Theory and Evidence (Edward Elgar Publishing, 2017). In 2021 his fourth book – Where Have all the Capitalist Gone? – will be published by the American Institute for Economic Research. He is also author of a dozen chapters and scores of articles. His work has appeared in the Georgetown Journal of Law and Public Policy, Reason Papers, the Wall Street Journal, the New York Times, Forbes, the Economist, the Financial Post, the Intellectual Activist, and The Objective Standard. Dr. Salsman earned his B.A. in economics from Bowdoin College (1981), his M.A. in economics from New York University (1988), and his Ph.D. in political economy from Duke University (2012). His personal website is richardsalsman.com.

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