Monday, October 8, 2007
Posted by D. Daniel Sokol
This is not another post on my thoughts on Yom Kipur. Instead, I want to bring attention to a new book by Edwin Rockefeller has published The Antitrust Religion by CATO. The book blurb reads:
Many successful American businesses have been accused of anti-competitive practices. Drawing on 50 years of experience with U.S. antitrust laws, attorney and author Edwin S. Rockefeller sheds light on why lawmakers, bureaucrats, academics, and journalists use arbitrary and irrational laws and enforcement mechanisms to punish capitalists rather than promote competition. The Antitrust Religion argues that everything most people know about antitrust is wrong.
The orthodox view is that antitrust was created to protect competition. But Rockefeller’s account is strikingly different. He argues that antitrust in practice has often benefited, not the public, but specific businesses that wanted to take down their competitors. In cases ranging from early antitrust targets like Standard Oil to the more recent IBM and Microsoft cases, he reveals why some companies are punished for being winners in the market.
Rockefeller vividly shows how antitrust has been transformed into a quasi-religious faith. He explains that this “antitrust religion” relies on economic theories that bestow a veneer of objectivity and credibility on law enforcement practices that actually rely on hunch and whim. On issues such as mergers and price fixing, Rockefeller thoroughly examines arbitrary antitrust laws that lead to ill-informed juries and bureaucratic abuse. He concludes that those laws also create a perverse incentive for entrepreneurs to hold down sales volume and avoid improvements in price, quality, and service. Otherwise, such entrepreneurs could become the next targets of the antitrust priests.