Concerned about a growing number of antitrust cases instigated by rival business firms, 240 distinguished economists signed an open letter that called for an end to speculative antitrust enforcement efforts. The ad, sponsored by The Independent Institute, appeared in the June 2, 1999, editions of The Washington Post and The New York Times.
The ad was prompted by the recent spate of antitrust actions against such companies as Intel, Microsoft, and Visa and MasterCard.
As the Open Letter notes, Consumers of high technology have enjoyed falling prices, expanding outputs, and a breathtaking array of new products and innovations. High technology markets are among the most dynamic and competitive in the world, and it is a tribute to open markets and entrepreneurial genius that American firms lead in so many of these industries. But, these same developments place heavy pressures on rival businesses, which must keep pace or lose their competitive races. Rivals can legitimately respond by improving their own products or by lowering prices. Increasingly, however, some firms have sought to handicap their rivals races by turning to the government for protection. The letter points out that such antitrust efforts, based upon speculative rather than actual harm to consumers, short circuit market forces and replace consumer choices with bureaucratic and political decisions. The results of this, the letter noted, include weakened U.S. firms and reduced international competitiveness.
For background information about antitrust enforcement and its impact on consumers, consult these books:
WINNERS, LOSERS & MICROSOFT: Competition and Antitrust in High Technology by Stan J. Liebowitz and Stephen E. Margolis
ANTITRUST AND MONOPOLY: Anatomy of a Policy Failure by D. T. Armentano
The following articles from The Independent Review discuss various aspects of antitrust policies and their economic impact.
Is Microsoft a Monopolist? by Richard B. Mckenzie and William F. Shughart II
Antitrust and the Commons: Cooperation or Collusion? by Bruce Yandle
Rent-Seeking Never Stops: An Essay on Telecommunications Policy by James Montayne
A review of Paul MacAvoys book, The Failure of Antitrust and Regulation in Telephone Service, reviewed by James Montayne
|David J. Theroux is the Founder, President and Chief Executive Officer of the Independent Institute and Publisher of The Independent Review: A Journal of Political Economy.|