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Commentary

An Open Letter to George W. Bush on Antitrust Policy


     
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Dear Governor Bush:

Now that the Feds have indicated their intention to bust up the premium software firm on the planet, it’s time you took a firm stand on this issue. Do you agree with Judge Thomas Penfield Jackson, the Department of Justice, with Janet Reno, with Joel Klein, with the 17 state attorneys general and, apparently, with Al Gore, that Microsoft represents a serious threat to consumer welfare and must be mutilated by federal decree? Or do you stand for the unbridled right of individuals through incorporation to engage in voluntary trade, to freely innovate and improve their products, and to succeed at great risk? It’s either one or the other, George, so which will it be?

Like many Americans you have probably been led to believe that antitrust enforcement is pro-consumer. After all, that’s what the statist economists, hired-gun law professors, and other antitrust apologists constantly assert. Welcome to the real world. Business history demonstrates that antitrust routinely attacks successful firms that innovate rapidly and lower prices; and that is blatantly anti-consumer. Stripped of all whitewash, antitrust is government regulation at the behest of special interests that desire a redistribution of wealth. And it doesn’t take a rocket scientist to determine that a nation cannot prosper and grow rich when governments pursue and dismember the wealth creators.

You will probably argue that it is politically improper to express an opinion before an antitrust case is legally resolved. Nonsense for two reasons. First, the entire process is political anyway; you will not be mudding any clean water. Recall that the Justice Department first became involved in Microsoft’s conduct in 1993 at the expressed urging of Senators Howard Metzenbaum and Orrin Hatch. Recall further that Microsoft’s many competitors, led by Netscape, have led a constant political drumbeat for harsh judicial remedies in this case. Finally, can anything be more politically obvious than the policy extremism and arrogant ambition of the state attorney generals involved in the Microsoft case? Since I assume that you intend to play D.C. political hardball, now is a good chance to warm up.

The other reason to get involved now is that you should not want any Clinton economic hangover restricting economic growth in your administration. The Microsoft finding and remedy will have economic implications that will effect the entire future of the computer and telecommunications industries. Moreover, bad antitrust decisions linger for years on appeal and the economic uncertainty is generally destabilizing as we have already seen. Microsoft has already taken the first courageous step by indicating its willingness to appeal Judge Jackson’s decision. This should easily push matters into the next administration. Now you should take the next step and indicate that in the any Bush administration you will appoint an Attorney General who will likely abandon this lawsuit.

Early in President Reagan’s first term, Assistant Attorney General William Baxter withdrew the Feds from the silly antitrust suit against IBM. He characterized the 13-year government harassment of the company as legally "without merit" and the case was abandoned. And contrary to critics, the world didn’t end in monopoly and high prices. Indeed, the hardware and software industry exploded in unprecedented growth ushering in the personal computer revolution. Microsoft is in a similar position today and requires someone with similar political courage to say: "The Microsoft case is without merit and should be abandoned." Are you the man, George W. Bush?


Dominick T. Armentano
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Dominick T. Armentano is Research Fellow at the Independent Institute and professor emeritus in economics at the University of Hartford (Connecticut). He is the author of Antitrust & Monopoly.


Full Biography and Recent Publications

Antitrust and MonopolyFrom Dominick T. Armentano
ANTITRUST AND MONOPOLY: Anatomy of a Policy Failure
Is antitrust law a necessary defense against the predatory business practices of wealthy, entrenched corporations that dominate a market? Or does antitrust law actually work to restrain and restrict the competitive process, injuring the public it is supposed to protect? In this breakthrough study, Professor Armentano thoroughly researches the classic cases in antitrust law and demonstrates a surprising gap between the stated aims of antitrust law and what it actually accomplishes in the real world. Instead of protecting competition, Professor Armentano finds, antitrust law actually protects certain politically-favored competitors. This is an essential work for anyone wishing to understand the limitations and problems of contemporary antitrust actions. Learn More »»






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